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Ofcom has a statutory duty to review the operation of, and recommend any changes to, the media ownership rules including the media public interest test. We must report to the Secretary of State (for Culture, Media and Sport) at least every three years.

Parliament has put in place media ownership rules for television, radio and newspapers. In the interests of democracy, their aim is to help protect plurality of viewpoints and give citizens access to a variety of sources of news, information and opinion.

The media ownership rules operate in parallel to the merger regime, which aims to prevent consolidation that would substantially reduce competition in particular markets. The merger regime may indirectly protect plurality by doing so. The Secretary of State (for Business, Innovation and Skills) can also intervene in a media merger if it raises public interest considerations, including plurality.

In its Digital Britain Final Report Government asked us to consider specifically the impact of the current local ownership rules on the long term sustainability of local media.

Our evidence shows that even though consumers are increasingly using the internet as an alternative source of news, there is still strong reliance on television, newspapers and radio. Yet these industries are facing significant economic changes. These are most acute in local media. Subject to consultation, our recommendations are:

• To remove the local radio service ownership rules and the local and national radio multiplex ownership rules. Removal would reduce regulation on an industry facing difficult market conditions and may allow stations opportunities to be more viable. Research also shows a majority of consumers are not concerned about single ownership within local commercial radio.
• To liberalise the local cross media ownership rules so that the only restriction is on ownership of all three of: local newspapers (with 50% plus local market share); a local radio station; and a regional Channel 3 licence. This liberalisation will increase the flexibility of local media to respond to market pressures. Consumers still rely on television, radio and press for news, so going further to complete removal of the rules could reduce protections for plurality.

As there is little evidence of change that affects the operation of the remaining rules, subject to consultation, we do not propose to recommend any further changes to:

• The national cross media ownership rules which restrict cross ownership of Channel 3 and national newspapers, as they both remain significant sources of news.
• Ownership restrictions which apply to television and radio broadcasting licences to guard against undue influence, as these remain media with potential to influence society.
• The appointed news provider rule which helps ensure national and international news through Channel 3 is independent of the BBC and adequately funded, as Channel 3 remains the most watched alternative source of broadcast news after the BBC.
• The media public interest test which continues to provide a backstop for the Secretary of State (for Business, Innovation and Skills) to intervene to prevent media mergers on public interest grounds, including for the protection of plurality, as Parliament’s original rationale is unaffected.

Given the changes underway in media consumption and in the media industry, it will remain important to test regularly whether the ownership rules continue to operate to protect plurality. In this consultation we welcome views and evidence on whether these recommendations are appropriate. After consultation and our final advice, the Secretary of State and Parliament will decide whether any changes should be made through secondary legislation.

• Media Ownership Rules Review [pdf]
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