BBC's Peston questions Murdoch's rationale

BBC business editor Robert Peston has responded to James Murdoch's MacTaggart lecture, in which he criticised British media regulation and the overall size and scope of the BBC's activities, especially in the online news space, by questioning whether a wholly-liberalised news marketplace would result in a more well-informed population.

In the Richard Dunn Memorial Lecture, Peston said that on the basis that "misguided deregulation of banking" caused the current financial crisis, "we have to ask whether there is any rational basis for believing that withdrawing all regulation and subsidy from the news market would be any less costly to our way of life."

He characterised Murdoch's speech, which attacked together the BBC - on the basis of being funded by a "regressive" licence fee and "dumping" state-sponsored free news into a marketplace where News Corp wants to charge - and Ofcom, for stifling freedom of speech and over-regulating - as calling "for the dismantling of the BBC and the near total liberalisation of the media".

He sought to recast Murdoch's assertion that the BBC was a giant stifling commercial competition by suggesting, on the basis of revenue, that "there are a pair of giants" - the BBC and Sky - "and some minnows with loud voices, strong brands but depleted resources" - ITV, Channel 4 and Five. He said the situation "makes the large and protected revenue of the BBC and Sky's monopolistic control of satellite distribution much more contentious".

Peston said that every commercial news group would start charging for online access to news "very soon" and that the BBC's output "may look like unfair competition". He advanced a counter-argument on the basis that "having just lived through the greatest failure in history to distribute financial resources in an efficient and equitable way, we certainly shouldn't assume that a commercial digital market in news will distribute information in a way that would support a healthy democracy".