Rupert Murdoch Criticizes Australia's Media Ownership Reform Plans

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The media mogul and his News Corp Australia CEO say proposed rule changes favor rivals.

News Corp chairman Rupert Murdoch is at loggerheads with the Australian government over its plans to reform Australia’s 20-year-old media ownership laws, which could lead to major consolidation in the industry by allowing TV broadcasters to merge with radio network owners or newspaper across the country.

Communications minister Malcolm Turnbull has recommended to prime minister Tony Abbott that the government abolish two of the key rules governing media ownership. One is known as the “two out of three” rule, which prevents media companies from owning  more than two out of three forms of media, namely a newspaper, a commercial TV license or a radio license, in major cities such as Melbourne, Adelaide, Sydney or Perth. The other is the “reach” rule, which stops the commercial TV networks, namely Seven, Nine and Ten, from merging with regional affiliates by limiting the coverage of any commercial TV network to 75 percent of Australian homes.

Those changes would allow Murdoch's News Corp, which has the widest newspaper ownership of any media group in Australia, to bid for TV networks or radio stations in the capital cities, but without other changes the rules would disadvantage pay TV giant Foxtel, of which News Corp owns 50 percent and has management control. Turnbull has not proposed loosening rules, which prevent Foxtel from bidding outright for top tier sports events, known as the anti-siphoning rules, while the free-to-air broadcasters want Foxtel to pay them retransmission fees for carrying their networks on the Foxtel platform the same way pay TV operators pay broadcasters in the U.S.

Murdoch tweeted on Sunday U.S. time: "Aust! Turnbull's plans to scrap certain rules suit buddies at Nine. Can't oppose dumping all regs (regulations) but not this. Nice to see how MT [Malcolm Turnbull] plays."

Murdoch’s tweet came just as News Corp Australia CEO Julian Clarke criticized the proposed reforms Monday Australian time. He said the company would not support any change “if it involves cherry-picking some policies and only changing these."

In a statement, Clarke said: “It is critical that any package of reform includes severely reducing the length of the outdated anti-siphoning list, which is the longest such list in the world, covering over 1,300 sporting events, and has the effect of reducing the public’s access to sporting events."

In addition Clarke said News Corp was "totally opposed" to any requirement for Foxtel to pay retransmission fees. "News is totally opposed ... to Foxtel being required to pay the free to air networks a fee for the public's convenience of accessing free to air television via their Foxtel connection when all free-to-air channels are freely available via an antenna," Clarke said. "It is in the public's interest to leave access to free-to-air channels exactly as it is."

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