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

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 (Culture, Media and Sport) at least every three years. Our last review was in November 2006.

In Government's Digital Britain Final Report, Government asked us specifically to consider the impact of the current local media ownership rules on the sustainability of local media.

On 31 July 2009 we published a Consultation Document which set out our proposed recommendations. Consultation responses were generally supportive of these recommendations. This report sets out our final recommendations to the Secretary of State (Culture, Media and Sport), taking into account all consultation responses.

We have found 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. However, these industries are facing significant economic changes. These are most acute in local media. Some relaxation of the local ownership rules will benefit citizens and consumers by helping to ensure that local content continues to be commercially provided. Therefore, we recommend:

• Removing the local radio service ownership rules and the local and national radio multiplex ownership rules. This would reduce regulation on an industry facing difficult market conditions and increase the likelihood that stations continue to be viable. Research also shows a majority of consumers are not concerned about single ownership within local commercial radio.
• Liberalising the local cross media ownership rules so that the only restriction is on owning 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 we are not recommending complete removal of the rules.

There is little current evidence of change since Parliament put in place media ownership rules that affect the operation of the remaining rules. Therefore, we do not recommend 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 media can still influence society.
• The appointed news provider rule which helps ensure national and international news on 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 Government to intervene to prevent media mergers on public interest grounds, including for the protection of plurality, as Parliaments original rationale is unaffected.

It is now for Government to consider what action to take and ultimately for Parliament to make any changes through secondary legislation.

• Report to the Secretary of State (Culture, Media and Sport) on the Media Ownership Rules [pdf]
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