Thank you so much.

Well, yes. He didn't discuss anything with me because -- but he did smile at me, so that was nice. All I did was say, "Dr Cable, would you mind sitting down and listening to what I have to say, because I sent you a document and I have had ...

That's right. And it is a slightly quixotic cause, since no one agrees with me.

No, there was a group of clients and they're actually well-known because they opposed the merger, but this was the only work that they commissioned us to do. Looking further back in time, the work that we did which initially brought to Vince Cable's attention a number of ...

That's right.

No, I expected it to be rejected by Ofcom because it's very outwith the powers that Ofcom has and it's a completely new approach. But I have only advanced it not because of any certainty that it would be the right single answer to the question of plurality ...

Again, it is one measure. The only reason I put it forward so strongly is because it tends to be dismissed in favour of the softer sense of influence, the touchy-feely aspects of it and also the hearsay elements of influence and impact on politicians and so on. What I ...

I think that's absolutely right. It's just one proposal and there are other proposals. I mean, Ofcom is keen and it is important to measure news plurality the way that it wants to measure it. That is one measure. It's also important to have competition legislation. That ...

Indeed, or they could choose to divest themselves of other interests in the UK, or indeed the position could change over time and indeed, the newspaper circulation and revenues would decline over time and at some future point, there would be the right mix of things.

But again, it is ...

That's right.

Oh, figure 2.

I have page 7. This is figure 1, the size of the UK media market in 2010.

That would be something where, again, if you looked at it deeply, you would have to come to a view about what is (a) the right definition of the market, and (b), the number of players you want. It would not be our intention for organic growth -- foreseeable organic growth ...

Well, the purpose of our proposal is additive to proposals put forward by Ofcom and indeed other proposals under -- or indeed existing law, and other mechanisms of review of transactions in any case. We're not proposing that this would replace all existing media ownership legislation, but rather that it ...

No, well, I'm -- I didn't want to use the word "arbitrary" in that way but it is, in a certain way, arbitrary to take a decision that six players or seven players or this media market definition or that. There is a certain arbitrary -- there is going to ...

I am accepting that it's an arbitrary one, but I am also positing that it is very important to have a sense -- a multi-player -- active multi-player market and therefore you do have to have arbitrary limits to guarantee that.

Well -- but remember that my sense of plurality is perhaps a bit broader than that put forward by Ofcom anyway. I'm including in that a number of creative areas like music and books where a number of different enterprises is an important factor in terms of ensuring creativity and ...

Well, I mean, we were just trying to draw a media market, not actually a media market for plurality purposes. If one went down that route, one would obviously exclude -- for instance, the video games market would not seem to fit naturally within that, but we didn't -- we were ...

Well, we put as many items that seemed to fit in there and of course, we discussed this with a number of organisations and they felt that this was a sense of it, but of course, you can expand and contract this and it's really a question of relevance ...

Yes, it's just a proposal. The fact is, as we point out, there are definitional issues. Whether you include books and games is an interesting question and so on. So I don't want to attach any real significance to the figure of 15 per cent. Nor indeed -- I ...

I think so.

Well, actually -- but in this country people have a very well understood idea of competition and it's been applied for many years -- and again, I'm not a competition specialist but all I can point to you is that there has been a large scale series of mergers of ...

Yes.

It's the way things are.

Millions more people. I mean, the Guardian is another very good example of an extraordinarily successful digital operation. I believe that the revenues of its digital operation were around -- I'm talking about the newspaper; I'm not talking about the other stuff that they do, although they do other ...

That's right. It's one of the great truths of broadcasting companies and one of the reasons why they have such extraordinary longevity that once they're past the stage of covering their fixed costs, they can actually -- bar, obviously, economic cycles, they can actually increase their profitability, assuming ...

Yes.

I think that in economic terms that wouldn't be right. First of all, I don't think that definitionally they're all that difficult because Ofcom actually -- I mean, public service broadcasting licences require public service broadcasters to fulfil a number of commitments anyway and they are expressed in ...

Yes. Firstly, I think in the earlier part of my testimony I made the point as to how difficult it is to disintermediate what is news and entertainment anyway within the context of newspaper readership. So I think that again, the idea of news is such a broad concept already ...

And especially because -- I must tell you as I've been a media analyst for over 30 years. The fact is I've often found that politicians don't actually understand how people consume media. I've often found that a politician will tell me: "I don't like my ...

Yes. I think that's a good -- I think it's a harsh term, perhaps, and people may wish to see compacts between politicians and media owners in other terms or there may, in fact, be many different levels of compacts, but I think that the risk to society is ...

As I explain in here, the world is so made that there are only so many patrons and only so many news outlets and inevitably the further concentration one gets, the less diversity, you know, the less porousness of the system.

In the UK in particular, but in many other ...

That's right.

Which is related.

Indeed.

I think this is a very conventional view and also a theoretical one, in the sense that reading all the literature on these matters, whether produced by academics and so on, there is a sense -- a systematic sense that -- to Lord Leveson's point, it's that noisiness of the ...

Indeed, that is what happens when those mergers are not allowed. So it is a paradox of our situation in the UK that indeed, with a few behavioural remedies, the News Corp/BSkyB transaction was well on the way to full approval with Ofcom's blessing.

I'm not a specialist in this area, but it is a long-running leitmotif around issues of local markets and local advertisers, as well as local consumers. So recently there was a case involving the Kent Messenger Group in which a small local merger was turned down, and so in ...

I think it's also been constantly considered at regular intervals, anyway. Certainly in the 2003 concept, which I remember very well, there were a number of issues around the specificities of the UK which Lord Putnam and many other peers sought to frame. So they have always been conscious ...

Also they can also invest -- there's more leeway. But obviously we're not talking about a country in isolation; we're talking about the UK and the UK as it really is.

Yes, absolutely, and the megaphone across many different places, you know, in the City or in government and so on. Financial power is immensely significant in every way.

I'm just using the sort of economic theory around oligopolies, which is that -- ologopolies are more effective if there's more equal strength between the parties. In the UK, for instance, there is ITV, Channel 4 and Channel 5 that all sell advertising and indeed there is a plethora ...

That would be nice. Well, they come along regularly.

Well new patrons come into being because they make money in other places. You know, they make money through property in the case of the Barclay brothers or they make money in mining in the case of Ms Rinehart or indeed, in the case of Lebedevs, in other activities in ...

Or the willingness of its patrons, because after all, it is a patronage -- it is funded by patronage. I mean, the BBC is funded by public patronage and the Times is funded by News Corp and the Guardian is funded by the Scott Trust and so on. Patronage is quite ...

That's certainly true on the news side. There is a great difficulty in economic models for all news, whether it's in the newspapers or on TV or on radio.

Yes, absolutely. I mean, diversity. Diversity, differentiation and so on. Yes, definitely. As I go on to say in my submission, that is definitely how it is that different points of view can be expressed in a complex and interesting society.

That's right. And also I sometimes wonder whether the focus -- and I think it's something I point out in my submission -- I wonder if Ofcom's almost exclusive focus on news and plurality as calculated in this way is in fact what was originally embodied in the legislation ...

We don't make any suggestions about the combined approach or indeed -- you know, Ofcom's really very expert in these matters.

I must say, to our credit as an organisation, Ofcom decided to use the methodology that we had advanced in November 2010 in order to come to a ...

Mm-hm.