As MPs call on Lord Justice Leveson to comment on the shameful stalemate that has prevailed over press regulation since the agreement of the Royal Charter in March, the House of Lords select committee on communications is quietly and seriously examining the question of what to do about media ownership.
We observed the committee on 25 June as it heard evidence from three important voices: Chris Goodall, a former competition commissioner who composed a report for Enders Analysis arguing for a 15% cap on cross-media revenue; Jonathan Hardy, journalism lecturer and national secretary of the Campaign for Press and Broadcasting Freedom; and Will Hutton, an economist and former editor of the Observer.
Hutton gave detailed testimony about changes in the media world over the last twenty years; about the fusion of news with comment under politically-minded proprietors and the way the national press has distorted conversations around crime rates (which have long been lower than media panic suggests) and EU regulations (which are selectively reported). The real meat of the session, however, was with Goodall and Hardy’s testimony.
Goodall’s 15% cap is seen by many as the starting point for discussions about media plurality. It was backed by Harriet Harman in her call for media plurality regulation and we endorsed it too in our submission to the Lords. The cap would apply not just to news and current affairs providers but to all media “gatekeepers” across mediums as diverse as movie distribution, videogames, and book publishing.
Lord Razzall, a former election chief for the Lib Dems, asked whether it really made sense to consider revenue “like for like” – i.e. whether “a pound of revenue” from a videogame was really worth a pound from a newspaper. But Goodall argued that revenue was the primary factor in a company’s “ability to dominate a market.”
The Lords then heard precisely how market interventions might work. As Hardy argued, the online boom of the 21st century makes traditional regulation models like full licensing (a la broadcasting) inappropriate. Instead, he said, we need flexible rules and public interest obligations which can be applied to any company, no matter the method of their distribution. As we’ve suggested in the past, he mooted that anyone with more than a 15% share of an individual market should be subject to behavioural obligations: “compliance with codes of conduct agreed across the industry,” for example, and “some commitment to basic working conditions and pay – which is an issue across the creative industries.” At the stronger end of the market, he said, companies should “open up access to independent suppliers,” and, ultimately, divest themselves of full ownership.
Baroness Fookes, a former MP and Conservative life peer, asked what would happen if a successful company grew organically to the point where it was required to break up its share base. But for Goodall, this was simply something that would have to be accepted. “If he want plurality,” he said, “we need to cap success.” Lord Razzall pointed out that this principle is already observed in all competition law; media plurality just means recognising the media as a special sector of key democratic importance.
Both witnesses placed a great emphasis on ‘bright line’ regulation – clear thresholds which would minimise the discretion of secretaries of state. “Industries quite like bright lines,” said Goodall: “they know where they are, there’s no regulatory uncertainty. The worst thing for a company is uncertainty as to what you can and can’t do.” Moreover, he said, it would “reduce the scope for the kind of regulatory brinksmanship that has disrupted the working of communications policy” – companies “are able to outgun Ofcom every single day of the year.” Later, he urged the committee: “Whatever you decide, please go for something extremely simple.”
In response to questions from Oxford don Baroness Deech, Hardy stressed that while the BBC and its great influence should always be included in plurality calculations, it should never be used as an excuse “to reduce plurality elsewhere in the market.” Furthermore, he said, “the mechanisms to deal with the BBC’s market presence should be handled elsewhere…the market thresholds that should apply to market actors should not include the BBC.”
To the clear surprise of some committee members, however, Goodall argued for a split of the BBC’s news-gathering function from its mother organisation, claiming that even with all its statutory checks and controls it was simply too big a media actor to be safe. He pointed to “remarkably poor coverage of the changes to social security and the NHS by this government”, which he said the BBC ignored “because they are too politically contentious.” This, he argued, had a knock-on effect on coverage by other outlets because of the extent to which media influence each other – not by spinning the news one way or another, but by setting the general agenda. “That’s how you influence the news,” he said, “not by being partial, but by saying ‘this is important, and this is not important.'”
Ultimately, Hardy claimed, plurality policy cannot be set purely based on market analysis. “We think these are in the end democratic matters,” he said, “and they need to have a regulator influenced by democratic input in order to make judgements. There is a qualitative judgement, in the end, about where the public interest lies in communications, and that must be supported by market analysis, but not determined by it.”
Finally the two witnesses were asked if there was anything else they wished to bring up. Goodall offered a stark warning: “Revenues do matter; that is the way large corporations influence the nature of the culture and the political process.” But Hardy ended with a note of hope for real action on plurality, saying: “The old world of rigid ownership caps can’t be sustained, but the new world needs to ensure the public interest, and your investigation carries great weight and legitimacy in this debate.”