Friday, September 29, 2006

Media laws favour News, Ten boss claims

The head of Network Ten says the current cross-media laws have created a pay TV monopoly for media giant News Ltd, and need to be changed to allow true diversity.

Executive chairman Nicholas Falloon told a Senate inquiry that in the past changes to current laws had been strongly argued against for fear they would stifle diversity.

But the opposite was now the case, Mr Falloon said.

"While we've had cross- and foreign-ownership rules in the last ten years, we've had the introduction of pay television into the landscape," Mr Falloon told the inquiry.

"While those rules have existed, pay television has come into being as an absolute monopoly - it's in the hands of the two dominant media players.

"If you believe everyone in the industry, (the monopoly) will continue to grow.

"We think that the media rules that are aimed very narrowly, have completely (been rendered) obsolete.

"That's before you take into account the clear growth of the internet, which is impacting on all forms of media."

News Ltd and PBL hold 25 per cent each of pay TV provider Foxtel. Telstra owns the other 50 per cent of Foxtel.

Mr Falloon said it would be possible for News Ltd to buy Ten under the proposed rule changes, subject to Australian Competition and Consumer Commission (ACCC) consideration.

He said senators should ask themselves why News Ltd had changed its position on the proposed rules, now stating they want the status quo to remain whereas previously they had argued for reforms.

"They've changed their opinion, I believe, because they've been, in the last ten years, dealt a very effective and very strong monopoly which is getting stronger, not only a monopoly on pay TV, but with their partner PBL in sport on pay TV," he said.

"They're saying to themselves, 'gee, it's very nice these rules stay in place' that completely handcuff all their potential competitors from growing, while they continue to get stronger.

"The very reason that people have argued over the last ten years why we shouldn't change these media rules, because it will threaten diversity, I'm putting to you it's actually now the complete opposite.

"These rules need to change to protect diversity because the dominant players under the existing rules are continuing to get stronger at the expense of the others."

The hearing is continuing.

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