MAKING SATELLITE TELEVISION WORK
The media: Paul Johnson thinks Murdoch should be allowed to get on with it
THERE is much angry huffing and puffing on the Left at the masterful manner in which Rupert Murdoch swallowed British Satellite Broadcasting. Rivals to Murdoch newspapers are also cross, but can't agree on what to do about it. The Observer, in a leading article almost incoherent with in- dignation — it was entitled 'Skyway Rob- bery' and featured words like 'disgraceful' — urged an investigation by the Office of Fair Trading. In a rather wishful thinking news story, the Independent on Sunday, under the headline 'Sky TV Satellite Deal to be Dished', reported that the IBA will revoke its contract and refuse the merged company permission to broadcast from Britain. That, if true, would indeed be disgraceful, for it would simply mean that Murdoch would move his broadcasting operation to a Continental country, which would be glad to have him, and that another 600 British jobs would go. And what would happen to Sky News, easily the best of Britain's three television news services? For the IBA to deprive us of that, simply out of wounded amour-propre, would be a monstrous attack on freedom and diversity in the media.
In any case, the IBA is not in a strong moral position on this issue, since it is arguable that it was responsible for the BSB disaster in the first place. Those who want to invoke the Office of Fair Trading and the Monopoly and Mergers Commis- sion should recall that it was the IBA's original intention deliberately to create a monopoly in satellite broadcasting. That, I imagine, is what persuaded normally shrewd companies like Pearson, Granada and Reed to invest so much money in the venture. But the IBA or the Government — or someone — failed to devise a legally foolproof monopoly formula. Murdoch and his men spotted a loophole and rushed through it to set up a service from a medium-powered satellite system. This got on the air long before BSB, a fatal blow to its chances. Worse still, the Government saddled BSB with the IBA's own MAC technology, which has proved troublesome from the start, forced the company to postpone its launch date and clearly does not appeal to viewers: BSB is reported to have sold only 117,000 squarials.
The truth, I suspect, is that the days of media regulation are coming to a close. Technology is moving too fast for a clumsy regulatory framework, which cannot change its rules quickly enough to cope with the march of science or, indeed, an ever volatile business climate. A resource- ful and enterprising man like Murdoch can usually be relied on to out-fox the bureau- crats. I have learned this lesson while a member of the Cable Authority, which has now completed its job of awarding cable franchises covering the whole country and will hold its last meeting next month. Unlike the IBA, which up till now has been a huge and expensive organisation, owning all kinds of properties, the CA has been a small, cost-effective body, pioneering the new-style 'light touch' form of regulating.
But I am doubtful whether even our deliberately limited control philosophy can be implemented in full by the joint body which now takes over our work. The regulating authority can issue a franchise to a particular company to operate a cable or television station. That permission to broadcast or cable takes the form of a contract, and the authority can in theory revoke it if its terms are broken. But in `They're stag hounds.' practice that may be very undesirable. After all, the primary function of a regulat- ing authority is to implement Parliament's decision that the country should have a service. A company awarded a franchise may get into financial difficulties, an in- creasingly likely possibility as the electro- nic media becomes more complex and competitive. If it is then rescued by another company, the terms of the original contract may be broken or fundamentally changed. But the result may well be that the public gets a more secure and possibly a better service. If the regulating authority revokes the contract and the original com- pany goes bankrupt and ceases to function, then the public gets no service at all. Businesses are constantly subject to osmo- sis, especially in a fast moving industry like television; this is not only inevitable but also desirable. Hence, while the regulator must retain a reserve power to deal with the occasional villain, I don't think it makes much business sense to regard franchise-contracts as immutable. They should merely be renegotiated. For the IBA to go to war with Murdoch over the merger would be greatly against the public interest. Indeed such irresponsibility would justify the Government in sacking the IBA's chairman. But I don't think it will come to that.
My view is that we don't need such bodies as the IBA or its successor. Because of the nature of broadcasting, there has to be a legal framework telling the companies awarded franchises what they must do and what they must not do. It should be as simple and minimal as possible and framed in such a way that its observance can be left to the courts. The administration of the service should be carried out by the broad- casting department of the Home Office. (The same principle, I may add, applies to arts funding. If it is thought desirable at all, which I do not for one moment concede, then it should be done by the Treasury: the Arts Council is an unnecessary and waste- ful middleman.)
One thing Mrs Thatcher has taught the country is to look at all quangos with resentful suspicion. But she has not gone far enough. There are still far too many of them. And they suffer from an anti- business deformation professionelle. The question the IBA should have asked itself when it heard of the merger was: is the viewer likely to get a better satellite service from Murdoch than from BSB? But they didn't ask it. What they asked was: has Murdoch broken any of our rules? The trouble is that too many people in Britain prefer this approach. Especially on the Left, and not least in the media itself, there is a widespread desire for television to be subjected to niggling and strictly enforced regulation, Yet the very same people will fight to the death for the publication of The Satanic Verses and to allow IRA killers to preach mass-murder on our television screens.
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