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Thursday, March 03, 2011 

Hoist by the Telegraph's petard.

Say hello to your new overlords, remarkably similar to the old ones.

When it comes to great examples of being hoist by your own petard, we now truly have one to overshadow all the others. The Telegraph couldn't possibly have known when it sent its undercover reporters out masquerading as constituents in an attempt to extract some juicy gossip with which to fill space in the run up to Christmas that Vince Cable would be indiscreet enough to boast that he had "declared war on Rupert Murdoch", yet it was still stupid enough to run parts of the surreptitiously recorded conversation instead of spiking the entire exercise. It was only too easy then for the strangely omitted part to be leaked to Robert Peston, and so with it went crashing down even the outside possibility that Cable might block News Corporation's bid to swallow BSkyB whole.

You do have give credit to Jeremy "Berkeley" Hunt, though. Just as there was never any chance of the deal being blocked by a Conservative government already as cosy with the Murdoch press as New Labour ever was, so it would be a blown raspberry too far to just wave the deal through. No, there had to be a sacrificial offering, even if it was so minute as to not even come close to appeasing the other media gods expressing their wrath at the potential of even more market share being clawed away. Hence Sky News, hardly the most cherished part of the satellite company from a Murdoch perspective, is to be sheared off and guaranteed almost exactly the same level of independence as the Times and Sunday Times were back in 1981 when the condition of their sale was the creation of a board of directors who were meant to have the ultimate say over the hiring and firing of editors. A year later Murdoch sacked Harry Evans without deigning to ask the board of their views on the matter. The one difference is that neither a Murdoch nor a News Corporation employee can sit as chairman, thereby guaranteeing the channel's complete impartiality for perpetuity.

It's nonsense of course, although as Steve Hewlett writes you can't help but admire its elegance. The new Sky News holding company will have the exact same shareholding as News Corp currently has in BSkyB, the same shareholding which ensures that the likes of the Sun treat the broadcaster as all but one of its own. In any event, even the most ardent Murdoch loathers, and that includes myself, would be hard pressed to claim that Sky News has ever been anything but independent from Keith, slightly right-of-centre general view of the country notwithstanding. Its impartiality has long been guaranteed by Ofcom and its predecessors, leaving the possibility of Murdoch turning it into a British version of Fox News moot. Not that there's anything to stop News Corp in 10 years time from dumping this new arrangement and starting from scratch - indeed, they've only agreed to licence the brand for 7 years with an opportunity for another 7 once those are up.

By then the media environment will have been transformed irrevocably, and Murdoch will be in all but dominant control. It's worth remembering that the BBC recently signed a deal which froze the licence fee at its current rate until 2016, ensuring that it will have to stretch itself ever more thinly in order to carry on doing just what it does now. No wonder then that the deal has so terrified the smaller players, who came together in an unprecedented coalition to push for the deal to be rejected. Today's announcement is essentially their worst nightmare come to life: the plurality test supposedly reached, there's nothing to stop News Corp from bundling together more and more of its products. Want the Sun or the Times along with your Sky television, telephone and broadband? Even if you don't, you'll probably end up getting it. Just as much as the newspaper industry has begun to start stripping out the bulk sales that have for so long distorted the figures, the spectre of a new version of the price wars of the 90s hovers back into view, just when they reach the point of not being able to afford to go through it all again. The Barclay brothers probably have deep enough pockets to ensure that the Telegraph can survive, but the Independent and Guardian, different target markets or not, would be put in even more trouble.

The perverse situation that has been reached is that the government has essentially decided that what's good for Rupert Murdoch is good for Britain. This might make more sense if Sky was actively investing in original programming and creative content for its channels, except as Mark Thompson pointed out it only spent a paltry £100m on new productions last year, while splashing the equivalent of the whole of ITV's programming budget on marketing. You can't have failed to notice the launch of Sky Atlantic, advertised absolutely everywhere incessantly, a channel that will show nothing but the best that err, America has to offer. The Sky Arts channels are the only high-brow investment that Murdoch has almost ever made, and they were originally an outside introduction. Everything else has resulted in a race to the bottom, one which has had the effect of coarsening the nation along with it.

Worst of all is that simply isn't a way back once Sky has been gobbled whole. Murdoch might be 80 and destined to meet the reaper before too long, but the power his empire will have over governments will continue regardless of who steps up afterwards. Unlike Silvio Berlusconi, none of the Murdoch clan appear to have political aspirations; they've learned how to get their way without seeking office themselves. By wielding an ever bigger market share, the ability of governments to operate without having first gained their approval will be even further diminished than it currently is. Already we've seen with the Metropolitan police's pitiful initial investigations into phone-hacking at the News of the World just how entrenched the reciprocal relationships between the main powers in the land have become, and with this deal they'll be even fewer places to turn to. Democracy, when it comes down to it, can be sold just as cheaply for short-term gain as everything else.

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