Leading Article : There is a way to stop Murdoch's TV takeover

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The Independent Online
BSkyB's profits are up. This week, amid dawning realisation of the size of his digital TV coup, Rupert Murdoch treats us to a demonstration of his satellite power by cancelling the launch of the Warner Channel. He is indeed a phenomenon. But make no mistake, this is no unstoppable force of nature. Murdoch does, technologically speaking, bestride the narrow world but as the man said about Caesar, the fault that we are underlings lies not in the Sky but in ourselves ... or rather in the pusillanimity of a political class so in thrall to his newspapers that is refuses to subject him to the rigours of fair competition.

Rupert Murdoch's editorial fan club puts it about that he is a great entrepreneur. He is, but over the years his biggest enterprise has been the manipulation of regulatory regimes established by governments. The man lives and dies by his capacity to swim in media markets characterised by rapid technological change, high up-front costs and a natural tendency towards monopoly. It is not usually economics which explains how they work, but politics. Like most businessmen he prefers less competition to more, which is why owning politically influential newspapers is always a sound investment. On digital television he has played a suave game, operating by stealth to secure a legislative outcome (the 1996 Broadcasting Act) which suits him to a tee. Murdoch is now poised to corner the market in direct satellite broadcasting to households. All the cant (and his editors are great suppliers of cant) won't conceal his yen for monopoly power.

His track record - here, in the United States, in Australia, in East Asia - is evidence enough of his project. He is not going to let up. It is therefore up to the authors of regulation to see what his game is and tighten the rules accordingly - not to hamstring Rupert Murdoch as a player but to ensure that he faces maximum competition on as level as field as can be rolled. Instead of that, our political class has either actively encouraged him or dithered - or gone on pilgrimage to his Australian lair.

Mr Murdoch's acolytes like to pretend that criticism of their man is a product of small-minded envy, an exhibition of the British penchant for bringing down greatness. They apparently cannot see the difference between admiration of energy and imagination (and Mr Murdoch has those in abundance) and alarm at his naked grasping after control in arenas where the very stuff of democracy is at stake - as it is in matters of news and information. They argue that Mr Murdoch's power is market-borne; that he should not be censured because so few have risen to take him on. But crediting his perseverance (and the accuracy of his persistent refusal to over-estimate public taste) does not diminish the urgency of stopping him from cutting or eliminating the competition.

The issue at hand is control of digitised television signals from satellites. What's the problem, some say, arguing that technology changes so fast that it dissolves monopoly: we should take the Internet as a model of how popular choice and technology combine for the general benefit. Yet the recent history of information technology also shows how the front man (Bill Gates is the name) scoops the pool. Once an interface is established as the industry standard, breaking into the same market becomes well nigh impossible.

The Broadcasting Act 1996 is allowing Mr Murdoch first tilt at building and selling the control mechanism for digital television. What he has just done to Warner is a ready sign of how he will use that control. The object of policy must be to establish conditions in which household choice is maximised. We need to ask whether Murdoch as a programme producer should even be allowed to develop and manufacture the means by which programmes are delivered. The history of telecommunications regulation in Britain and of the development of competition law in information technology in the US offer plenty of precedents: it would be healthier all round if Murdoch were kept out of the market for gateway technologies. Alternatively he could be forced - as Microsoft have been - to franchise the gateway technology to manufacturers of set-top control boxes, which could preserve the space needed for other broadcasters.

What is needed - the Department of Trade and Industry has yet to grasp this - is common-carrier status for the circuitry delivering digital signals to the home television, into which the programme producers' filters and smart cards can call it.

Murdoch is shortly to sign contracts for the supply of set-top boxes matching his specification. Any government action that affects those contracts will, necessarily, be retrospective and so might raise the question of compensation. Far better, however, to pay Murdoch that rent now than crimp and distort the use of this technology for decades. There has long been a need for some brave politician to think of emulating Stanley Baldwin and make the power of Murdoch and the other press barons a populist issue. That is something for another day. Today's priority is to acknowledge that public policy for digital broadcasting has a big hole in it but there are ways to fill it.

This newspaper is a competitor with Murdoch titles; we have an axe to grind. If policy-makers refuse to wake up it is, dear readers, over to you. The future of your television choice is now at stake.