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Why is so angry? - Background Briefing - ABC Radio N... http://www.abc.net.au/radionational/programs/backgroundbriefing/why-...

WHY IS JAMES MURDOCH SO ANGRY? Download audioshow transcript Broadcast:Sunday 31 October 2010 9:00AM The stars have not been in alignment for the Murdoch empire: a scandal threatens its influence in British politics, people won't pay for online content, the pirates have the best digital maps, and the British Library wants to give information away for free. Reporter Stan Correy

Image: James Murdoch arriving for work in east , November 23, 2011. (AFP: Warren Allott) View comments (18) FacebookTwi tter DeliciousRedditDiggEmail what are these? Transcript Hide Centurion: Caesar!!! Caesar: Who will fight with me? Who will fight with me? Will you fight for me? MUSIC Stan Correy: They're some lines from the film Battle of Alesia, where Julius Caesar is savaging the Gauls in a fight over what is now called France. Interestingly, early this year invested over $30-million into his Project Alesia, to get control of a different kind of territory: Cyberspace. But unlike Caesar, Murdoch didn't win his Battle of Alesia. This week, Project Alesia was quietly shelved, but neither Rupert nor his son James have given up. They're still fighting on many fronts - business, politics and legal. And James in particular is angry. Very angry. Centurion: Yar! ! Stan Correy: Hello, I'm Stan Correy and this is Background Briefing on ABC Radio National. One of the problems for is that there are perhaps too many battles right now. One is about to begin in the British Parliament, there are several court cases, and the unpleasantness around the now infamous phone hacking scandals in the UK doesn't seem to be going away. And it's one reason Rupert Murdoch may not get his way and complete ownership of the digital giant BSkyB of which he already owns 40%. Man: SkyHD, see your HD-ready TV come to life. Sky, leave them better. Stan Correy: But back to that later. First, that phone hacking scandal. It erupted in 2005 when it was revealed a News Corp owned newspaper had been hacking into the phones of Princes William and Harry, and one of Rupert's rival newspapers has been following the story closely. : A great many people in public life in Britain are very worried about the influence of Rupert Murdoch. People are worried about Murdoch's influence over more specific things to do with media regulation. We've just been told that the BBC licence fee won't be raised along with inflation, and people fear that that's Murdoch's influence, that he is trying to weaken the BBC so that

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his own television outfit, Sky, can have a larger market share. And there are numerous examples, so people are very worried about Murdoch's influence. Stan Correy: In July last year, Guardian journalist Nick Davies exposed new evidence of more widespread hacking. Complicating the concerns about Murdoch's political influence is the allegation of how the phone hacking case was investigated. Nick Davies: It does appear that Members of Parliament who were trying to look at it felt that it wasn't in their interests to take on this powerful newspaper because they might find their private lives being exposed in an embarrassing way. Stan Correy: Investigative reporter with The Guardian newspaper in London, Nick Davies. There are many allegations like this, about the police, the politicians and the newspaper executives and journalists. Several deny it, but two major newspapers, The Guardian in England, and , have continued to report it supported by revelations of new evidence. Both The Guardian and The New York Times are fierce competitors of News Corp. We will go into the phone hacking issues in more detail later. In the first instance, a journalist and a private investigator went to jail, but there was more to come. Murdoch's wasn't the only newspaper on Fleet Street involved in phone hacking. But it's deeply ironic that newspapers were at the same time railing against the way the new technologies made it simple for people to 'steal' News Corp content. In the UK, phone hacking is about the theft of personal information, and in European privacy law, personal information is your intellectual property. Moderator: Welcome to the opening ceremony of the inaugural Abu Dhabi Media Summit. APPLAUSE Stan Correy: In March this year, Rupert Murdoch and his son James attended the Media Summit at Abu Dhabi, and Rupert gave the keynote address. James was on a panel of media executives discussing current trends in the media industry. The buzz was all about the new digital devices, marketing and distributing ideas, entertainment and news. James Murdoch: We have a bunch of people in the audience I think who are going to ask some questions, I hope ... Stan Correy: But everyone was asking: How do we get people to pay for all of this? How do we stop them illegally downloading content. There was a question for James Murdoch from an Australian lawyer in the audience, who says it's all too late, that the digital genie is out of the bottle. Tom Levine: My name's Tom Levine; I'm a lawyer here in Abu Dhabi and I'm afraid this is a real lawyer's question. But it comes out of the emphasis on copyright that's been made by quite a lot of people; both Murdoch chairmen made the same point about the protection of content, and there's clearly a great deal of concern about theft of content. But one of the first things I learnt a Law School is that a law that is neither respected nor enforced is not a law at all. And I wonder if there is a risk that that train has already left the station. Because young people don't care that it's illegal to store content. What is it that the media industry can do to increase the respect for not illegally downloading content, because I think that without law the law will be ineffective. Stan Correy: Tom Levine's point was there's no stopping the new world of digital media. Kids and content-makers are living in a new world where content bounces around like squash balls, and ownership is virtually impossible to control. But James Murdoch has no sympathy for this new world, or young people who don't care about illegal downloads. Punish them, he says. James Murdoch: You need governments to play ball. These are property rights. These are basic property rights. There is no difference from going into a store and stealing a packet of pringles or a handbag, and stealing something online. Right? And the idea that there is this new consumer class that somehow are thieves, but we call them consumers, and we say we have to be customer friendly when they're stealing stuff, is lunacy. Right? This is the basic condition for investment and economic growth, is some level of sanctity around property rights, whether it's my house or a movie I've made. OK? And there's no difference that I think it's crazy frankly, people say, Oh, it's different, these kids, you know, these crazy kids.' No, punish them. Stan Correy: James Murdoch at the Abu Dhabi Media Summit in March. News Corp doesn't only talk the talk when it comes to punishing digital piracy, it gets involved in litigation. In the past month, along with other movie studios, News Corp is involved in two legal suits against small online television companies claiming they're illegally streaming News Corp film and television product. And in the online news world, the News Corp company, Dow Jones, is suing a service called Briefing.com Following this action is digital copyright expert from the ANU, Matthew Rimmer. Matthew Rimmer: It's too simplistic for Murdoch to say that News Corporation is merely the innocent victim of piracy by others. News and Murdoch open themselves up to the rejoinder that they themselves have infringed the copyright of others. Stan Correy: Rimmer makes the point that all media copy all the time from other media; it's the nature of the Medusa-headed beast. On the Background Briefing website, we've put up the court documents for Dow Jones and for Briefing.com. So if you're interested

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in the finer points of digital copyright law, both documents are worth reading. But here's Matthew Rimmer with a basic summary. Matthew Rimmer: In the current battle between Dow Jones and Briefing.com, Dow Jones has alleged that Briefing.com has infringed its copyright; Briefing.com's rejoinder, amongst other things, is that Dow Jones itself has borrowed a wide range of information, financial and otherwise from Briefing.com, and suggested that this was a case of throwing stones in glass houses, in that Murdoch and News had unclean hands, as it were. So one of their arguments is that they shouldn't be able to bring such an action because they themselves are dependent upon a wide range of other people's copyright material which they use without permission. Stan Correy: Matthew Rimmer, from the ANU College of Law. In the world of digital content, the battles over copyright are the most vicious and convoluted in legal argument. The technology is changing so rapidly, that the only recourse for media executives like James Murdoch is to take the crime and punishment approach. But it's been done before and failed, says copyright historian, Adrian Johns. Adrian Johns: If he really wants to prosecute say every act of digital piracy, which is pretty much what he seems to be saying, the only way you could do that, barring some completely unforeseeable technology or legal development, is by adopting technologies and social practices that would be quite intrusive into things like the private property of the house, ironically enough. This is something that has been tried before, going back hundreds of years, the publishing industry in the 18th century in England tried to eradicate book piracy by sending around agents into the homes of booksellers across the country. And it got an incandescent reaction, and basically destroyed permanent literary property. I mean the backlash was so severe that it took down the basic principles on which the London publishers had operated. Stan Correy: And it didn't end there. Adrian Johns: In the early 20th century, the music industry tried to hire what it called commandos, to go around to shut down pirates of sheet music. And again, the reaction to people breaking down doors and going into houses was so vitriolic that at one point the music industry actually stopped publishing. What he is doing is setting up the potential for a battle between two kinds of prized political virtue., On the one hand, sure, the protection of creativity and authorship and the need for accurate news and things like that; but on the other hand the value that's placed on freedom of speech, privacy in the household, the rights of citizenship and so on. Stan Correy: Adrian Johns, Professor of History at the University of Chicago. He says Murdoch is adopting high risk strategies in trying to use punishment as his tool to control digital pirates. But Murdoch has always taken high risks and sometimes he has won, though recently less so, and James, for one, is very angry. ALESIA MUSIC AND BATTLE SOUNDS Stan Correy: On Wednesday 21st April this year, two weeks before the British General Election, James Murdoch saw this headline in a promotional banner for newspaper. Reader: RUPERT MURDOCH WON'T DECIDE THIS ELECTION. YOU WILL. Stan Correy: Later that morning, there was an amazing incident, so astonishing it was reported in several London newspapers the next day. James Murdoch, acting like one of the Roman Generals fighting off the attacking Gauls at Alesia, stormed into the offices of The Independent. With him, was the CEO of News International, . James demanded to see the Editor of The Independent, Simon Kelner. There are different versions of what he yelled out, but they all contain various forms of four-letter words. Reader: What are you ******* playing at? Stan Correy: and the latest issue of Vanity Fair magazine has all the details. Here's a slightly edited reading from the magazine. Reader: Kelner led them into an office and he says, 'I think what really annoyed (Murdoch) was my air of bemusement, because I really didn't understand why they were so angry about it.' Kelner remembers James saying, 'You're a ******* ******. You've impugned our family name. To which Kelner adds, 'For those of us who are not part of the Murdoch organisation, that's rather amusing.' After a lengthy rant, Brooks and Murdoch stormed off. Kelner later heard from a high-ranking News Corp executive that it was 'a social visit that went wrong.' Stan Correy: Reports are that Rupert Murdoch wasn't too happy about what James had done, or the ensuing bad publicity. It happened at a particularly sensitive time. News Corp was preparing to bid to buy all of BSkyB. They already own 40% and it's Murdoch's most profitable investment. It's a money-making machine, and they want total control, but that needs political approval. When James stormed into The Independent's offices, the Conservative Party, the party that was their best chance of getting approval, hadn't yet won the election. News Corp and the Murdochs had hoped that a thumping Conservative victory in the May General Election would smooth the way for its 100% takeover of BSkyB. What happened instead was a messy Conservative/Lib Democrat coalition. And then to make matters even more messy, the phone hacking scandal returned to haunt the Murdochs, and the Conservative Party. Just a month or so ago, there was a House of

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Commons debate on setting up a new inquiry, this time on how the phones of English politicians were hacked. Here's an edited extract from an impassioned speech at the time, by Labour Member of Parliament, Tom Watson. Tom Watson: They, the barons of the media, with their red-topped assassins, are the biggest beasts in the modern jungle. They have no predators; they are untouchable. They laugh at the law; they sneer at Parliament. They have the power to hurt us, and they do. Prime Ministers quail before them, and that is how they like it. That, indeed, has become how they insist upon it, and we are powerless in the face of them. And we are afraid. And if we oppose this resolution, it is our shame. And if we reject this resolution, we will be guilty of letting it happen. We can make a start by getting to the bottom of the phone hacking scandal. Stan Correy: Tom Watson has been a constant critic of Murdoch publications and has been involved in litigation with News Corp. As have several other parliamentarians who found out that their phones were hacked by private investigators who worked for News of the World. Some of the politicians are former Labour Deputy Prime Minister, , MPs and George Galloway. The British Parliament will soon hold that inquiry into the specific issue of phone hacking of British Members of Parliament. Professor of at City University in London is . In his career as a journalist and editor, he's worked on two Murdoch-owned newspapers, and . Greenslade says there's a paradox at the heart of the Murdoch empire: they live by exposing private information, got by all sorts of subterfuge, but don't like it when others get hold of what they see as their corporately owned information. Roy Greenslade: It's very amusing, I think, that when one calls the switchboard at News International, its newspaper offices, a recorded voice tells you that you should not ask for the personal direct lines or email addresses of any member of staff, because that is in opposition to what's called the Data Protection Act, and yet at the same time, its newspapers located at that same place, spend time trying to obtain material which quite clearly in obtaining it, is in breach of the Data Protection Act. So you have a powerful organisation which wishes to seal itself off from inquiry, but at the same time believes it has the right to inquire into the private lives of other people. And that is, I think, one of the major reasons for criticism of the Murdoch organisation, that it says one thing, and does another. Stan Correy: Until this year, Rupert Murdoch had little or no comment about the phone hacking scandal and its impact on News Corp. But now it's different. In September one of his biggest media competitors in the US market, The New York Times, broke a major investigative report on the phone hacking scandal. And these new revelations have led to still more parliamentary inquiries. One of the things The New York Times report released was a recording made by a private investigator, Glen Mulcaire. Mulcaire and Royal correspondent, went to jail for hacking the voicemail messages of Princes William and Harry. In this recording, Mulcaire isn't talking to a Murdoch journalist, but it is important to hear. It shows how the phone hacking was carried out. In this case it was the voicemail of Gordon Taylor, an English football administrator. Ryall: Hello? Glen Mulcaire: Good afternoon, is that Ryall? Ryall: Yes. Glen Mulcaire: Hello, it's Glen. Ryall: Glen, how are you? Glen Mulcaire: Hello mate. Just a very quick one. Voicemail reset on Gordon Taylor. And it's got a Tottenham-related issues on there. Ryall: Great stuff, is it the same number? Glen Mulcaire: Same number. Do not delete anything. You've got the number haven't you? Ryall: Can you just give what you just put your own phone number in again. Glen Mulcaire: Correct, yes. Ryall: And what's the main number again? Glen Mulcaire: Yes, you need to dial 0797 - Ryall: 07973. Glen Mulcaire: 100. Ryall: So, 100. Glen Mulcaire: 123. Ryall: 100 123. Glen Mulcaire: Correct. You put his number in, it asks for the PIN, then put his number back in, and there's three messages on there from Tottenham, right? Ryall: Fantastic. Glen Mulcaire: Cheers. Just give me a text to make sure it works, yes? Ryall: Yeah will do. Stan Correy: The New York Times report alleged the trade in personal confidential information on Fleet Street was booming, and had new evidence from former News of the World reporters admitting it. And while other newspapers were also dabbling in these

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dark arts, the top performers were the newspapers owned by News Corporation. News of the World has denied that the problem is widespread and that The New York Times had any new evidence. Gordon Taylor, the football administrator who had his number hacked, as you heard, was eventually given a payout by News International of 700,000 pounds authorised by James Murdoch. On Background Briefing's website you can read the News International statement on the payout. As part of the deal, Gordon Taylor signed a confidentiality agreement. Last year The Guardian published email correspondence that revealed that it wasn't just the Royal princes there were being hacked. Journalist Nick Davies had obtained under Freedom of Information a list of people that the police had warned that their messages were being intercepted. There's a link to the list on our website. It includes all sorts of people, journalists, politicians of all parties, assorted British celebrities and even Australian model, Elle McPherson. The most recent speculation is that the number of people whose phones were hacked was in the thousands. There is a strange and wondrous parallel story to all this. When it became known that News of the World had hacked into the phones of the Royal princes, the editor at the time, , denied knowing anything about it. He resigned shortly afterwards. Here's a reading of key extracts from his testimony to a 2009 parliamentary committee investigating the issue. Reader: I never condoned the use of phone-hacking and nor do I have any recollection of incidences where phone-hacking took place. What we had with the Clive Goodman case was a reporter who deceived the Managing Editor's office, and in turn deceived me. I have thought long and hard about this (I did when I left). What could I have done to have stopped this from happening? But if a rogue reporter decides to behave in that fashion I am not sure that there is an awful lot more I could have done. Stan Correy: Andy Coulson is now the Director of Communications to the Prime Minister, . Guardian journalist, Nic k Davies. Nick Davies: There was a six year period when Andy Coulson was first the Deputy Editor of the paper, and then the Editor. If you talk to people who were working for the paper at that time, they all say the same thing, which was there was masses of illegal activity going on, either committed directly by the journalists themselves, or by private investigators; there was more than one, who they were hiring to do it for them. And all these people say it is inconceivable that senior Editors did not know that this was happening. It was happening overtly, openly, in the office. It was providing the raw material for the stories which those editors had to check. Stan Correy: While this is Nick Davies' view, at this stage there is still no solid evidence linking Coulson to the phone hacking. Coulson has been consistent in his denials. He said he had no idea that this particular journalist was using phone hacking. Andy Coulson did appear before a parliamentary inquiry into the hacking. Here's a section of cross-examination of Coulson by Member of Parliament, Adam Price. Price begins by asking about a News of the World story about a phone message left by Prince William on Prince Harry's phone. It was about a girl called Chelsy that Harry had met at a club. Adam Price: There we are, Chelsy tears a strip of Harry. It's a story which is essentially based around a phone message left by Prince William. Are you saying that as an editor of a national newspaper with an inset on the front, you wouldn't have checked the providence of that story? Andy Coulson: Not necessarily, no. I don't remember the story. I don't remember the story at all. Adam Price: I mean, isn't that astonishing, it's highly up the paper and you're telling me as an Editor that you don't even remember the story? Andy Coulson: Mr Price, I'm sorry, but I can only tell you what I remember, and I don't remember this story at all. Stan Correy: Andy Coulson, who was Editor of the News of the World at the time it was revealed that the voicemail messages of the Royal princes were hacked by a journalist working for the News of the World. The 2009 inquiry had wanted to call in the CEO of News International in the UK, Rebekah Brooks, but as other News International executives had already appeared, she declined. In their report the committee stated: Reader: We also asked Rebekah Brooks, News International's new Chief Executive to appear, to resolve inconsistencies in its evidence. She also declined. Stan Correy: Last month on the television program, Despatches, MP Adam Price had a different story about Rebekah Brooks' non-appearance at the committee. Price claimed that a Conservative MP on the committee had told him there had been pressure on politicians not to delve too far into the story. And that meant don't force Rebekah Brooks to testify. Adam Price: What I was told at the time by a senior Conservative member of the committee who I know was in direct contact with executives of News International, that if we went for her, called her back, subpoenaed her, that they would go for us, which meant effectively that they would delve into our personal lives in order to punish them. And I think that that's part of the reason we didn't do it, and in retrospect I think that's regrettable. Stan Correy: Adam Price at the time of the inquiry was a Welsh Nationalist Member of Parliament. He retired from parliament at the

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last elections in May. On the Channel 4 Despatches program, the conservative MP, responded in this way to Adam Price's claim. John Whittingdale: We were having general discussions, not just between myself and Adam Price, but myself with every member of the committee about whether or not we really wanted to do this, and obviously if you are dealing with very powerful newspaper groups, you needed to bear in mind that they are powerful, but certainly I think News International would not be so foolish as to make any threat of that kind. Stan Correy: On the Background Briefing website, there's a link to the committee report which was published earlier this year. Here's a reading of one of the committee's conclusions about phone hacking. Reader: In seeking to discover precisely who knew what among the staff of News of the World, we have questioned a number of present and former executives of News International. Throughout we have repeatedly encountered an unwillingness to provide the detailed information that we sought, claims of ignorance or lack of recall, and deliberate obfuscation. We strongly condemn this behaviour which reinforces the widely held impression that the press generally regard themselves as unaccountable and that News International in particular has sought to conceal the truth about what really occurred. Stan Correy: And there are more parliamentary inquiries to come, and court cases against News of the World by people whose phones were hacked. Those cases will be claiming a breach of personal privacy, theft of personal information. From The Guardian, Nick Davies. Nick Davies: This is an extraordinary story, it just keeps opening up. More and more information about the scandal at the centre and more and more implications. So it's actually become a story about the power elite and how it operates, and you would think actually, that no journalist with any kind of lust for a good tale, would walk away from it. But in fact what we've seen is the opposite. The Murdoch newspapers for months and months and months, wouldn't touch it, because they weren't going to say anything nasty about their sister paper, News of the World. Other newspaper groups wouldn't touch it because the supported the Conservative party and this man, the former editor, Andy Coulson, is central to their activities. And other newspapers wouldn't touch it because they themselves had a history of comparable illegal activity in their news rooms. So it's really rather odd the way in which the story has been suppressed by most Fleet Street, and for a long, long time it was just The Guardian and more recently The New York Times who were prepared to run it. Stan Correy: Nick Davies. The phone hacking issue has re-emerged as a politically sensitive issue for both the Conservative Party and for News Corp. The Conservatives don't want to antagonise the Murdochs, and the Murdochs can't be seen to be putting too much pressure on politicians to do what they want. According to Professor Roy Greenslade the story could have faded into obscurity as simply another example of the dark arts of tabloid journalism. Roy Greenslade: What we have is a suspicion, a set of suspicions, based on the balance of probabilities which amount to this single question: Could the editor of News of the World, Andy Coulson, now working closely with David Cameron, the Prime Minister, could that man have edited News of the World without knowing what his staff were doing? And if he didn't know, is it a sign of incompetence that he wasn't aware of it? Stan Correy: As we've already heard, Andy Coulson has denied he knew anything about the phone hacking, but as editor, he took responsibility for what happened, and resigned. The story could have died there. Roy Greenslade: And the reason the story has suddenly taken off again, really has to do with the fact that Andy Coulson has become the Director of Communications at . I tend to think that if he had gone off into obscurity that the story wouldn't have gained credence once more, but he is now a public figure to an extent, and I think therefore people are making the running. The other aspect that is perfectly true, which is I think running in parallel, is criticism of the police for allegedly having failed to investigate the whole matter properly at the time when the News of the World's Royal Editor, Clive Goodman, and the private investigator used by the paper, both went to jail in 2007, and that is something which has alarmed MPs, who discovered that they were on lists held by these men, and that's given another reason to investigate. So there's a sort of a twin track here. There are people who find that they were on lists and the police didn't tell them they were on lists held by these men, and they're upset , so they're taking legal action. And then on the other side you have this political row over what the editor, Andy Coulson, knew and when did he know it. Stan Correy: Professor Roy Greenslade, who also writes a column on journalism for The Guardian. The story now haunts the Murdochs wherever they go. In New York a few weeks ago, Australian Stephen Mayne put a question to Rupert Murdoch at News Corp's Annual General Meeting. Stephen Mayne: What's your personal view of the phone bugging issue in the UK involving Andy Coulson and Clive Goodson, the former Royals reporter. There has been a lot of press about it. Rupert Murdoch: We have very, very strict rules. There was an incident more than five years ago. The person who had bought a bugged conversation was immediately fired and in fact he subsequently went to jail. There have been two parliamentary inquiries which have found no further evidence or any other thing at all. And if anything was to come to light, and we challenged people, the

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police have even challenged some of these allegations to give us evidence, and no-one has been able to. If any evidence comes to light, we will take immediate action like we took before. Stan Correy: Rupert Murdoch there is referring to the sacking of the journalist who was found to have hacked into the Royal princes phone lines, and the private detective who helped him. Stephen Mayne had another question. Stephen Mayne: Did you read the 5,000 word piece in The New York Times claiming that they had spoken to no less than 12 former editors and reporters for News of the World, confirming that the practice was widespread? Rupert Murdoch: No. Stephen Mayne: You haven't read that New York Times piece? Rupert Murdoch: No. Stephen Mayne: The actual committee said in its report there was 'deliberate obfuscation' by our executives, and they said 'there was collective amnesia' by the executives, and you've just demonstrated this again, and at this point I'd like to - Rupert Murdoch: I'm sorry. Journalists who have been fired, or unhappy, or are now working for other organisations, I don't take them as authority, and least of all I don't take The New York Times as authority, which is the most motivated of all in this. Stan Correy: The drama over News of the World phone hacking has come at a bad time for News Corp, as it attempts to finalise one of its most significant deals: the complete ownership of its most profitable business, BSkyB. BSkyB is more than the leading supplier of Pay-tv services in the UK; it also supplies residential telecommunications and news bulletins for most commercial radio stations in Britain. At present, News Corp controls just under 40%. BSkyB Ad: Feel the power. Feel the magic. Feel the danger. Feel the colour. SkyHD. Feel your HD-ready TV come to life. Sky. Believe in better. Stan Correy: 'Better' means offering more premium sport, news, movies, games and online betting. If Murdoch does get total ownership it will confirm News Corp's position as the world's most powerful private media corporation. Media analyst, Claire Enders. Claire Enders: Sky is much more of a US-type phenomenon in the sense of it has t least six different products, all six of those products have well over a million customers each, and some products have six, seven million, others have more. So it's much more complex than saying it's a pay business. I mean it belittles it, if I may put it that way, to put it in that term. The company basically owns the consumer home experience in almost 10 million homes in the UK. Stan Correy: The UK has rather strict laws about media diversity and Claire Enders wrote the British government saying that the law required them to look into it. In the next two weeks, the UK Business Minister, Vince Cable, has to decide if the News Corp takeover needs to be investigated under British law. He could decide it doesn't need to be investigated, but that would doubtless raise a few eyebrows now. The law states that if a takeover threatens media diversity or plurality, the deal needs to be looked at. And all this with the phone hacking issue bubbling in the background, and there's no doubt the politics of the phone hacking story is now affecting News Corp's business strategy and will make it almost impossible for the government not to inquire into the Murdoch takeover. Claire Enders. Claire Enders: There has been a subtle change and I suspect that had it not been for the confluence of events around the re-emergence of the phone tapping story and the decision by various bodies, the police, parliament and so on, to re-examine these issues, I think that suddenly people connected about what the activities of this organisation might be like, and what greater power might involve. And I have to say I have noticed a significant shift which may be really the politicians waking up to the fact that it is actually harder to explain why they won't apply the law to Rupert Murdoch than it is just to pass the buck to to do a plurality review. Stan Correy: Ofcom is the British communications regulator. Its job would be to do what the British call a plurality review. In other words, does the takeover give News Corp too much power in the British media market? Claire Enders: We are moving towards a situation where the Secretary of State is more than likely to say 'Well we should look t the plurality aspects of this deal because it's so hard to explain why it is that Rupert Murdoch should be above the law.' That is really at the heart of the issue, is News Corp above the law in the UK? Stan Correy: Claire Enders, CEO of Enders Analysis, an independent media and telecommunications research firm. And just two weeks ago, several newspaper publishers and the BBC signed a letter stating that the British government should prevent News Corp taking full control of its English Pay-TV broadcasting network, BSkyB. You can read the letter on Background Briefing's website. But here's an extract from it. Reader: As representatives of a broad cross-section of the UK's communication and media industries, we believe the proposed takeover could have serious and far-reaching consequences for media plurality. Stan Correy: One of the signatories to that letter was Mark Thompson, the Director-General of the BBC, and public enemy No.1 for the Murdochs, Rupert and James. The letter unleashed a war between News Corp media outlets and everybody else. Here's an edited extract from an editorial in mid-October from of London, owned by the Murdochs.

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Reader: The BBC has shown the force of the political pressure - party politics, media politics, BBC politics - that will bear upon Vince Cable, the Business Secretary, as he makes his judgment on News Corp's offer. The Times does not pretend to be able to judge this matter objectively, it simply expects that Dr Cable will do so, guided by the law rather than pressure group politics. Stan Correy: And then more recently Rupert Murdoch made it clear that this deal was important to him and no-one should stand in his way when he gave a speech in London, honouring former Tory Prime Minister, Margaret Thatcher. Rupert Murdoch: We must celebrate a culture of success. The rise to prominence is too often accompanied by a surge in cynicism by the traditional elites. I am something of a parvenu, but we should welcome the iconoclastic and the unconventional. And we shouldn't curb their enthusiasm or energy. That is what competition is all about. Yet when the upstart is too successful, somehow the old interests surface, and restrictions on growth are proposed or imposed. That's an issue for my company. More important, it's an issue for our broader society. These are the small thinkers who believe their job is to cut the cake up rather than make it bigger. Stan Correy: Rupert Murdoch and his heir apparent, James, desperately need to get the whole cake. Media analyst, Claire Enders. Claire Enders: The takeover of BSkyB which is one of the largest subscription businesses in the world with revenues of close to$6-billion is a very material and important part of the future of News Corp. Stan Correy: News Corp's American businesses simply don't compare to BSkyB. In the United States, advertising drives profits and with a depressed US economy, the money isn't there. The movie business is very profitable for News Corp, but you need a blockbuster every year. Claire Enders: The company has a very significant studio business which has had terrific success with Avatar and which will no doubt continue to have great success when Avatar 2 and 3 come out, and other things as well happen that are positive. But in the case of the whole of News Corp, what's clear is that buying 100% or owning 100% of BSkyB is going to be the bedrock, the foundation in terms of cash flow and in terms of business solidity. Stan Correy: Claire Enders. In 2009, the focus of James Murdoch's anger was the BBC. In 2010, it's a much wider group of enemies. And after the British election he gave a major speech about News Corp's strategy in the digital world. At the UCL Centre for Digital Humanities before an audience that included his father, Rupert, James asked who would fight with him, as he wielded his sword against the hordes of digital pirates, who he claimed are strangling the creativity and profits of News Corp. James Murdoch: As many people put it, we have a new paradigm: we all own everything, so no-one owns anything. The internet, and everything on it, it is said, wants to be free. Second, digital networks are depicted as forces of nature. The idea that anyone might try to shape the future, to influence events, to innovate with an outcome, is seen as foolish, or indeed out of touch. You can see why the vision appeals. It feels radical and it feels new. It makes sense of some of the things that we see around us, and a lot of digital change is genuinely exciting and fun. Anyone who has watched the 2-minute and 18-second retelling of the entire Star Wars trilogy, in Lego, will know what I'm talking about. But there are some immediate concerns. We can't just assume that greater connectivity is a force for good in and of itself. Stan Correy: James Murdoch, speaking at the Centre for Digital Humanities at the University College, London. You can read and hear the full speech on Background Briefing's website. In the speech, James Murdoch once again attacked those institutions that give away information for free. It wasn't the BBC this time, it was the British Library, and James Murdoch was angry at a new venture by the British Library to digitise old newspapers. James Murdoch: Take the current controversy over the Library's intention to provide unrestricted access to its digital material. Material that publishers originally produced, and continue to make available, for commercial reasons. Like the search business, but motivated by different concerns, the public sector interest is to distribute content for near zero cost, harming the market in so doing, and then justifying increased subsidies to make up for the damage it has inflicted. Stan Correy: James Murdoch was claiming that the British Library was stepping into the world of for-profit publishing. James Murdoch: The case of the British Library goes even further. Just yesterday, helpfully, the Library announced the digitisation of their newspaper archive, originally given to them by publishers as a matter of legal obligation. This is not simply being done for posterity, nor to make free access for library users easier, but also for commercial gain via a paid-for website. The is strongly opposed by major publishers. And if it goes ahead, free content would not only be justification for more funding, but actually become a source of funds for the public body. Stan Correy: James Murdoch speaking at the University College, London, in May. Roy Greenslade is Professor of Journalism at City University in London. Roy Greenslade: It think he was entirely wrong about the British Library. I understood the logic of his argument, of course, but it's wrong really to say that in a world where we believe knowledge is power, that we restrict the amount of knowledge that people can have, and stick it behind paywalls or make people pay for copyright, especially things that are fairly old. That I think is wrong- headed, and I think his attack on the British Library which completely baffled I have to say, not only journalists but academics at the same time because we've never faced that kind of an assault on freedom before.

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Stan Correy: Yes, and in a way it was strange I thought, because he was using it as an example in a wider attack about digital piracy, which is his big thing, whether it's thieving, stealing movies or illegal downloads of movies, or copying material from the internet, the British Library issue became the centrepiece, and people perhaps forgot about the other issues which are probably more valid in some ways. Roy Greenslade: Well there is a logic to all that James Murdoch and Rupert Murdoch in recent years have said, that is that there is a price to be paid for gathering material, for writing material and therefore having paid that price to do it, other people who wish to access it should pay as well. And I think the assault on the British Library took it to the logic to what you might call an illogical conclusion. That is, that all information, historic information as well as up-to-date information, topical information, all of it must be paid for. And I think that most of us who believe that it is important to maximise the number of people who have information, who have knowledge, that is the wrong approach. Stan Correy: But the Murdochs aren't about to give up. 'Project Alesia', their $30-million attempt to find ways for online newspapers and content to earn money, has been quietly dropped. The pay walls they set up mid-year for The Times of London are leaking badly. Advertising revenue is down and according to Nielsen audience research, online traffic is down 43% since they started charging in July. News Corp is now waiting to hear if the British government will allow them to own all of BSkyB. And the phone hacking story is still bubbling away, waiting for the next set of inquiries and court actions. There are enemies all about, and the battles aren't over yet. Roy Greenslade. Roy Greenslade: This kind of antagonism, clearly rattled Rupert and James. I can understand why. And so much of the public statements they made at the time, especially James' speech on the British Library and copyright, especially the business about storming into The Independent newspaper office, all of that is of a piece in the sense that there was extreme nervousness about whether they were getting it right, and upset at being on the end of so much criticism. This comes down in the end to the idea that Rupert Murdoch is the world's most powerful media mogul and as such, there are whole sets of conspiracy theories built up about him controlling too much and out of those conspiracies stem relentless, almost daily criticism of the Murdochs. And I guess that although Murdoch is 79 and rolls with the punches, a younger son was not prepared to do that. Stan Correy: Roy Greenslade. And here's Rupert Murdoch just over a week ago, rolling with the punches. Rupert Murdoch: A free society requires an independent press: turbulent, inquiring, bustling, and free. That's why our journalism is hard-driving and questioning of authority. And so are our journalists. Often, I have cause to celebrate editorial endeavour. Occasionally, I have had cause for regret. Let me be clear: We will vigorously pursue the truth, and we will not tolerate wrongdoing. Stan Correy: Background Briefing's Co-ordinating Producer is Linda McGinnis. Research by Anna Whitfeld. The technical operator is Jenny Parsonage, and the Executive Producer is Kirsten Garrett. Don't forget there are links to documents and speeches from this story on our website, and you can also put up your thoughts on the story at the comments link. I'm Stan Correy and you're listening to ABC Radio National. THEME Further Information Transcript of Rupert Murdoch's Abu Dhabi speech Rupert Murdoch's speech to the Abu Dhabi Media Summit Audio of James Murdoch launching the UCL Centre for Digital Humanities Stephen Mayne at the Newscorp AGM Written evidence from News Limited to the UK Parliamentary Culture, Media and Sport Committee The full phone hacking list James Murdoch on the 'Going for Growth' panel at the Abu Dhabi Media Summit UK House of Commons Culture, Media and Sport Committee - Second Report on Press standards, privacy and libel Dow Jones & Co., Inc. v. Briefing.com, Inc., The counterclaim from briefing.com Transcript of James Murdoch's UCL speech Rupert Murdoch's inaugural Margaret Thatcher Lecture for the Centre for Policy Studies Beehive City: Unbiased media and entertainment news News Corporation Claire Enders submission to Vince Cable regarding News Corp's proposed takeover of BSkyB Letter from various UK media to Vince Cable regarding the proposed takeover of BSkyB by News Corporation. Credits PresenterStan Correy

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CommentsProducerStan Correy (18) Add your comment stan : 31 Oct 2010 11:16:10am Number one rule of journalism ~ Never let the truth get in the way of a good story. Reply Alert moderator Media inquirer : 31 Oct 2010 11:17:17am Another excellent report from the BB team. What would be a useful follow-up, though, to today's program is an examination of the role of Murdoch in Australia. I note he called on PM Gillard in her office this week (while Abbott had to go to meet him), and who can forget ex-PM Rudd's pilgrimage to get Murdoch's blessing in New York in 2007? It's also worth remembering that while Murdoch's stable of papers hasn't yet hacked into phone accounts here (that we know about), his firm's dominance in Australia's print media is even greater than in the UK or US. It's high time our parliament held its own 'plurality review' into News (and the dwindling number of media players here). Perhaps the independents (as they are already the subject of regular attacks by the Murdoch media, and therefore, have nothing to lose) can propose such a probe. Meanwhile, let's see how long it takes Murdoch's 'media writers' to have a go at both today's program and further attack the ABC in general. My guess, we'll see some return fire by tomorrow in the national 'newspaper.' Don't let the bluster, though, put you off! Reply Alert moderator Joseph Andros : 31 Oct 2010 1:00:38pm The implications of Media influence reminded me of what a former U.S. president had to say: Abraham Lincoln in 1864: "I see in the near future a crisis approaching that unnerves me and causes me to tremble.Corporations have been enthroned and an era of corruption in high places will follow,and the money power of the country will endeavour to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands" And a literary insight by Theodore Dreiser: "The government has ceased to function,the corporations are the government". Reply Alert moderator rotha Elizabeth Jago : 31 Oct 2010 1:08:01pm Excellent program this morning. Murdock's resentment of the The British Library's activities in giving access to information is part of a campaign by major holders of knowledge to restrict and control the flow of STORED knowledge. At the turn of the 19th-20th century many people and publishers set out to inform a public which was newly literate and thirsty for knowledge from everywhere. There was a dedication to spreading knowledge both in UK and Germany, and many informative booklets were printed and distributed free or very cheaply. These publishers and printers persisted almost right through the 20th century, but almost all have gone. Blackwells was the last major database and publisher in UK, now bought up by a drug company and neutered.Viva the Libraries! can they withstand the tide? Reply Alert moderator George Barney : 31 Oct 2010 3:20:51pm Murdoch and Fox News wants freedom and Democracy? what a joke!!!!! You only have to look at what they doing in the US. Don't give this man the time of day. Reply Alert moderator JohnH : 31 Oct 2010 11:12:50pm So James Murdoch wants to punish kids who download copyright material. He says it's no different to shoplifting. Ha ha. (The super rich live on a different planet). The digital world of photography and video now has 'everyone' using a camera. The old values of photography is gone forever. Pictures are now things we exchange between friends. You Tube for video. The Murdoch's need to think of new schemes. Punishing kids won't win customers. Reply Alert moderator JohnH : 01 Nov 2010 3:29:27pm PS The National Broadband Network with super fast speed will enable a 90 minute 20the Century Fox movie to be watched instantly without the need to wait for a download. Could this be a reason why News Limited newspapers have been giving the government 'a hard time'? Reply Alert moderator Sylvia Clifford : 01 Nov 2010 5:38:19am Congratulations on a very important and comprehensive report. Here in the UK ordinary people are increasingly angry about the power of the media empires. As most of our politicians and high profile figures are afraid to speak out, it's down to us, the public, to wake up from our long sleep.

For this reason, two months ago, a group of us started DemocracyFail, a grassroots campaign to change the rules on media ownership in

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Britain.

We urge concerned members of the public the world over to link up with us and share information. Please follow us on or go to our blog at http://democracyfail.wordpress.com

Reply Alert moderator David Lewis : 03 Nov 2010 10:28:25am After seeing how Fox News operates I have come to the view that I don't care what Murdoch is worried about I would vote to close him and his empire down. Its astonishing to hear his appeals to principles: he doesn't have any himself.

I can imagine his media enterprises denying climate change and trying to intimidate politicians who want to do something about it to the point where the planet is killed. They may have already done it, given that lags in the planetary system mean that what we've already done has yet to have its full effect. Reply Alert moderator james roberts : 03 Nov 2010 5:22:37pm Stan Correy & team,Congratulations on a fine expose on the Murdoch creeps. They really are a threat to the democratic way of life. Rupert outdoes Citizen Kane in his outrageous scheming and nasty Jim appears to be even worse.B.B deserves a Walkley! Reply Alert moderator Merrill : 05 Nov 2010 2:26:39pm Terrific program. Could you do a follow-up on News Corps antics re. our Federal election and the recent midterm elections in the US? Reply Alert moderator South Light : 05 Nov 2010 3:19:08pm I was appalled when the ABC invited Murdoch to present the Boyer Lectures, amazed that a person with so much media access and control should get an extra forum on the ABC. I would have preferred Hugh Heffner because he has published more informative and analytical articles scattered amongst the porn than Murdoch has allowed into his media (while boosting his sales using " girls" but pretending to not be a pornographer). Thanks to the ABC sustaining remnants of investigative and analytical journalism we have learned of Murdoch's campaigns of disinformation in respect of New Orleans/Katrina, Bush & Iraq, the British soccer stadium stampede, etc, etc. Murdoch's Boyer lectures were the most boring of the series, lecturing listeners ("I know it all so you'd better listen to me" and indulging in self-promotion. He HAD to go on about how he and his wife are benefactors to a poor school. His generosity in proportion to his wealth makes him one of the meanest people on the planet - not to mention his impact on the thousands who starve or are shot because of his pursuit of wealth. Reply Alert moderator delwyn saunders : 06 Nov 2010 7:43:23am Excellent program, much more comprehensive than the 4 Corners one. No wonder the have the BBC in their sight in the UK. Competition is for everyone else. Democracy is not for them. It's not hard to see evidence of their outlook and influence here. It almost seems like the fundamental fervour of some religious adherents!

Reply Alert moderator Mathew : 07 Nov 2010 7:12:14pm So Murdoch says competition should not be a means help society, but an ends? Murdoch brings us Sky and Fox and then lies through his teeth, saying "That's why our journalism is hard-driving and questioning of authority".

What he says is completely self-serving. Here he expects recognition for his "success" which only means being on top and corroding journalistic standards. That kind of "success" leaves the heart empty. It has no value. Other things do. Reply Alert moderator Phoenix : 18 Nov 2010 6:02:37pm So all of the breast beating by Rupert and Son about the importance of them fearlessly providing the public with 'knowledge and truth' is all subject to them continuing to make an absolute 'Motza' out of them doing so.

God help us all...! Reply Alert moderator Kevin : 20 Jan 2011 5:51:44pm Such a great story...so detailed.

My favourite part when when James stormed the offices of The Independent. Now to hunt down that Vanity Fair article.

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Reply Alert moderator avc : 22 Jul 2011 1:40:43pm Beautifully presented, and so precient! Well done. Reply Alert moderator David Hancock : 29 Apr 2012 11:29:52am Wonderful piece thankyou again Background Briefing! Still the mainstay of decent journalism is this country! Reply Alert moderator

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