Tim Adler reports on political panic in London over the Rupert Murdoch-led News Corporation’s proposed buyout of BSkyB, a British pay-television company:
Murdoch’s plans will come under concerted attack in the House of Lords today. [Labour Party peer] David Puttnam will tell his fellow Lords that the buy-out would make Murdoch the most dominant media figure in any democracy in the developed world, with a greater share of the sector than even Silvio Berlusconi’s in Italy. Puttnam, who is deputy chairman of Channel 4, will tell the Lords — the UK equivalent of the Senate — that the power which News Corp would exert “is one that would not be tolerated in any other democracy, certainly not the United States”.
And what better defender of democracy than Lord Puttnam, a member of an unelected legislative body whose members are appointed (for life terms) by the sitting government, in Puttnam’s case because he was one of the Labour Party’s biggest donors. Of course, Puttnam needs to tread out the “threat to democracy” argument because he has no other case against the BSkyB buyout — even the antitrust case is non-existent, as the non-Murdoch-owned, left-of-center London Guardian explained:
The problem for the anti-Murdochistas is that on straight competition grounds, it is hard to argue against a News Corp/Sky deal. Firstly, back in 2007 the Competition Commission concluded that News Corp had “material influence over Sky” — i.e., it pretty much owned it. So, for the competition regulator, a full buyout means nothing much new. Secondly, competition watchdogs treat media markets as discrete — newspapers are considered separate to pay-television. Because News Corp plus Sky would not get any bigger in either newspapers or pay-TV, there is little on this view to get worried about.
The Guardian notes that opposition to the BSkyB deal is rooted in an active lobbying campaign orchestrated by Vince Cable, the Liberal Democrat Party business secretary in Conservative Prime Minister David Cameron’s coalition government, and fueled by News Corporation’s rivals in the newspaper industry. Cable is pressuring Ofcom, the British equivalent of the FCC, to report back to him on how to stop the deal. Meanwhile, the buyout must also pass muster with the European Commission’s antitrust authority.
Superficially, the argument, as outlined by the Guardian, is that a fully integrated BSkyB would allow for “anticompetitive bundling,” i.e. “a ‘get-your-Times-free-with-Sky’ discount offer that rivals could not match.” This is similar to the European Commission’s case against Microsoft’s “bundling” of its operating system and web browser. It’s the type of argument you rarely see with U.S. antitrust authorities, at least with regard to distinct products like newspapers and pay-television. Even the Federal Trade Commission wouldn’t try to argue those were part of the same “market definition.”
On the other hand, American regulators, like their British and European counterparts, are inherently squeamish about any alteration to the status quo as it relates to the media. Just witness FTC Chairman Jon Leibowitz’s leadership of a campaign to “save journalism” through new government protections for incumbent firms (such as taxing private media companies to subsidize National Public Radio). Although such interventions are sold as protections against the horrors of consolidation — “Rupert Murdoch will control our thoughts!” — it’s really just another bait-and-switch designed to expand the anti-democratic monopoly known as government.
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I worry that BSkyB and News Corp wield too much influence, certainly. But, only when that influence is political. So, the enemy remains constant: the state.
The whole situation is rather revolting. In the US we are down to, how many? six dominant media companies, two of which are owned by war contractors and therefore are captives of the federal gov’t. But no matter, really, since all are required to have licenses. The USG owns the airwaves. Since local newspapers have been going extinct for about 20 years, there is essentially no free market in news EXCEPT on the internet. Thank heaven for the internet, until the kill switch is installed, anyway…
The whole anti-Murdoch sentiment in Britain at the moment reeks of hypocrisy. The BBC had the sheer temerity to criticise the move because it would damage media plurality! This is despite the BBC being funded by a compulsory poll tax, known as the Licence Fee, which everyone has to pay just to watch a television in one’s own home, even if one dosen’t watch the BBC. The BBC’s tentacles have destroyed local news centres. Sky is its only main competitor. And one voluntarily chooses to pay for Sky! What a remarkable idea!!
The whole situation is rather revolting.
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