Rupert Murdoch is set to increase his ownership of the Australian Sky News pay television channel as a result of British regulators’ go ahead for him to take full control of the British Sky Broadcasting Group.

But the deal is not ruffling the feathers of our local competition and broadcasting regulators. Indeed, it seems to have hardly registered at all.

The head of the Australian Competition and Consumer Commission, Graeme Samuel, told Crikey this morning it was “not on our radar”, and the head of the Australian Communications and Media Authority, Chris Chapman, said that our call had caught him on the hop.

In truth, there are probably no legal triggers that could bring either ACMA or the ACCC to the table.

Jock Given, a specialist in communications law and policy at Swinburne University of Technology pointed out this morning that ownership of pay television channels and operations is not covered by the media ownership regime laid out in the Broadcasting Services Act.

That means that only the competition regulator, the ACCC, could act – and that would come into play only if there was a reduction in competition. Which isn’t relevant in this case.

So the regulators are on the sidelines. But that doesn’t mean the BSkyB move has no real world implications for Australian media.

And the shifts of power and influence in this case, and the fact that they are beyond the reach of the regulators, should surely exercise the minds of those charged with the Convergence Review announced earlier this week. That review should be wholistic. Let’s hope it is.

Our local SkyNews is a joint venture operation, owned in equal thirds by BSkyB, Channel Nine and Channel Seven. Under the current ownership of BSkyB, this means that News Corporation owns just 39 per cent of one third of Australian Sky News.

But assuming News Corporation takes over the whole of BSkyB, Rupert becomes an equal one third owner with Channels Nine and Seven, increasing Rupert’s domination of the news content business in Australia and creating a new field of interesting corporate manoeuvres with Kerry Stokes.

Under the deal cut by the United Kingdom regulators, News Corporation agrees to spin off the UK Sky News Channel into a separate company, with a theoretically independent board of directors.

This “solution”  has been roundly criticised in the UK both by those who favour Rupert’s move, and those who regard it as smoke and mirrors designed to give Rupert his way.

Both views are given airplay in The Guardian where former head of programming at Sky, David Elstein accuses the regulators of muddled thinking and punishing Rupert’s success.

He writes: “ There has never been any suggestion that a News Corp chair of BSkyB has ever tried to influence Sky News output in the past 22 years.Sky News viewers are now being punished for their loyalty by having their service detached from the powerful engine of BSkyB. Sky News will still receive an annual subsidy from News Corp, and will be licensed to use the Sky name, but will it still have the courage to set agendas, as when it drove the demand for the party leaders to debate with each other in the election?”

Meanwhile Steven Barnett, professor of communications at University of Westminster, sees it as another surrender to “brutal media power of Rupert Murdoch’s News Corp,  He writes:

“There’ll be another “independent” editorial board, presumably little different from those at the Times and Wall Street Journal, which have done nothing to prevent Murdoch from appointing his favourite editors or running the newspapers according to his own vision… This deal will create a hugely powerful newspaper, TV, online and ISP media conglomerate that will dwarf every other media organisation in the UK, with guaranteed rising profits for years, on a scale that would not be contemplated in any other self-respecting mature democracy.”

Except, perhaps, for in Australia..

Australian Sky News boss Angelos Frangopoulos had no comment for Crikey this morning, but I understand that the BSkyB one third of the company will remain with BSkyB, and not be “spun off” with the British SkyNews.

No smoke and mirrors. No figleaf. Just a straight increase in Rupert’s share of ownership.

SkyNews, and pay television generally, have not achieved the dominance of the Australian television set that is the case in the USA and United Kingdom, but Sky News is nevertheless a significant player. It was SkyNews that organised the town hall debates in the lead up to the last election. The channel is offering increasing quality, and increasing influence and agenda setting, in its political reporting.

Which is good. But the politics at the corporate level deserve scrutiny.

It is SkyNews which has suggested that the ABC should not spend taxpayers’ money on ABC24, because it already provides a dedicated news channel.

No coincidence, I suspect, that as the temperature has risen around the BSkyB takeover, the Australian newspaper, owned by News Limited, has served as a platform for many an attack on the ABC, and ABC24 in particular. Sky News’s corporate representatives and The Australian’s media commentators have been singing from the same song sheet for some time now.

Meanwhile the Australian’s news commentators, Carline Overington and Geoff Elliott, have debuted in a Sky News media segment. See here for some of the background.

Sadly, our laws have proved less than effective in preventing concentration of media ownership in the past, and in the BSkyB deal they are barely relevant.

In fact, Given points out that the ACCC has been keen, for competition reasons, to get Telstra out of Foxtel . If that happened, there would be the potential for News Limited to increase its stake – all out of the reach of most of our media ownership regulations in the Broadcasting Services Act.

The Australian scene is of no interest at all to the UK regulators. Our own regulators have no power or reason to act.

The impact of the BSkyB deal shouldn’t be overstated. Everyone has assumed that News Limited controls BSkyB for some time.

And yet this is a shift in power and influence in the media – yet more concentration of ownership, and nothing can be done about it.

Will the laws be changed if Telstra shifts out of Foxtel? Its over to the Convergence Review, which is meant to “advise the government on potential amendments to keep our regulatory framework effective and appropriate for the new environment.”

Over to you, guys.

Peter Fray

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Peter Fray
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