Australia to free up media ownership, shares rise

SYDNEY, Mar 14 (Reuters) Australia's government today unveiled long-awaited media reform plans centred on freeing up cross-media and foreign ownership laws in a move that boosted media stocks as investors speculated on changes to the sector.

Communications Minister Helen Coonan proposed allowing any company to own a newspaper, two radio stations and a television station in the one market and suggested foreign ownership restrictions be scrapped, in moves widely expected by analysts.

Current rules prevent a television licensee from owning more than 15 percent of a newspaper in its licence area and vice versa.

Foreign companies cannot own more than 15 per cent of a TV station or 25 per cent of a major newspaper.

Shares in television broadcaster Ten Network Holdings Ltd jumped 3.2 per cent to a 2006 closing high of 3.20 Australian dollar, while publisher John Fairfax Holdings Ltd added 2.8 per cent to 4.07 Australian dollar and Seven Network Ltd rose 1.5 per cent to a record closing high of 9.45 Australian dollar.

Publishing and Broadcasting Ltd, which controls Network Nine, and News Corp Ltd, which owns a stable of Australian newspapers, was flat in line with the overall market.

''The speculation as to who's going to do what to who ticks all their share prices up. But I think this may yet again be a temporary blip. All (the proposal) does really is removes the uncertainty,'' Shaw Stockbroking media analyst Greg Fraser said.

''My view has long been that we're perhaps more likely to see assets changing hands as opposed to whole company takeovers.'' In a discussion paper on the media reforms released today, Coonan suggested changes to media ownership rules come into effect either in 2007 or 2010, when the country is due to switch to digital television transmission from analogue.

Coonan also wants to retain a minimum four commercial media groups in regional markets and five in mainland state capitals and said any ''material'' foreign investment would still need approval by the Treasurer.

''There is a compelling case for change and if the government does not act, then there is a genuine risk that Australia will become a dinosaur of the analogue age,'' Coonan said in a statement.

Coonan's wide-ranging proposals, on which the government has asked for public comment by April 18, also end a moratorium on new commercial television licences from December 31, 2006. Any media reforms will need to be approved by parliament.

''Australia needs a level playing field in terms of investment and innovation ... so that broadband penetration and digital penetration generally can catch up with the rest of the world,'' Shaw's Fraser said.

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