Puttnam forces peace deal from government

Lord David Puttnam, the Labour peer who rebelled against the government's communication bill, has forced a spectacular compromise from Culture secretary Tessa Jowell.
In order to stave off defeat in the upper house, Ms. Jowell agreed to Lord Puttnam's demand that any future broadcasting mergers and acquisitions should be subject to a public interest plurality test. Lord Puttnam insisted on the provisions so that Ofcom might have the option to bar any acquisitions that would create an overly powerful media block – as would exist if Rupert Murdoch were to purchase five. Crucially, the government have also agreed to underwrite Ofcom against any counter suits by cash rich media companies, allowing the regulator greater practical freedom to manoeuvre.
Accordingly, Lord Puttnam has withdrawn his opposition to the bill in favour of a government amendment.
Furthermore, Lord Puttnam has compelled the government to back down on their refusal to allow ITV to own more than 40% of ITN. Lord Puttnam maintained that the public interest is served better by a strong ITN in competition with Sky and the BBC, and that if ITV continue to be forbidden from owning their own news provider it was only a matter of time before Sky – which has already led one assault on ITN's position – took over.
ITN have welcomed the move, which they believe will strengthen their position. Although ITN will most likely be soon purchased by ITV, Ofcom will retain strong powers to regulate its budget, easing the fears of those who believed ITV might have been tempted to cut costs in times of trouble.
The compromise was not entirely in Lord Puttnam's favour, however, as he agreed to remove his opposition to provisions for foreign ownership of British broadcasting companies. Under the new bill US or other foreign companies could buy part or all of ITV – something that makes many in the industry very nervous.
(GB)