Why the U.K. media deserve Rupert Murdoch: Somebody has to teach them how to compete.

Media criticism.
Oct. 15 2010 7:43 PM

Why the U.K. Media Deserve Rupert Murdoch

Somebody has to teach them how to compete.

(Continued from Page 1)

Everybody knows how Murdoch introduced competition to the U.K. newspaper industry—breaking the unions, introducing new technology against the screams of the Luddites, cutting prices, and, well, tarting up the whole package. Less known is the story of how he absorbed billions in losses to found a U.K. satellite broadcasting service and prevail as the controlling owner of BSkyB. That Murdoch is even in a position to extend his stake in BSkyB is a product of his wicked desire to beat the competition. Without him, there might not even be a successful satellite service in the U.K. If satellite broadcasting is of such monumental importance to U.K. media, why didn't the petition-signers at the Guardian et al. jump in with their own satellite services? Perhaps if the media establishment hadn't toiled so hard over the decades to exclude new competitors, there would be other successful upstarts besides Rupert Murdoch in the media market, and he wouldn't loom so large.

Noam observes a monumental downside to a highly regulated telecommunications scheme dominated by established cartels and political interests. Not only is innovation crushed, so is expression. Noam writes:

A television of privilege is a television of limited independence. The absence of independence does not mean that these television channels will extol the government in power. But it implies caution in being identified as oppositional. The television of privilege tries to make no political waves. The American experience in the first decades of television provides ample evidence for self-imposed caution. [Emphasis in the original.]

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Murdoch owes some of his success in the United Kingdom and the United States to hidebound regulations that discourage all but the most driven capitalists to compete. (Example: Murdoch so believes in his competitive powers that he thought that he could do business as a broadcaster in China!) Once Murdoch burrows in, he profits from the regulations because he understands precisely how best to placate the regulators. Oddly, that makes him both a victim and a benefactor of the United Kingdom's anti-competitive ways.

If the petition-signers were serious about thwarting Murdoch's BSkyB takeover, they'd do better to increase competition than restrict it. Why not chop the publicly funded BBC into a dozen pieces and privatize them? (That's what Murdoch's son James came close to advocating in a speech (PDF) last year, but what he and his father really seek is a weakened BBC, not several new nimble entities nipping at News Corp.'s flanks.) Why not liberalize the allocation of spectrum? Why not allow spectrum-holders to reallocate their spectrum to new uses without having to clear regulatory hurdles? The very best way to weaken Murdoch would be to release the Kraken of competition.

******

They should release the Kraken here in the United States, while they're at it. Murdoch sort of looks like the Kraken, doesn't he? Express your mythological sensitivities in an e-mail to slate.pressbox@gmail.com. Monitor my Twitter for my compensation demands. (E-mail may be quoted by name in "The Fray," Slate's readers' forum; in a future article; or elsewhere unless the writer stipulates otherwise. Permanent disclosure: Slate is owned by the Washington Post Co.)

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