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The Chairman of Committees: My Lords, I should point out to your Lordships that, Amendment No. 93 having been spoken to, if it is agreed, I cannot call Amendment No. 94.

Lord Inglewood: My Lords, in responding to the amendments of the noble Lord, Lord Harris, I do not want to repeat the arguments I gave in Committee for the Government's view that distinct controls on the media are appropriate above and beyond those of general competition policy. The thought occurs to me that in a nutshell it is precisely because broadcasting has been so heavily regulated in the past that wholesale immediate deregulation would have arbitrary and potentially uncompetitive effects. Hence it is important to bear in mind that we are talking about an interim regime. That is why we introduced a measured deregulatory step in the Bill.

I am grateful to the noble Lord for drawing to my attention matters of 40 years ago. I am afraid it was more or less before my time--not quite--and I am therefore not in a position to respond first-hand to that. I was slightly surprised to hear his remarks about our fear of the future. Two amendments earlier I was slightly chided by the noble Lord, Lord Thomson of Monifieth, for taking a face-to-face view of the future. I feel therefore that the noble Lord was being rather unfair in some of his strictures.

The Bill proposes a relatively simple way of regulating television ownership. Companies will be allowed to expand up to 15 per cent. of the total television audience. They will not, however, be able to breach that limit. It will be clear to broadcasters from the outset whether they are likely to breach the limit, and it will be up to them to take remedial action in the event that they do so. A failure to take remedial action could lead to the ITC imposing a fine or revoking a television licence.

The absolute 15 per cent. total television audience share limit was set because television has a uniquely powerful influence and it is important that undue concentrations of ownership are not allowed to develop. In the case of terrestrial television in particular, there is, and will remain, a substantial element of rationing of a scarce resource, given the limited number of channels available. Fifteen per cent. is not an unrealistic limit. Currently, the largest commercial broadcaster in audience terms, Carlton, has a 9.4 per cent. share of the audience. Its nearest rival, Granada, has a 6.9 per cent. audience share. The largest cable and satellite broadcaster, BSkyB, has a 4.5 per cent. share of the audience. The 15 per cent. limit will therefore allow considerable scope for all commercial broadcasters to expand, while ensuring continuing plurality and diversity in the provision of television programming. We believe that the 15 per cent. limit is appropriate for television; that it should remain an absolute limit; and that it should not be subject to a discretionary test.

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Given the current audience shares for major television companies, I find it difficult to foresee a situation in which a service would breach the 15 per cent. audience limit by organic growth alone. Carlton could not breach the 15 per cent. limit without acquiring further television licences. Similarly, BSkyB could not breach the limit without providing additional television channels. Indeed, Amendment No. 95 seems to acknowledge that through its reference to,

    "new services which commence during that period".
The point is that once there is a risk of a service provider breaching the 15 per cent. limit, they should not be allowed to provide new services which would lead to them exceeding that limit.

It follows that we do not believe that there is any need for a separate assessment of the public interest should the threshold be exceeded--either for the ITC or for the competition authorities. I should, however, add and emphasise that media ownership regulation in no way inhibits the operation of competition legislation. Where any merger between broadcasters creates or increases a market share of at least 25 per cent. or involves a takeover of assets exceeding £70 million in value, the Director-General of Fair Trading will advise the Secretary of State for Trade and Industry as to whether or not to make a reference to the MMC. Similarly, the monopoly provisions of the Fair Trading Act will continue to apply to broadcasting in the normal way.

The 15 per cent. television audience share limit is simple and transparent. It was set after careful consideration of the television market. At present no commercial broadcaster has more than a 10 per cent. share and most are well below that. The 15 per cent. threshold will allow considerable concentration within the industry. However, it is up to companies to ensure they do not breach the limit and to take remedial action if they do. The Government do not see the case for making the 15 per cent. threshold discretionary; and nor do we see a role for the MMC.

I turn to Amendments Nos. 91, 92 and 94. Our policy document, Media Ownership: The Government's Proposals, published in May last year, made it clear that the Government had concluded that there was a continuing need for specific media ownership regulation beyond that applied by general competition law in order to protect the plurality of the British media industry. As I have said on a number of occasions, the media industry is unlike others because of its ability to influence opinion and engender debate.

In setting the market limit for television at 15 per cent. of the total television audience, which is to include all public and commercial broadcasting services, we took careful consideration of the current market shares of major television companies. At present, the commercial group with the highest audience share is Carlton, with 9.4 per cent. The next largest is Granada, with 6.9 per cent. The 15 per cent. limit really will allow significant room for expansion.

We expect the expansion of cable and satellite broadcasting to continue for some years. The market will also expand significantly with the advent of digital

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terrestrial television. We may therefore need to raise the threshold from 15 per cent. to say 20 per cent. in the future when there are a substantial number of services available.

If we were to move immediately to a 25 per cent. market share limit for television then it would have damaging consequences for plurality. It would mean one group could control about 70 per cent. of the ITV network. Additionally, such a group could notionally control up to 20 per cent. of national newspaper circulation and up to 15 per cent. of the available radio points. I believe that such a move would damage the British media industry because it would allow the development of extremely powerful groups which could undermine the competitive position of smaller media companies. Things may look different in some years' time, if the number and market share of cable and satellite services continues to grow and digital terrestrial services emerge. But for the present, we believe that 15 per cent. strikes the right balance between allowing television companies to expand and maintaining plurality, particularly in the Channel 3 network. For those reasons, the Government oppose the amendments.

Lord Harris of High Cross: My Lords, I accept what the noble Lord says about the Government's position but I find it totally incomprehensible. I find it impossible to understand how even, if I may say so, a young Minister, unaware of the secrets I have revealed about the 1950s, can go on talking as though the BBC can be trusted with 43 per cent. of something, but that Carlton or BSkyB must be content with 15 per cent.--they are, after all, puppies; they have only 7 or 8 per cent. and there is room for them to grow. It is a preposterous kind of condescension coming from someone in the public sector about another part of the public sector.

I welcome the Minister's statement that this is an interim regime between severe restriction and regulation and greater freedom. If I were given to making predictions, I would say that we shall be back with another Broadcasting Bill. It is five years since the last one. It will be less than five years before we come back with substantial changes. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 91 to 96 not moved.]

Lord Inglewood moved Amendment No. 97:

Page 83, line 33, leave out ("national Channel 3 services") and insert ("a national Channel 3 service").

The noble Lord said: My Lords, this is a technical amendment. I beg to move.

On Question, amendment agreed to.

Lord Inglewood moved Amendments Nos. 98 and 99:

Page 88, line 4, leave out ("to (f) or paragraph 1(2)(j),") and insert ("(c) or (e),").
Page 88, line 6, leave out ("to (f) or paragraph 1(3)(j),") and insert ("or (f),").

On Question, amendments agreed to.

Lord McGregor of Durris moved Amendment No. 100:

Page 91, line 44, leave out ("local").

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The noble Lord said: My Lords, I have tabled seven amendments--Amendments Nos. 100, 101, 108, 110, 131, 132 and 134--for the single purpose of attempting to reduce some of the discriminations in the Bill, as I interpret them, against regional and local newspapers which might wish to own regional broadcasting services. Accordingly, although my amendments are scattered within the latter groupings, I hope that it may be for the convenience of the House and the noble Lord, Lord Inglewood, if I save time at this hour by speaking very briefly to all of them in general terms.

As the Bill stands, it disadvantages regional and local newspapers as against national newspapers, which will be able to own radio stations in circumstances in which a local newspaper is prohibited from so doing. Regional and local newspapers compete with national papers for readers and advertising. The Government are making cross-media ownership more available to national media companies as a response to competitive pressures, domestic and international. But the Bill will not give local newspapers the opportunity to create locally-based media companies so that they can exploit for themselves the opportunities for linked marketing, cross-promotion and the sharing of resources for reporting and newsgathering.

Local media will become more diverse with new technologies, with the onset of cable, on-line services, the proliferation of commercial radio services and increased free-sheet distribution. Where news is concerned the strengths of local newspapers derive from the community in which they are based and their strengths need to be sustained if the social need which they serve is to benefit. That cannot happen if local newspapers are weakened, as this Bill will weaken them, in the face of competition.

As they stand, the Government's proposals are likely to undermine diversity, not underpin it. The Bill fails to follow the logic of the current rules, which enable local newspapers to provide news services to radio stations. They should be allowed to own a radio station as well and thereby be able to respond to market pressures and technological opportunities.

In the Bill the Government have separated diversity in local newspapers from competition, but the two are the same issue. If they cannot compete effectively, local newspapers will lose market share, and the plurality and diversity of local media will diminish.

These amendments would strike a better balance. The public interest test would be maintained, but the threshold calculations would be amended; first, to take account of the sales of national newspapers; secondly, to reflect where there is a BBC local radio station or Channel 3 service; and, thirdly, to take the market share to 30 per cent. as the Government first proposed. The amendments would also ensure that restrictions are applied only where newspapers have a substantial penetration of households in the area. I hope that the Minister will reflect on the amendments and on the arguments which support them, and undertake a more realistic analysis of the market for regional and local papers and media groupings.

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I believe that the amendments accord with the aspirations of the regional and local press, which were set out decisively in a letter today in The Times by the director of the Newspaper Society, who wrote:

    "The Bill would allow multimedia conglomerates and most national newspapers to purchase local broadcasting outlets, while prohibiting local newspapers from doing so. The former would have massive commercial advantage over the regional press in the day-to-day competition for advertisers, readers, news stories and markets.

    To thrive, a lively and locally responsive media sector needs scope to expand and diversify into locally-based media companies by being able to compete on a fair basis with other industry sectors".
I hope that the Minister may be sensitive to those considerations and that he may be willing to consider whether the Government will be able to introduce their own amendments to meet those points at the next stage.

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