Murdoch set to lose out in government's draft communications bill

LONDON - News Corporation chairman Rupert Murdoch is expected to emerge as the main loser when the government's draft communications bill is published later today, but the government is stressing that the bill is not built around one man.

The bill, which is set to outline the role of the new communications and media watchdog Ofcom, is expected to determine a round of sweeping changes to outdated media-ownership rules.

It has long been reported that the government would remove limits, such as the ceiling on audience and advertising revenues, which have until now prevented ITV companies Carlton Communications and Granada from merging.

Cross-media ownership legislation that prevents a company such as Murdoch's News International -- publisher of The Sun and The Times -- which has more than 20% of the national newspaper audience, from owning more than 20% of a terrestrial broadcaster is expected to remain, according to reports.

However, the government is calling it a "proprietor-neutral package" in an effort to distance talk of anti-Murdoch legislation. Murdoch has made no secret of his ambitions to gain a foothold in the UK terrestrial TV market, largely because subscriptions to his dominant satellite TV service BSkyB are forecast to reach a plateau in the near future.

The likely winners amid media owners are thought to be the commercial radio operators, such as Capital Group and Daily Mail & General Trust, when barriers are lifted on further consolidation in the sector.

According to reports, the points system that limits radio owners to a 15% share of the market, along with tight ceilings on local radio ownership, will be removed.

It is thought that, at the very least, existing rules will be replaced with what is being called a three-plus-one system. This would allow each local area three radio operators plus the BBC.

But consolidation in the radio sector will ultimately be inhibited by competition regulation that limits any operator from controlling more than 25% of radio advertising.

This would prevent companies that control 20% of advertising such as Emap, owner of Kiss and Magic, combining with Classic FM operator GWR or Capital, which each have a 25% share of radio advertising.

Meanwhile, the government could impose fines on public service broadcaster the BBC for failing to meet broadcasting standards as part of plans to create a level playing field among UK public service and commercial broadcasters.

Speaking on 'Breakfast with Frost' on Sunday, secretary of state for culture, media and sport Tessa Jowell said that individual BBC departments could be penalised for breaching the broadcaster's public service remit in the same way that the Independent Television Commission imposes fines on the commercial sector.

In an attempt to stop the public's money going straight into the government's pocket, the money would likely be distributed among other BBC departments.

The bill is expected to see many aspects of BBC regulation brought under the control of Ofcom.

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