COMMENT ON STEPHEN DORRELL'S PROPOSALS TO REGULATE THE MEDIA

Britain is far from alone in its desperate efforts to regulate the fast-changing media sector. In country after country, authorities have raced to keep up with technological advances, cross-media alliances and global networks as they have attempted to balance public policy objectives and market imperatives.

Stephen Dorrell's proposals have allowed the Government to catch up to a degree: by dispensing with a labyrinthine set of ownership restrictions in favour of greater competition, he has given a boost to the television sector and probably paved the way for a healthier independent production industry in Britain. But it won't be long before the market catches up again. And on past form, the market will be out in front before regulators have a chance to become comfortable with the new rules.

It is a problem, too, for countries such as Italy, with which Britain has much in common when it comes to the evolution of the media scene. The Italians will vote on 11 June in a set of referendums designed to rein in Silvio Berlusconi, the former prime minister and owner of three television stations. He got where he is today by a deceptively simple strategy. Aware that he would never win the right to broadcast in competition with the state-owned television monopoly, Mr Berlusconi set up operations in Monte Carlo, a stone's throw from the Italian border, beaming in his mix of game shows, chat programmes and US imports to Italians hungry for variety. Compliant governments gradually gave him legitimacy, aware that he could not easily be stopped.

Mr Murdoch followed Mr Berlusconi's example with Sky,beaming via satellite from Luxembourg straight into a regulatory vacuum. Both men are now under attack. Britain has answered the challenge of Mr Murdoch's dominance by capping his expansion, while Mr Berlusconi may have to give up one or two of his stations (ironically, perhaps to Mr Murdoch).

Other countries are in less of a lather about the media, if only because they do not have one all-powerful baron to be bothered about. Still, fundamental issues of who should own what, and which companies should be free to operate in which sectors, preoccupy most governments.

Canada and the US, for example, are now reforming their rules on media activity, probably by allowing cable companies into telephones and telephone companies into the cable market. Canada has tried to limit cross-media ownership but still suffers from a high degree of market dominance from a small number of players. The US tries, with varying degrees of success, to limit concentration market by market, prohibiting newspapers from dominating the local television business as well.

Meanwhile the EU has embarked on its own reform of media regulations and is in the early stages of a consultation process that may alter how the sector is regulated in Britain.

In the end, as virtually every government has had to admit, rules are notoriously difficult to apply. Ownership restrictions can be got round quite easily, as Mr Murdoch's painless passage before the US Federal Communications Commission is proving. More to the point, technological advance creates market opportunities that today's regulator isn't even dreaming about. What will we do in five years' time, when the multimedia market really takes off in Europe? What competent authority then is going to regulate objectivity in the news, freedom of access to new markets, monopoly-free trade in information, and all the public policy preoccupations which will have lost none of their force?

Civil servants may advise and ministers decide, but it is the market, it appears, that presides.

Mathew Horsman

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