View from City Road: Brooke's befuddled vision of our TV future

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Do not take too seriously the sound and fury about the proposed relaxation of the television ownership rules. A lot of noise is only to be expected when self-importance collides with self-interest in the presence of airtime.

But the partisan fuss might give the impression that the Government had taken tough decisions about the thorny issue of mergers between the independent television companies. Sadly, that is far from the case. Peter Brooke, the diffident and cautious heritage secretary, is conspicuously failing to grasp the nettle of media ownership.

In Mr Brooke's vision of the future, terrestrial television remains a highly regulated, artificially protected industry. Because a franchise holder may only merge with one other franchise holder, the big predators like Carlton and Granada will save their one shot for another big company, and the tiddlers will continue unscathed. This minimalist approach to reforming the legislation that governs ITV will not even need primary legislation.

These rules remain wholly unsuited to an industry that is being driven by global technological changes of unprecedented speed and strength. Whether the UK has eight regional franchise holders or 14 may matter a lot to the management and shareholders of those franchises, but it will not make that much difference to the industry in the long run. Mr Brooke's fudge reduces the chances that internationally competitive British media companies can emerge from a fractured industry.

After all, ITV no longer exists in a vacuum. Within a few years cable, satellite and telephone networks, will have changed the nature of home entertainment and information systems beyond recognition.

Print, radio and television are together in that melting pot. The regulatory system needs to recognise that fact. There is nothing to stop News International from owning a third of the national press and a satellite TV station. MAI or Granada can buy LWT. Why on earth should Pearson be prevented from doing so?

In the short term, though, Mr Brooke's approach is good meat and drink for the City, which - probably rightly - scents a feeding frenzy. A situation in which judgement will be thrown out the window and expensive shares are used to buy slightly less expensive shares now seems inevitable. Once the legislation is in place, Granada, Carlton and Meridian seem virtually certain to lunch on LWT, Central, Anglia and/or HTV.

So, while Mr Brooke's decision may augur ill for the long-term interests of the television industry, for canny shareholders who use this as an opportunity to get out of the sector while it is overvalued, it looks like manna from heaven.