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Murdoch should not buy C5 says report

LONDON - The government should not lift the ban preventing companies such as Rupert Murdoch's News Corporation from owning Channel 5, as proposed in its draft communications bill, the joint media committee chaired by Lord Puttnam has revealed.

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The committee recommends that all mergers and acquisitions of media companies should be put through a series of tests and that once such a system has been developed, the decision should lie in the hands of Ofcom, the new super media and communications watchdog.

In a statement, Lord Puttnam said: "At the heart of our conclusions and recommendations about media ownership is the proposal for a new plurality test to be used in connection with mergers and takeovers across all media.

"We hope that this recommendation will stimulate an important and timely debate. In due course, if parliament is satisfied that this powerful new weapon is being used effectively, the need for specific ownership restrictions set out in statute will greatly diminish.

"In advance of such a development, and before Ofcom has established itself as an effective regulator, the case for the lifting of certain existing restrictions has not been established to our satisfaction."

The report also recommends that Ofcom should have greater powers over the BBC and suggests that changes to the BBC's charter, which is due for renewal in 2006, should be made before the bill is published.

He said: "The bill should be amended to place beyond doubt Ofcom's powers over the BBC in respect of competition law. The government should set out its initial proposals for the conduct of charter review before the bill is considered by parliament."

The news about the BBC will please the commercial sector, which has been calling for the BBC to be brought under the control of Ofcom, rather than its board of governors. Commercial broadcasters will also be pleased to hear that the conditions of its charter are to be set out now.

The report concludes that the government will be expected to take similar pains over its response to the report, as the committee did in writing it.

Puttnam said: "We expect the government to respond to our report in the same careful way that we have considered its draft bill. If the government wants to make the process of pre-legislative scrutiny work, as I hope and believe it does, then it must satisfy parliament as a whole that it has responded to our report in the spirit in which it is tendered, as a genuine attempt to make a good bill better."

The findings of the committee will come as a blow to the government, particularly Tessa Jowell, the secretary for culture, media and sport, who put the bill forward. It is also expected to come as surprise to Tony Blair, who is a personal friend of Lord Puttnam.

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