Australian government to change media reform plans

CANBERRA, Oct 10 (Reuters) The Australian government will change its package of planned media reforms to impose new limits on mergers and to force country radio stations to broadcast local programmes, Communications Minister Helen Coonan said today.

The changes were made to ease concerns from the rural-based National Party, which governs in coalition with the larger Liberal Party. National Party lawmakers were worried the new media laws could undermine media diversity in country towns.

''I believe the amendments will enhance the package and assuage concerns that further deregulation of the media industry would lead to undue concentration and the loss of diversity,'' Coonan said in a statement.

The reforms, currently being debated in parliament, were designed to free up media ownership by scrapping foreign ownership limits and cross-media rules which ban a company from owning television, radio and newspapers in the same area.

Analysts have said the reforms, if passed, could lead to a spate of takeovers and mergers in the 9 billion dollar Australian media industry.

Under the changes announced on Tuesday, the government will impose a two out of three rule, ensuring no single owner can hold all three kinds of media companies in the same market, limiting mergers to two out of the three kinds of media.

The amendments also guarantee country radio stations will broadcast at least 4.5 hours of local programming each day, easing concerns from country lawmakers that the laws would lead to increased network programming from the major cities.

Prime Minister John Howard has said he wants media owners to broadly agree on the changes, but Australia's two biggest newspaper groups, Rupert Murdoch's News Corp. and John Fairfax Holdings Ltd, both oppose them.

The government wants the package passed by parliament by the end of the year, before a national election due late in 2007.

REUTERS LL BD1255