Media Mergers: Diversity delusion

An edited version of this article appeared in Village magazine, December 2014 edition

The Bell Telephone Company was born out of the great communications revolution at the end of the 19th century, and dominated the American business landscape for a century afterwards, until it was broken up by the US Justice Department in 1984. In its place, the “Baby Bells” were left to compete both with each others and with new upstarts entering the no longer monopolistic marketplace.

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The resulting competition has been credited with multiple innovations in communications technology including mobile wireless service, fibre optics, microprocessors, voice over internet protocol, Wi-Fi, landline broadband, and wireless broadband.

It’s difficult to imagine the same breakup happening today. Ronald Reagan may be venerated by US neo-conservatives, but they show little inclination to prevent monopolies forming, still less to break them up. The prospect of any White House administration (either democratic or republican) trust-busting modern communications giants such as Google or Apple is slight to say the least. Any justice department plan to do so would quickly be vetoed by the West Wing.

The same reluctance made be behind the slow-motion roll-out of proposed guidelines on media mergers in Ireland, with the political will blunted even more by the target, the media outlets which can make or break political careers by the tone of their coverage. An advisory panel was first set up to look at media mergers in March 2008, so long ago that it may be defined as BC (Before Cowen).

The Competition and Consumer Protection Act puts the recommendations of the group into law, and moves responsibility for media mergers away from Jobs, Enterprise and Innovation to Communications and Natural Resources. Submissions on the draft guidelines under the act are invited before 22 January 2015, but in truth, the entire effort is a damp squib.

In a speech in early 2012, the then minister Pat Rabbitte spoke about media diversity at a conference organised by Nessa Childers MEP. But unlike recently retired Press Ombudsman Prof John Horgan, who last May identified the “elephant in the room” in any discussion on media in Ireland as ownership concentration, Rabbitte identified a different species of elephant: the internet.

Rabbitte’s speech, which was long on the business difficulties facing media owners both from recessionary markets and new online competitors, said little beyond broad statements of principles about how media diversity might be ensured, save that it required both diversity of ownership and diversity of content.

The draft guidelines, prepared by a new minister, follow much the same tone. While “significant interest” in a media company is defined (more than 20% of voting strength, although it may be 10-20%) there’s little indication of what will happen once that threshold is crossed. More importantly, there are no iron-clad definitions of what constitutes “significant interest” across multiple media organisations. Alex White, having been notified of any proposed mergers and considered any relevant reports, shall make a determination.

History suggests this will lead to a benign regime of non-regulation. Ownership regulations laid down when local radio was legalised and licensed were progressively stripped away over the years as media groups accumulated properties.The Broadcasting Authority of Ireland decided in 2012 that there was no reason to investigate whether Denis O’Brien, owner of several radio stations and major shareholder in Independent News and Media, had excessive influence. There is little evidence of any political will to stop the same process continuing in and across Irish media today. When the final decision is made by a minister, whether Alex White or his successors, and not by a politically independent statutory regulator, this becomes even more likely.

At the heart of this non-regulation is a singular failure of will. Rabbitte in 2012 noted that diversity of content was essential to ensuring that the full spectrum of views, interests and concerns prevalent in Irish society are represented fully in media. “This plurality is the key metric – and the one that should concerned us most,” Rabbitte intoned. But by not defining the “key metric” in the legislation, the government has ensured that any concerns over future merger proposal can be fudged. In this respect, the internet is a handy scapegoat. Don’t be surprised to hear mergers defended with arguments to the effect that a newspaper/broadcasting consolidation cannot pose a threat to diversity of content, because anyone with a smartphone can set up a blog.