British TV proposal

U.K. gov't outlines b'cast reforms

By ERICH BOEHM

LONDON -- The U.K. government has outlined reforms to media ownership that would allow ITV to become a single company and continue to block foreign ownership in the terrestrial TV market.

The proposals were unveiled Monday and trigger a two-month consultation process.

Scrapping the rule that prohibits single ownership of ITV's two lucrative London licenses, Carlton and LWT, and the stipulation that no one company can command more than 15% of the national TV viewing share, clears the decks for the two big ITV companies, Carlton Communications and Granada Media, to merge.

Both Carlton and Granada -- suffering in the advertising downturn and financially stretched due to investment in their loss-making pay TV platform, ITV Digital -- have lobbied for the changes.

"There has already been a considerable degree of concentration within ITV which has benefited the industry. Further consolidation may bring benefits for consumers and companies alike," the government 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."

What surprised observers was that no bone was thrown to Rupert Murdoch's News Corp., which controls satcaster BSkyB, Britain's dominant pay TV player, and has long shown interest in entering the U.K.'s terrestrial TV market.

The government said it plans to keep the rule blocking non-European Union companies from owning more than 20% of a terrestrial broadcaster in the U.K.

Culture secretary Tessa Jowell had previously indicated an inclination to allow the likes of News Corp or AOL Time Warner an equal footing in the terrestrial market. The excuse given was that there are no reciprocal arrangements in place for British companies doing business in the U.S., for example.

In a joint statement, Jowell and industry secretary Patricia Hewitt added: "The question of who owns our newspapers, television and radio is vital to democracy."

Meanwhile, the government is considering raising the limit one company can hold in ITN -- news provider to ITV, Channel 4 and Channel 5 -- from 20% to 40%. Carlton and Granada are both 20% shareholders.

It is also soliciting views on how to prevent the joint ownership of ITV and Channel 5 to ensure a plurality of at least four separate broadcasters providing free-to-air TV in the U.K.