The Broadcasting Bill, published yesterday, went further than many expected in liberalising media ownership rules.
When enacted next year it will abolish the rule preventing companies owning more than two ITV licences, allow newspapers to bid to hold ITV licences, and allow ITV companies to buy newspapers.
The Government believes the changes will develop UK companies powerful enough to compete with international players such as Disney and News Corporation.
The bill also sets out a structure for the launch of digital TV - the high-definition transmission offering wide-screen pictures and CD-quality sound - expected to replace the analogue system in 10 to 15 years.
It provides for the licensing of an anticipated 18 digital channels on six multiplexes.
It also guarantees digital capacity to the BBC for all its present radio services and reserves space for the national commercial stations.
The existing terrestrial broadcasters each have half a multiplex (an entire one for the BBC), which won warm support from the BBC and ITV.
The Government has been warned that digital television is a risky investment and the Bill attempts to encourage development by offering concessions - no cash for control of multiplex licences for the first 12 years and licences which will be rolled over at the end subject to satisfactory performance.
Licences will be awarded by the ITC on the basis of the time bidders propose for the roll-out of digital coverage and on programming quality. Sony, Motorola, BSkyB are said to be interested in bidding.
The proposals were welcomed by the BBC and ITV. Leslie Hill, chairwoman of the ITV Association, said: "The Government has listened to the industry and sought to accommodate our views."
However, Channel 4 was angry with the Government's failure to abolish the funding formula under which it gives a share of its profits to ITV.
Jack Cunningham, Labour's heritage spokesman, said: "The Government have side-stepped the issue of who will regulate for media ownership. There is a real danger that the current arrangements will be inadequate."
The Bill's key elements include:
t An ownership limit of two ITV licences changed to a maximum 15 per cent share of total terrestrial, satellite and cable audience.
t Local newspapers (including freesheets) with more than 20 per cent, but less than 50 per cent, of local newspaper circulation may acquire up to 50 per cent of local radio ownership points in their area.
t Merger of Broadcasting Standards Council and Broadcasting Complaints Commission.
t Allows the ITC to licence any BBC pay-TV services on digital.
t Amends Channel 4's funding formula more in its favour, from 1998.
t Abolishes rule preventing ITV companies, radio and local newspapers from owning cable services in areas of geographical overlap.
t Classic FM, Virgin and Talk Radio can renew their analogue licences for a further eight years if they take up guaranteed digital radio places.Reuse content