Rigid radio rules likely to relax

The latest news from the Broadcasting Commission of Ireland bodes well for Ulster Television and Scottish Radio Holdings' ambitions…

The latest news from the Broadcasting Commission of Ireland bodes well for Ulster Television and Scottish Radio Holdings' ambitions in the Irish radio market. The commission's call for submissions on the ownership and control of broadcasters has indicated widespread support for the relaxation of the current rigid rules.

Two sections of the document summarising the submissions - which was released last week - are of particular interest. The first collates the views of industry players and interested parties on how the local ethos of broadcasters should be protected, which is one of the BCI's key responsibilities.

There was "strong support", according to the BCI, for the notion that the regulator should focus on content as a way of ensuring that a broadcaster has a local ethos rather than be fixated on who owns or controls the business. The way to achieve this, the industry has told the BCI, is by "contractual obligations and undertakings which should be closely monitored and enforced".

Although some submissions argued for no controls at all on local content, saying that market forces would protect the local ethos, there was "an underlying recognition that some level of regulation of ownership would be involved", said the BCI. There was also general support for "some level of local representation at management or board level", according to the summary.

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All this must be music to the ears of UTV's management. Its ambition to buy 100 per cent of County Media, which operates three radio stations in Cork, was thwarted last year by the BCI, then known as the Irish Radio and Television Commission, even though it undertook to maintain both local content and representation. The commission allowed the Belfast-based group to take 60 per cent of County Media, but only on condition that UTV would not have control of the board. It was a reasonable compromise given the commission's current rules banning media groups from owning more than 27 per cent of a radio station, but from UTV's perspective it is a less than satisfactory arrangement.

Scottish Radio Holdings (SRH), which said recently it wanted to increase its stake in Today FM from 24 per cent to 100 per cent, must also draw comfort from the submissions. Although the BCI might be less inclined to relax ownership laws for national franchise holders such as Today FM. SRH might prefer to focus instead on the section of the summary document that condenses submissions on how media concentration should be measured. At present the BCI uses the relatively crude method of the percentage stakes, i.e. the more of a broadcaster you own, the more you control.

The view of most respondents was that this approach was too narrowly focused, particularly given the convergence of broadcast and other media. The real issue is not how much somebody owns of a broadcaster, but the "direct and indirect influence they can exert", according to the industry. It follows from this that if you are the dominant influence in running a radio station, as some would argue Scottish Radio Holdings already is at Today FM, then what does it matter if you own 24 per cent or 100 per cent?

The topic of the concentration of ownership was addressed in some detail by the repsondents. A point made by many was that the issue also has to be seen against a background of the convergence between broadcast media and other types of media, via the internet and other technology driven distribution platforms. The size of a media group's holding in a broadcaster will not really matter in the future, they argue. The view of the industry is that "the key factor will instead be whether market power in content undermines pluralism and diversity when combined with ownership of distribution platforms", according to the report.

The day when this scenario becomes a reality is closer than many might think. One only has to look at the decision by Sir Anthony O'Reilly, the controlling shareholder in Ireland's dominant media business, Independent News & Media, to take a stake in Eircom. The size of the stake that Sir Anthony will take - 3.7 per cent - is not thought large enough to create issues for the current regulators, the Department of Enterprise, Trade and Employment and the telecommunications regulator. Neither body is specifically required to look at the extent to which Sir Anthony's "influence" over the broadcasting media will be enhanced by the deal and whether it is desirable.

The BCI's writ does not run in this area at present but it appears the industry thinks it should. The BCI notes that "most of the respondents saw this as the beginning of a consultation process, with frequent or regular reviews built in and particularly necessary in light of convergence and digital services coming on stream".

It is obvious from the submissions that pressure is building from the industry for a more flexible and up-to-date approach to the regulation of ownership. It should be borne in mind that companies with direct interests in radio stations were behind 14 of the 33 submissions and that telecommunications and cable television businesses accounted for another six submissions. This newspaper, which is the parent of the Ireland.com portal, also made a submission.

Radio station owners and media groups in general have an obvious vested interest in seeing a relaxation of ownership restrictions. It increases the value of broadcasting assets and creates opportunities for expansion.

The BCI will no doubt make allowances for a certain amount of "they would say that wouldn't they". But it would be surprising if they did not take the industry's views on board when they met in the near future to consider the responses and whether to relax ownership rules.

jmcmanus@irish-times.ie

John McManus

John McManus

John McManus is a columnist and Duty Editor with The Irish Times