Government’s media policies are as jumbled as its coalition ranks

ANDREW

It’s not just national media that is having a raw deal from the government, local TV, radio and press are at dire risk from its policies.

These are tough times for the coalition government. The eurozone crisis is threatening any faint hope of a financial recovery in 2012, while backbench rebellions over our place in the European Union make the revolts of the John Major years seem minor. At least the government’s actions on media are clear and joined-up, right? Wrong!

The past few months have seen some unravelling in even the best-laid plans.

At a national level, it all started to go awry with NewsCorp’s abortive acquisition of the remaining shares it is yet to own in BSkyB. First, a prejudicial schoolboy error meant the decision to approve the acquisition was passed like a political hot potato from Vince Cable to Jeremy Hunt. Then, just as the culture secretary was all set to green-light the deal (much to the derision of the Murdoch family’s opponents) there came the fall-out from the phone hacking scandal, which became far too significant for the deal to continue. Next, even though it was journalistic endeavour, from The Guardian, that exposed malpractice in another, the government has taken a swipe at the Press Complaints Commission and press freedom. Instead of a light touch, deregulatory Communications Act, we now have a swathe of inquiries into the role of the press, headed by Lord Justice Leveson’s report.

Meanwhile, the backroom deal on the BBC licence fee, agreed last year between Hunt and BBC director general Mark Thompson, is starting to cause political tension with the announcement of cuts and service changes in the BBC’s new publication, the curiously named Putting Quality First (what else might be first, one wonders?). So, the government is picking fights with the national press, the BBC and Sky. That’s brave, at best.

And as well as these national stories, local media is also in a spot of difficulty. The coalition’s local media strategy is in trouble. We all know the financial difficulties faced by local press and radio, with the former in particular under threat from the collapse of classified ads and the growth of online alternatives. So the government promised some light touch, deregulatory changes to enable it to thrive.

It’s a graphic example of the bureaucrats failing to agree on a rearrangement of the deck chairs on the Titanic while local press heads towards the iceberg. Instead of one strong company, well-funded and resourced to serve local readers, two subscale operators will fight for breath until one group’s titles fold.

In reality, however, we have Hunt’s local TV initiative, which is diverting attention and resources from within the culture department and preventing it from fixing the real structural issues among current providers. Local press and radio operators are being asked to join or fight a new local TV media platform, with continuing uncertainty about their own future. For example, in local radio, national operators are being encouraged along the route toward DAB switchover without certainty about the FM future for smaller stations. Meanwhile, BBC local radio has announced it will network more and reduce local content.

Yet local TV and radio look positively joined-up compared to the difficulties facing local press. Any prospect of a promised relaxation in local media ownership rules looks naive. Take the decision last week by the Office of Fair Trading to refer the anticipated acquisition by Kent Messenger Group (KM) of several newspapers from Northcliffe Media to the Competition Commission for further investigation, effectively quashing any deal.

These companies publish the only local weekly newspapers in seven areas in East Kent. The OFT’s investigation concluded that the monopoly of local newspapers that would result in these areas risks costlier advertising for businesses and higher cover prices for readers. That might have been true 20 years ago before advertisers had a string of digital alternatives and readers a swathe of free online news providers. Last time I looked, the internet was already eating the local press’s lunch. Now we’re told it’s a ring-fenced market without advertising or reader competition. I know East Kent is not Soho or Westminster but if you Google it, you’ll find the internet has reached Ashford.

It’s a graphic example of the bureaucrats failing even to agree on a rearrangement of the deck chairs on the Titanic while local press heads towards the iceberg. Instead of one strong company, well-funded and resourced to compete with BBC Kent and serve local readers, two sub-scale operators will fight for breath until one group’s titles fold. Northcliffe has lost a window to sell its local titles to a strong local operator; KM has lost the chance to be strengthened as a beacon of high-quality local journalism across the county.

The business cost of regulations and referrals continues to be misunderstood by the government. KM had made it clear since before it embarked on the regulatory process, that if a referral was the outcome it would withdraw its bid. That’s because for small local media businesses the cost and effort involved in a full OFT referral process far outweighs all benefits.

And it’s not just KM, the prospective buyer, who’s upset. Steve Auckland, managing director of the seller Northcliffe, said: “This makes a mockery of politicians expressing their desire to reduce red tape in business and allow consolidation in the regional press. We are not talking about a Google or a Microsoft here.

“The OFT has to operate within a regulatory system that is not designed to cope with small local newspaper businesses that have no prospect of funding a Competition Commission review and are thus denied the opportunity to consolidate.”

So local TV, BBC local radio, local press a spot of local difficulty for your local MP.

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