Communications Minister Malcolm Turnbull is pushing media sector reform.
Communications Minister Malcolm Turnbull is pushing ahead with media sector reform that could trigger mergers and acquisitions among the major players but aims to retain diversity in key markets.
A reform package is likely to include the abolition of the reach rule, which prevents metropolitan free-to-air networks merging with their regional affiliates, and the two-out-of-three rule, which stops anyone owning more than two of a newspaper, commercial TV licence or radio licence in a major market.
It is understood that the ''voices'' diversity test is likely to remain intact in any reform. This means there must be at least five commercial media groups across radio, television and print in mainland capital cities and four in regional markets.
It has been widely speculated that News Corp or its half-owned pay television service Foxtel wants to buy struggling free-to-air broadcaster Ten Network Holdings.
This would likely require the two-out-of-three rule to be scrapped given News owns newspapers around the country and its co-chairman, Lachlan Murdoch, owns radio network Nova Entertainment. News has consistently denied any interest in Ten.
Other potential deals include a tie-up between metro free-to-air broadcaster Nine Entertainment Co and regional network Southern Cross Media Group, which would require the abolition of the reach rule. As reported in Fairfax Media, the two parties have held informal discussions, while Macquarie Group published a research note on Wednesday saying a deal would be positive for Nine and Southern Cross.
The Communications Department will meet industry players over the next four to six weeks to determine a package to be potentially put to Parliament. The government does not have a set timetable for a reform package. Part of the consultation period will likely involve written submissions from media companies, as well as face-to-face meetings.
While News Corp, owner of The Australian, The Daily Telegraph and the Herald Sun, has been less vocal on reform compared with some of its rivals, Prime Minister Tony Abbott and Mr Turnbull were at The Australian's 50th anniversary event on Tuesday.
Mr Abbott also shared a dinner with News controller Rupert Murdoch in New York last month.
Competition watchdog the Australian Competition and Consumer Commission has the power to assess potential transactions.
Regional TV networks such as Southern Cross, WIN Corporation and Prime Media, are thought to have been lobbying regional members of Parliament about the reach rule. Mr Turnbull said in March he was ''very sympathetic'' to removing barriers to a wave of mergers as the internet increased diversity and competition in the media industry. This was met with concern from National, regional Liberal and Labor MPs about the possible effects of consolidation on regional news services.
The regional networks believe a key part of selling the abolition of the reach rule is education.
They are adamant the reform would not hit local content because regional television broadcasters in the eastern states of Australia and Tasmania are required to show ''material of local significance'' as a condition of their broadcast licence.