The Competition Authority has said that cross media ownership restrictions should be eased. If the Broadcasting Commission of Ireland (BCI) agrees, this would enable the takeover of Today FM and County Sound in Cork.

Scottish Radio Holdings (SRH), a 24 per cent shareholder in Today FM wants to buy out the remainder of the station for £47 million (€49.7 million). UTV has made clear it would buy out the 60 per cent of Cork based County Sound for about £12 million if media ownership rules change.

In a submission to the broadcasting licensing agency, previously known as the Independent Radio and Television Commission, the Competition Authority said "there is a concern that a too-rigorous application" of BCI rules on radio ownership "could have the unfortunate effect of stifling the flow of capital to broadcasters. We recommend that the (BCI) provide for specific waivers to any such restrictions, in circumstances where the public interest benefits resulting from cross ownership and the resultant capital flows outweigh the threat to diversity and localism."

The Competition Authority was responding to an invitation for submissions by the BCI on how it could achieve greater pluralism and diversity in the broadcasting sector.

In all, 33 submissions, which have been seen by The Irish Times, were received by the Commission. They are due to be made public next week ahead of an expected announcement by the agency in October on changes to its controls on ownership.

The move comes as the Broadcasting Act 2001 comes into force today, resulting in a name change for the Commission from the IRTC to the BCI.

The Act confers extra functions on the agency, enabling it to draw up and enforce new rules on programming and advertising, and licence additional television services on digital, cable, MMD and satellite systems.

UTV has indicated that if the BCI relaxes its rules to allow 100 per cent ownership of a radio licence by a private company it will purchase the remaining 40 per cent of County Sound. SRH, meanwhile, has agreed terms with the shareholders of Today FM for to buy the 76 per cent of the station it does not already own.

BCI rules state that no company can own more than 27 per cent of an independent radio station. This restriction was waived earlier this year, however, when the Commission agreed to UTV's purchase of 60 per cent of County Sound for about £17.1 million (€21.6 million). The Commission described the approval as an "exception" resulting from UTV's agreement to maintain a "local" identity on the board of the radio station.

In their submissions to the BCI, both UTV and SRH argue for a further liberalisation of controls. SRH said the current rules were "unduly restrictive and work against the interests of the listener, employee and the growth of a dynamic independent broadcasting sector".

It said it believed "for practical reasons" all cross media ownership matters be taken out of the hands of the BCI and left instead "to competition authorities acting in the wider public interest".

This would avoid the possibility of one public or governing body contradicting the decisions of another.

On local ownership, SRH said it had been proved elsewhere that this was not required in order to guarantee a local ethos. "Experience in other countries suggests that safeguarding the local character and ethos of local radio is often best achieved by larger groups having a number of stations with access to financial resources and support systems, resources unavailable to smaller locally owned companies." Echoing this view, UTV said "it is our belief that the market itself will paradoxically safeguard diversity, and that globalisation and the proliferation of networks will throw into even greater relief the need for a clear and unambiguous local identity ."

It said it opposed the use of ownership percentages but if this route was to be pursued it should be borne in mind that RT╔ Radio currently had a 49 per cent combined market share. The Competition Authority, in its submission, also makes reference to RT╔'s dominant market position, and warns that restricting consolidation of independent media "could lead to distortions in the marketplace." Should the IRTC consider it necessary to retain the rule limiting cross media ownership, "it should be applied with reasonable caution" and in circumstances where "a transparent and non-discriminatory waiver policy be put in place to allow market conditions be taken into account in the decision", said the authority.

Submissions were also made by the Department of Public Enterprise; The Irish Times; the Church of Ireland; cable companies like NTL and Chorus; radio stations including Lite FM, FM104 and 98FM; and independent media experts.