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by james macgregor | October 26th, 2001 | contact: james@netribution.co.uk

Government Rebuffs TV Company Aid Call

The government has dismissed a call for emergency legislation to help television companies struggling with the global downturn in advertising.

The Department of Media Culture and Sport (DCMS) said that relaxing rules piecemeal on media ownership, which could lead to the creation of a single ITV company, was neither practical nor desirable.

The rebuff followed an appeal for greater flexibility in the industry by Sir Robin Biggam, chairman of the commercial broadcasting watchdog, the Independent Television Commission.

Speaking in Edinburgh, Sir Robin said "hopelessly outdated" broadcasting legislation was hurting companies caught between increased competition from cable and satellite and dwindling revenues.

Although the government's draft communications bill could ultimately allow ITV's big two, Granada and Carlton, to merge, it will not become law until at least 2003. This was too late given the current climate, Sir Robin warned.

Potentially Damaging

His plea for reform was backed by the opposition.

Tim Yeo, the shadow culture minister, said the government was being inflexible: "A two-year wait for change could be extremely damaging for the industry."

Nick Harvey, broadcasting spokesman for the Liberal Democrats, said he could see no objection in principle to more mergers within the ITV network.

Callum Spreng, corporate affairs director of SMG, which owns Scottish Television, Grampian Television, and The Herald newspaper, said: "We have long argued that media ownership rules in the UK need to be relaxed so that media companies can achieve scale, because that brings with it the ability to invest in new content and products."

However a spokeswoman for the DCMS said media ownership rules had to be carefully crafted to endure, with legislation expected in 2003.

"It is neither practical nor desirable to deal with this issue in a piecemeal fashion," she said.


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