Rupert Murdoch is weeks from conquest

Who can curb the mogul's power now the politicians have sold out to him?
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The Independent Online
Nearer and nearer draws the time. Nothing can stop it now. I hear that, as early as this week, Rupert Murdoch will announce he has signed contracts with three manufacturers to start producing an initial order of 150,000 set-top boxes (with many millions to follow) that will sit on top of the television and deliver the only access to the digital future. Within a few years the whole of British broadcasting will be under his control, the only entry to the new technology will be with his permission, through his gateway.

If all that is gobbledegook, and the very word "digital" sends you into future-denial, this is what it means. The next generation in the unstoppable onward march of technology will be television with 150 channels, wide screen, top quality sound, letting viewers shop, bank, call up films and archive programmes, book tickets or join in game shows interactively.

The boxes to receive this brave new world will cost pounds 400 to make, but will be sold for only pounds 200, being subsidised by Murdoch, banks, manufacturers, retailers and BT in what increasingly looks like an unholy monopolistic alliance. It is worth their while to pay this hefty subsidy to make the first boxes cheap because once they are in place they will be an effective monopoly forever - a good investment if ever there was one. It is exceedingly unlikely anyone else will be able to raise the risky investment capital to compete with a second set of boxes against those already there. It would be like investing in the old Betamax system once everyone had VHS videos.

European law requires Murdoch to allow other broadcasters, such as BBC, ITV, Channels 4 and 5, to use his system on "fair" terms (undefined). But that means paying him for the privilege and agreeing to his terms. Menus of their programmes might be harder to find and they might be on Channel 209. Murdoch will have access to all his competitors' scheduling plans - nowadays a deep trade secret - so he can pitch against them. He will be king.

Oftel will regulate the price he charges - but since even the most sophisticated financial analysts are bemused by the true state of Murdoch's power, let alone his movement of capital and costs between his many operations, it hardly seems likely that Oftel will not also be bamboozled.

All this could and should have been prevented in the Broadcasting Act by several simple measures: all his boxes should have been obliged to contain a "common interface", a means by which other systems could be attached to his hardware, making it non-exclusive. He could have been obliged to sell out his patented technology to any manufacturer who wanted to make competing boxes that would be compatible with other systems. The slot on his box that takes a smart card to decode the signal could be obliged to take other broadcasters' cards.

Too late now. The contracts to make his boxes are almost signed. The future is already mortgaged to Murdoch. Who is to blame? Both Conservative and Labour parties who have caved in cravenly to the power of Murdoch's might in the run-up to the next election. Courting him because of his newspaper political power, they have sold the future. It has been one of the most shameless conspiracies in Westminster for some time.

But that is water under the bridge. The dilatory Department of Trade and Industry, charged with making new regulations to try to compensate for the vacuum of regulation in the bill, is due to publish them in two weeks' time and they will become law by December. It is too late now to demand the necessary changes in the hardware. But the Government could still, like the last good fairy at the christening, at least mitigate some of the damage it has done already.

Most important, it could make conditions on the licences retrospective, so the boxes Murdoch has ordered could still be obliged to conform to stricter rules. The regulations could stipulate how the programme menus should be presented when people turn on their sets so everyone gets a fair display. They need to set up a disputes procedure for aggrieved broadcasters to complain if Murdoch cheats on them.

Meanwhile Murdoch's power billows out like a mushroom cloud over us all. He may soon take over Thames Television, Grundy Television (makers of Neighbours) and Select TV. BSkyB pays no corporation taxes yet. It does not even pay the licence fee and tax on ad revenue that all ITV companies have to pay.

Andrew Neil's description of his life as editor of The Sunday Times for 11 years shows the workings of Murdoch's mind. Murdoch uses his newspapers as leverage to get what he wants for his far more important television interests - and it works. While rabidly anti-communist, he wanted Britain to cave in to the Chinese over Hong Kong for fear it would jeopardise his hugely lucrative Star satellite. "Where political principle and expediency clash, you can be pretty sure expediency will win," writes Neil. Tellingly, as was widely reported at the time, Murdoch unceremoniously threw the BBC off his Star satellite when it became a political embarrassment with uncompromising documentaries on China. That hardly bodes well for Murdoch as gatekeeper to all of British television.

Since last I wrote about Murdoch's threatening designs on the digital future, I have had an avalanche of anxious letters asking what people can do in the face of the politicians' silence. One small suggestion - puny, perhaps, in the face of this global force. The Consumers Association has already said that its advice to would-be purchasers of digital boxes is not to buy one until they are made compatible with other systems. If they, together with the National Consumer Council and others, were to mount a vociferous campaign, they could frighten off enough potential purchasers. Who wants to buy a new device that may soon be redundant? If enough refuse to buy, then Murdoch's boxes will become redundant and he will be obliged to incorporate a common interface to take all systems. It's a long shot, but worth trying.

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