For the first time, Australian newspapers could come under bureaucratic controls in a market with fewer owners and less content diversity if Parliament passes proposed government legislation to overhaul media ownership laws.

Under the proposed laws, introduced in late March, media companies like America's AOL Time Warner and Britain's Pearson Plc would not be restricted from investing in Australia. Likewise, Australian media companies could own both newspapers and television stations in the same city or region.

The current media laws, introduced by the previous Labor government, bar newspaper proprietors from owning a television station in the same market and vice-versa.

But the sticking point in Communications Minister Richard Alston's proposal is that media companies that want cross-ownership exemptions would have to apply for a certificate from the Australian Broadcasting Authority (ABA), whose seven members are Canberra appointees.

To get an exemption certificate from the authority, media companies would have to satisfy it that commonly owned newspapers and television stations have their own separate newsrooms with separate editorial policies for each outlet.

The ABA would also need to approve guidelines on editorial policies on stories and opinion pieces and a detailed organisational chart on editorial decision-making responsibilities. The guidelines and the chart must then, by law, be available on the Internet.

Dogs breakfast

Introducing the proposed laws in Parliament, Communications Minister Richard Alston said the new media legislation could lead to more news, information and jobs in rural areas. But many remain unconvinced.

"The cornerstone of media laws should be to encourage diversity and pluralism, but the cornerstone of this government's legislation is a set of exemptions to cross-media rules. This is a good solid whack on diversity," former prime minister Paul Keating told a media awards ceremony at the Melbourne Press Club recently.

Keating also dismissed the role of the ABA, and its chairperson, leading government supporter Prof David Flint, saying the proposed regulator of cross-ownership exemptions was an "appallingly weak outfit".

Echoing Keating, Labor opposition leader Simon Crean condemned the Howard government's plan "as a dog's breakfast", saying "it would appear to limit editorial independence and give greater authority to the ABA to subvert existing media laws, and it would appear to do nothing to extend the opportunity in regional Australia for localised news services."

Comments in the Australian mainstream media on the proposed changes have been muted. But there has been talk that Alston watered down Australia's tight media ownership laws, in his proposals, to curry favour for the government from organisations like Rupert Murdoch's News Ltd and Kerry Packer's PBL groups.

News Ltd owns newspapers in every major city in Australia and 25 percent of Foxtel, a pay-television network. PBL controls the influential commercial television network, Nine, and most of the magazine market in the country.

Less local news

"In our opinion, the government's proposed legislation has entrenched large media companies as the effective sole owners of and gatekeepers to economically viable distribution platforms, whether those of print, broadcasting, cable or the newer Internet," said Jeffrey Cook, the director of 3V, a Melbourne-based media advocacy group.

The media advocacy group contributed in 2000 to the federal government inquiry on proposed changes to media ownership laws.

In its report to the inquiry, 3V said the trend of vital small to medium media players being forced out of independent operation of their businesses "will continue and accelerate''. This, said Cook, would have a drastic effect on Australian consumers. "The Australian consumer now has less local regional news in newspapers and television," he added.

If the government's proposed legislation is passed, Cook predicted a sale of one or more Australian networks to an American company. "Then we will see more American television programming in regional and urban markets at the expense of local content."

But some dismiss 3V's views. "An Australian market of 20 million may well be home for News Ltd, but the main game is the US market of 280 million; Europe where there are more than 300 million customers; and Asia where the figures are in the billions," said Mark Day, a columnist for The Australian newspaper.

"What Australia decides is not really critical to anything for the world's big media players," he added.

Bids in the making

Rumours circulating in the media market indicate that if the government's proposed cross-media ownership laws are passed in Parliament, News Ltd would make a bid for either television Channel Seven or Ten.

PBL is eyeing the Fairfax group, which publishes the influential Sydney Morning Herald and The Age newspapers, and The Australian Financial Review magazine. British media group Pearson Plc is also reportedly keen to acquire The Australian Financial Review and AOL Time Warner has its eyes cast on Australian pay-television.

But the socially conscious Fairfax group too has remained silent. If Alston's proposals are passed, it ironically could be in the newspaper group's interests.

As with other newspaper outlets, Fairfax's broadsheets have been badly hit by the recession in the advertising market. Big-brand campaigns, computer and travel advertising are near collapse in Australia.

Fairfax, according to The Australian , would need to diversify if it wants to survive and the paper said that the group was also eyeing one of the two commercial television networks — Seven or Ten.

But the biggest winner in the proposed media laws could be Australia's telecommunications giant Telstra. If cross-media ownership laws are relaxed, Telstra has indicated that it wants to extend its market dominance beyond telecommunications into media.

Australia's competition watchdog last weekend revealed it is unlikely to block Telstra from buying a television network or newspaper, putting the firm in the box seat to become a big media player.

Labor has criticised the idea of Telstra's expansion into media but would be powerless to block it as it does not require Senate approval — where Labor and the Democrats hold the balance of power.