The Department of Communications has paved the way for a relaxation of media ownership, with a report that calls for a ''rethink'' on regulation. The paper on media control and ownership notes that repealing ''reach rules'' that prevent the Seven, Nine and Ten networks merging with their regional counterparts could ''lead to some level of consolidation'' in the free-to-air TV sector, but would be ''unlikely to result in a substantial reduction in the number of commercial television broadcasters operating in the affected geographical markets''.
On Wednesday a department spokesman said existing rules had been established in a ''different environment''. This follows Hamish McLennan, the chief executive of struggling Ten Network, saying existing rules are ''outdated, ineffective and anti-competitive'' and ''must be repealed urgently''.
''The paper recognises the financial headwinds that Australia's news organisations are facing and which are resulting in heavy job losses in newsrooms across the industry, including at Ten Network, Seven Network and Fairfax Media,'' he said in a statement.
Ten's larger rival, Nine Entertainment Co, which last year attempted to buy Ten's regional affiliate Southern Cross, also welcomed the report. ''Nine notes there was a bipartisan report from the last Parliament unanimously recommending the removal of the reach rule,'' said a network spokesman.
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''We believe removal of the rule is critical to the future of broadcasting and regional broadcasting in particular, and we will work with government throughout their consultation process.''
Kerry Stokes' Seven West Media, which has stood alone among commercial broadcasters in refusing to back the abolition of the reach rule, said it preferred to maintain a ''polite silence''.
Rhys Holleran, chief executive of Southern Cross, said the company had ''said a million times that we think the reach rule belongs in the last century''.
The department's paper does not make recommendations and notes that the federal government will ''consult widely'' before developing proposals this year. It says the existing ''two-out-of-three'' rule - which prevents any one group from owning a commercial TV broadcast licence, a commercial radio licence and a newspaper licence - does not stop ''some of the more significant hypothetical media transactions''.
''It is also relevant to note that while the removal of the two-out-of-three rule would allow for consolidation within the established media platforms, the extent of any actual merger or acquisition activity may be moderated by the broader financial headwinds facing the established media,'' it said.
News Corp and its half-owned pay TV company Foxtel have been widely tipped as a potential suitor for Ten Network.
The Australian Communications and Media Authority last year indicated it would not object to a bid, but said it would examine all the Australian media assets owned by the Murdoch family.
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