Ofcom's warning shows concern over the future impartiality of Sky

Analysis

Ofcom based its findings on a warning issued in 2003 by theLabour peer Lord Macintosh of Haringey, then minister for the Media,that "media plurality" has to be defended because "it would bedangerous for any person to control too much of the media because ofhis or her ability to influence opinions and set the politicalagenda".

It concluded that "the proposed acquisition may be expected tooperate against the public interest since there may not be asufficient plurality of persons with control of media enterprisesproviding news and current affairs to UK-wide cross-mediaaudiences".

Dealing with the argument that Rupert Murdoch already effectivelycontrols Sky, the report acknowledged that News Corporation has"material influence" over the satellite station's output, throughthe 39 per cent of shares it already owns, but cannot "pass generaland special resolutions alone" because of the presence of othershareholders and independent directors. Owning 100 per cent of Sky'sshares "would allow News Corp to take decisions involving Sky whichare in the exclusive commercial interests of News Corp".

This would "reduce the number of persons with control of mediaenterprises" as "Sky would cease to be a distinct media enterprise".

Ofcom also warned that "the effect of the proposed acquisition isto bring together one of the three main providers of TV news withthe largest provider of newspapers".

The report recognised that impartiality rules would be a"safeguard" even if Sky were wholly owned by News Corporation, butargued that they are not strong enough to guarantee that Sky's newsoutlet would continue to be impartial. Ofcom rejected NewsCorporation's argument that the internet is giving people morechoice of news outlets than they used to have, because all the top15 online news providers are either established newspaper orbroadcasting companies or websites that aggregate news from othersources, which "suggests that today online news tends to extend thereach of established news providers as opposed to favouring the useof new outlets that are not present on traditional media".

The report also warns that the law may not now be strong enoughto enforce the Government's policy on "plurality" in the media,because the authorities can intervene only when a change inownership is proposed. They conclude "that a more fundamental reviewand possible reform of the statutory framework may be required".