Department of Culture Media & Sport meetings with BSkyB/News International and related documents

The documents obtained by SpinWatch and published in full here, show that Murdoch's Sky television have been extremely active in lobbying the British government. Their lobbying activities have not been without success. This case exemplifies the direct way in which corporations are able to exert power in neoliberal Britain.

The UK draft Communications Bill was published in May 2002. At the time the UK-based Campaign for Press and Broadcasting Freedom (CPBF) described one aspect of the bill proposing changes in media ownership as ‘a bonfire of all the rules to protect media diversity’. Partly to defuse public disquiet the government set up a joint parliamentary committee, chaired by Lord Puttnam, a Labour peer.

In July 2002 Lord Puttnam’s joint parliamentary committee presented its report, making 148 recommendations to improve the Communications Bill. Whilst the key (and controversial) ones, including ones opposing foreign ownership of ITV and Murdoch being able to take over C5, were not accepted, 120 of the recommendations were. With typical New Labour spin, the Culture Secretary, Tessa Jowell, said, ‘A good bill has been made better.’

The idea of a ‘plurality test’ for prospective takeovers and mergers was put in the bill. This move was a concession to the very strong lobbying by a range of organisations which expressed concerns about the bill’s proposals allowing US media groups to buy into ITV and Rupert Murdoch’s News International being able to buy Channel 5. Both of these were seen as threats to plurality and diversity.

In November 2002 the Communications Bill was published. As discussions took place over the following months there were fierce battles in both houses to roll back some of the more deregulatory aspects of the proposals. This included the insertion in the bill of the requirement to further the interests of the community as a whole in relation to communications matters. The responsibilities of the proposed new regulator, Ofcom, had to consider the needs of the citizen, not just the consumer. Hence the hybrid citizen/consumer usage in Ofcom documents.

The Communications Act was passed in July 2003.

These documents were obtained by Rob Evans of The Guardian using the Code of Access to government information, which the Conservative government minister, William Waldegrave, put through parliament in 1993. John Major’s government had previously blocked a private member’s Freedom of Information bill, put forward by the Labour MP, Mark Fisher. Rob asked me to analyse the documents, indicating any points of interest, and his report, co-written with David Leigh, appeared in The Guardian, January 3, 2005. This introduction to the documents is partly based on material I sent to Rob Evans, with some additional comments.

Clearly the documents reveal the high level commitment of BSkyB to lobbying on these issues. Tony Ball BSkyB CEO, Sheila Cassells Head of Economic Policy, and Deanna Bates Legal Affairs feature in the DCMS meetings (See Document 1 and Document 8). We also have to remember the pervasive presence and access to the other key shaper of media policy — the No 10 Policy Unit and Tony Blair — to which Rupert Murdoch and his adviser, Irvin Stelzer, have unrestricted access, and the role of the Murdoch press in ‘setting the agenda’ and influencing New Labour, as policy proposals were developed. It is worth stressing that the controversial proposals on US ownership of ITV and Murdoch/Channel 5 did not appear in any of the consultation documents preceding the publication of the draft Communications Bill in May 2002.

BSkyB’s intentions in this meeting seem to have been to clarify and express concern about clauses in the Communications Bill, as it was progressing through Parliament, and in particular what it deemed to be restrictive aspects in the bill as a result of lobbying by citizens groups like the CPBF, Public Voice, and the Voice of the Viewer and Listener. Other sections of the media industry were also expressing their concern about the potential opening for Rupert Murdoch to achieve even greater dominance over UK media.

BSkyB had been the focus of a good deal of criticism over the terms of access to the BSkyB platform by other media groups, and particularly the pricing and packaging of channels, for a number of years because of its dominance in satellite broadcasting. It seems that BSkyB wanted the DCMS to ensure that Ofcom would not be able to have unchallenged powers to intervene ‘in the interests of consumers’ in arrangements made by BSkyB over the pricing and packaging of channels, and that BSkyB would be able to legally challenge any Ofcom policies which it deemed detrimental to its business interests. They received this assurance.

Because a good deal of the background has been blanked out on this item (presumably on commercial confidentiality grounds) there is not much else to comment on here. (See Document 2)

This section is one which BSkyB are clearly unhappy about because the rhetoric of the bill was very much about promoting deregulation and competition, and it was only as a result of lobbying that issues to do with plurality and diversity were given more prominence. BSkyB clearly believe that ‘competition, investment and innovation’ should be given a higher priority that considerations of plurality and diversity. (See Document 3)

This is a very important item. We have the public utterances by News Corporation that Murdoch is not interested in Channel 5. Yet here BSkyB are raising concerns about the specific duty placed on Ofcom to ‘secure the maintenance of a plurality of providers of different television and radio services’ and particularly ‘whether this duty could be used to block the government’s liberalization of cross-media ownership rules or to block a merger of licensees’.

The DCMS ‘lines to take’ (Document 4) responds very specifically that Ofcom ‘will not be able to block mergers by virtue of this duty nor will it be able to make a "U-turn" on the channel 5 ownership policy. In other words, it will not be allowed to reinstate the ownership rules preventing Channel 5 licenses to be held by newspaper proprietors.’ (my emphasis) The key question is why did BSkyB want clarification about the plurality duty and the DCMS response deal specifically with Channel 5 ownership?

There is also the important statement about the media ownership review and the news provider provisions to be carried out every three years. It is well known that Murdoch refers to Sky News as ‘BBC Lite’ because of the impartiality requirement on all UK news providers. He would like a UK version of Fox News, and the nightmare scenario is that Murdoch acquires Channel 5, lobbies for an end to strict impartiality requirements on news provision, is successful, and builds a UK version of Fox on Channel 5 (which Sky News provide the news for now, as a result of winning the contract from ITN).

In Tessa Jowell’s letter (27 May 2003 (See Document 6)) she again confirms that ‘there is no intention that the plurality duty in clause 3 could be used to block a merger.’

One has to deduce from this concern by BSkyB about this specific issue that they certainly do have some interest in the acquisition of Channel 5, although they know that it would be foolish to state this publicly until they are ready to make a move. (See Document 4)

Cannot really comment on this section as I am not familiar with the policy details. (See Document 5)

Letter to Les Hinton (30 May 2003) (See Document 7)

This relates to the ‘public interest’ proposal regarding newspaper mergers and assessing the impact of a merger on ‘the accurate presentation of news, the free expression of opinion and the plurality of views available’. This caused a fierce response from the newspaper industry about regulatory creep by Ofcom. The requirement still remains, if the DTI or DCMS Ministers judge there is an issue of concern, for the activation of a ‘public interest’ inquiry.

These documents give us an intriguing partial glimpse into the importance attached by News International to sustained and continuous lobbying, not just in terms of media policy, but also across a range of policy issues which Rupert Murdoch perceives will have an impact on his business, from the European Union to industrial relations legislation. It has been a feature of Labour policy, since Tony Blair’s flight to Australia in summer 1995 to address Rupert Murdoch’s executives, that Murdoch’s needs and wishes became very much New Labour’s needs and wishes. To reiterate, the controversial proposals in the Communications Bill about ITV and Channel 5 were inserted through the intervention of Downing Street. In earlier consultations on the draft Communications Bill there was no mention of them.

Compared with the tiny resources which public interest groups can muster to lobby on media policy those of media groups like News International are massive. Of course through determined lobbying, and the support of people like Lord Tom McNally and other peers, some changes were made by public interest groups during the passage of the Communications Bill, but the uncomfortable truth is that the main proposals and changes in terms of media ownership were achieved through the corporate lobbying of groups like News International, Carlton/Granada and the commercial radio industry.

We really do need more openness and information about the lobbying activities of media groups, both national and global, and their influence on the shaping of the UK government’s media policies, but we are unlikely to get it from a government that seems to be on the one hand deeply secretive about policy development, and on the other, easily seduced by corporate lobbying. That is why we need to use the English Freedom of Information Act which became effective in January 2005, and test its limits, to establish what meetings took place, with whom, and when, with Tony Blair’s Media Policy Unit and other ministers in the months leading up to the crucial changes in the draft Communications Bill in May 2002.

One final point. UBM; the business information group led by Lord Hollick has a 35% stake in Channel Five. A new chief executive, David Levin, may well want to get rid of this remnant of what used to be United News and Media, owner of the Express Group and various ITV franchises. RTL, part of the giant Bertelsmann global media group may also be reviewing its plans for Channel 5. RTL chief executive Gerhard Zeiler’s stated aim, according to The Guardian’s Media Business editor, Jane Martinson, ‘of being among the top two in each of RTL’s markets is unlikely to come true in Britain. His group also prefers to operate TV assets in tandem with radio businesses — something it lacks in Britain. Five into RTL simply does not go.’(January 5, 2005). The most likely buyer, in spite of all the protestations and denials, would be BSkyB.