News Corp. Opposes Changes to U.K. Media Ownership Rules

LONDON – It may have been forced to abandon its bid to become the U.K.’s biggest media company last year. But News Corp. still believes that tightening media ownership rules would “deter investment and innovation,” in the U.K.

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In its published submission to a new review of British media ownership rules, News Corporation also warned against developing elaborate regulatory criteria to measure plurality of news sources – a key benchmark in the U.K. compeition criteria – saying such a test would likely not work.

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News Corp. was responding to the a review of media ownership limits being conducted by British media regulator Ofcom. The review was set up by Culture secretary Jeremy Hunt last July, in response to mounting public and political opposition to News Corp.’s planned takeover of BSkyB.

The global media giant said that U.K. competition criteria were broadly working and should remain unchanged – and said that media plurality should only be evaluated across individual markets like television, newspapers and online – not as an aggregate. “Should it prove possible to design a [media plurality] test in practice, it is in any event self-evident that a market share limit would be highly likely to deter investment and innovation by any company at risk of exceeding any set threshold of news. That cannot be good for U.K. consumers,” News Corp. said in its submission to Ofcom.

“News [Corp.] is not aware of any reliable and robust metric for measuring news plurality on which consensus has been reached either in the U.K. or elsewhere. A quantitative measurement carries the risk of missing the complexities of the media landscape through a mechanistic application of arbitrary devices.”

Ofcom’s review of media plurality has also received submissions from media and news providers in the U.K. including the BBC, ITN and the Guardian Media Group. The review, which was launched by Ofcom in October 2011, will report its findings in June 2012.

News Corp. eventually voluntarily withdrew its $12 billion bid for BSkyB amid the extraordinary anti-Murdoch climate that swept the country following the revelation that the News of The World had hacked the phone of murdered schoolgirl Milly Dowler.

But before the bid had been withdrawn, there was nothing in the existing guidelines that appeared capable of blocking the takeover.