Murdoch: Ofcom scared of losing power

James Murdoch, the BSkyB chairman and News International boss, last night accused Ofcom of being part of an elite that seeks to unnecessarily regulate media because it is terrified of losing its power in a highly competitive digital future.

Murdoch, giving his first major speech since becoming chief executive of News Corporation in Europe and Asia in December, made the accusation after citing several lines from Ofcom's annual plan on the topic of convergence.

He quoted the media regulator as saying that "convergence, alongside more intense competition, can lead to complexity and varying degrees of confusion and anxiety" so there would be a role for Ofcom to "intervene decisively to protect people from actual or potential harm whenever this proves necessary".

Murdoch, delivering the annual Marketing Society lecture in London's Hilton hotel on Park Lane last night, said: "Let's be quite clear about this. The confusion and anxiety referred to is in the minds only of the elites who are terrified by people taking power from them. Nor is it the job of a regulator to invent sources of potential harm and forestall them."

He added that the "talk" of protecting consumers was just a "fig leaf". "What they are really saying is that competition and innovation may result in an outcome different from the carefully constructed central planner's fantasy about how a market might work," Murdoch said.

Customers are "sophisticated, demanding and understand the media", he added.

"People are not stupid, even if regulation obliges us to treat them as if they are," Murdoch said.

He cited an example of how rules on sponsorship and advertising in TV programmes, enforced by Ofcom and the European Union, had forced a channel broadcast by BSkyB to cancel transmission of a TV show in the UK.

Star Plus, a Hindi language entertainment channel, was banned from showing the Indian version of Are You Smarter than a 10-year-old? in the UK, he said.

This was because a logo of an Indian mobile phone company, which does not operate in the UK, appeared on the set of the show.

"I think we can probably cope with this - wholly imaginary - threat to our way of life," he said.

"But the heart of this is not petty rules about advertising. Those rules are simply a consequence of the establishment's much deeper discontent with a free media".

Murdoch had an often fractious relationship with the UK media regulator in his previous job as chief executive of BSkyB.

In his new role Murdoch oversees News Corp businesses including Sun and Sunday Times publisher News International, as well as remaining chairman of BSkyB, in which his father Rupert's company is the largest shareholder.

Murdoch's comments about Ofcom last night echo his father's 1989 Edinburgh International Television Festival MacTaggart lecture, in which the News Corp chairman and chief executive railed against the "narrow elite" that controlled British broadcasting.