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Good news for Carlton and Granada in
media ownership consultation document

LONDON - The government will not remove regulatory hurdles blocking Rupert Murdoch from owning a UK terrestrial TV station, but will allow the creation of a single ITV company in its forthcoming communications bill.

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The news came in a consultation document released today. The decision to block non-EU companies from owning a UK terrestrial broadcaster -- which could have seen international companies such Murdoch's News Corporation take control of ITV -- comes just weeks after reports suggested that the government was considering giving media behemoths such as News Corp and AOL Time Warner equal access to UK broadcasters.

However, a 50-page consultation document, published today by the Department of Culture, Media & Sport, said that existing rules preventing non-EU companies from owning more than a 20% share of UK terrestrial broadcasters would not be lifted, although the government "would be willing to listen to arguments in favour of a repeal".

The document did confirm that it will propose abolishing current broadcasting legislation preventing Granada and Carlton -- ITV's two biggest companies -- from merging.

The 1996 Broadcasting Act currently prohibits one company from controlling more than a 15% share of the commercial TV audience, while one company is prevented from owning more than one of the London ITV franchises.

The paper said: "Concerns over the plurality of ownership within commercial TV are now less valid, given the range of alternative media and pay-TV options that are widely available."

In response to worries among advertisers that the consolidation of ITV could lead to the price of advertising being pushed up, the government said that this was a "market issue" and that the competition authorities would have to consider such matters and that "competition law should provide sufficient protection".

The DCMS, however, left open the debate on cross-media ownership rules saying it wanted more time and opinions on the issue. Current legislation bars newspaper owners which control more than 20% of the market from owning a terrestrial TV station or radio broadcaster.

It indicated that it may retain existing laws or introduce plurality tests which would be applied to cross-media acquisitions. It added that its proposed communications super-watchdog Ofcom could also contribute to these decisions.

The paper also asked for opinions on whether Ofcom should be allowed to review media-ownership rules every two years.

The radio industry faired less favourably than the TV sector with the news that the point-scoring system for regulating UK radio ownership would be dissolved, although it added that the awarding and regulation of radio licence ownership could be left to the competition authorities.

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