Rulers and deregulations

It says a lot about the old British media that they still like to portray Rupert Murdoch as the okker Aussie from beyond the Black Stump, a vulgar and gauche antipodean ingenu who wouldn’t know upmarket from his drinking elbow and doesn’t give a XXXX for the way we British like to do things.

The BBC were doing it again last Sunday morning, quoting Murdoch in the kind of cod Aussie accent that is meant to suggest that, however successfully he has penetrated the tradesmen’s entrance of British media, those in the drawing room do not much like the cut of his jib.

The attitude is as dangerous as it is patronising and offensive (and it is certainly the latter, since much of the BBC is still land-locked in its colonial past). So Murdoch swears at some of his editors. So did Beaverbrook. So what?

The fact is that Murdoch, in some respects at least, is an old-fashioned newspaper proprietor. True, he doesn’t do it solely to exercise political power – and it might be argued that the likes of Beaverbrook or Northcliffe did. Primarily he wants to make money. But that does not preclude playing the old proprietorial role of editor-in-chief, at least on his tabloids.

Those who have met him know him to be charming, erudite and urbane – no more the tinny-swilling, misogynist Aussie than Baroness Thatcher is really a man. The cartoon caricatures amuse for their resonances, but we know them to be far from the truth.

At least, we should. Our xenophobic fears lead us to cartoon portrayals of Murdoch, in the same way that the British view of Germans as goose-stepping Prussians has, for obvious reasons, been bubbling under the surface of our national consciousness of late.

But this is not a defence of Murdoch the man. As I say, it is dangerous, as well as patronising, to satirise Murdoch, because it undermines serious examination of the issues involved. Sure, last week’s deal between News Corporation and MCI drew awed and reverential comment as well as criticism of Murdoch. But it was largely of the variety that assumes Murdoch is seeking global media domination for its own sake.

The drift, for what it’s worth, is this: because he has taken a quantum leap with MCI and is trying to strike deals from Italy to Japan, Murdoch cares not a ring-pull from a tinny for the state of British media.

Wrong. Murdoch cares passionately about the British media. Not in a flag-waving, little-Englander, BBC sort of way, but because it offers a crucial axis for anyone with global expansionary ambitions.

In the same way that Japan will be seen as a media gateway to the Far-East, South-East Asian and Pacific Rim markets, so Britain remains the key axis for European and transatlantic development.

One lesson of the Silvio Berlusconi story is the difficulty of expanding from elsewhere in Europe. Berlusconi’s media interests – and the political power they temporarily bestowed -have faltered to the extent that Murdoch is now pondering a $2bn (1.3m) offer for the former Italian premier’s broadcasting interests.

But it is part of Murdoch’s skill at playing the key, rather than the subsidiary, media markets of the world that keeps him ahead of the game.

He would have his European base in Germany if it were simply about coat-tailing political power. But it is more to do with the regulatory mix between politics and the media that prescribes Britain as Murdoch’s axis state.

This has as much to do with our weaknesses as our strengths. During the Eighties, it was the Murdoch-supine government of Thatcher that served his purpose. Today, it is a successor Conservative Government and the prospect of a Labour government, both of which appear to miss the point on cross-media ownership, that provide real commercial opportunities.

Let me explain. The present Government, bless it, believes rather smugly that it has stolen a march on Labour by letting everyone know it is considering a 15 per cent share-of-voice threshold limit on media ownership.

Leaving aside that the threshold actually gives Murdoch room to expand, the move would be about restricting the potential political influence of cross-ownership of press and broadcast media. But that is yesterday’s battle. Today and tomorrow’s is about control of telephony and who controls what will be delivered through telephone cables.

Only in Britain could we avoid cross-media ownership legislation when it mattered – during the Eighties and the slavish commitment to Thatcherite growth economics – and only get around to it once the game has moved on. And only in Britain could we have exercised a form of cross-media ownership control to the cost of British competitiveness in the new media environment.

While we allowed Murdoch to grow unfettered, we prevented BT from developing entertainment services through its telephone lines to encourage cable competition. If that isn’t a double-standard in cross-media ownership control, Sir Iain Vallance and I are Chinamen.

Controls of BT’s monopoly status have not made any difference to its ability, for instance, to see off Mercury in the domestic market. What it has done is restrict Britain’s ability to compete effectively against foreign cable firms.

Murdoch, for so long largely unrestricted in British press ownership, had to circumvent what bizarrely amounts to cross-media control in telephony.

Hence the $2bn deal with MCI, in which BT is the largest single shareholder with a 20 per cent stake. No wonder BT was pleased with the deal.

Once the down-the-line entertainment restriction on BT is lifted early in the next millennium, we can expect pay-per-view and the like to be delivered courtesy of MCI and Murdoch, with BT playing the key role that it always intended to.

British media regulation has, in short, failed to limit Murdoch’s power and succeeded only in making a nuisance of itself with BT.

This cannot be what the Government had in mind when it belatedly started to talk of 15 per cent share-of-voice thresholds recently and banned BT from playing a part in the development of the cable market over the past decade.

But – even if Murdoch were one – a simple Aussie could run rings around British media regulation. As it happens, a complex Australian-American has.

George Pitcher is joint managing director of media consultancy Luther Pendragon.