Don't be fooled by the chilled public silence that has greeted the latest consultation document on media ownership. The fact that Granada's results got more coverage merely indicates that the drama of emerging media ownership rules moves too slowly for journalists and the City. But this, the third consultation paper on this subject in four years, does repay inspection.

From a TV standpoint, one key point is firm. There will be no specific ownership rules at all in digital television, which already accounts for a third of the British market. Here, the government will rely upon the effects of competition law and a combination of investment in and regulation of public service broadcasters to deliver its goals of diverse and plural services.

Given the commitment to achieving total transfer to digital TV by 2010, this is the clearest possible indication of how ministers wish to see the future of television regulation.

Compared with this, confirmation that ITV companies will be allowed to merge, subject to competition policy considerations, is a minor matter. Since ITV still controls well over half of TV advertising, Carlton and Granada's shares will have to fall a good way before they will be allowed to merge, a process that could well take three or four years. ITV companies need to show that they can sort out their digital strategy, rather than that they can brief merger and acquisitions lawyers.

Meanwhile, ministers have raised the extra thought that in the twilight years of analogue television, they might like one other barrier to excessive concentration of ownership, namely separate ownership of Channel 5 and ITV. The case for this is that it would give the fledgling Five the chance to grow bigger wings by the time of the digital free-for-all. If it happens at all, this protection should only be temporary.

The biggest specific error in the consultation document is the stance taken against opening the UK market to participation by non-European interests. This makes no sense from either an investment or consumer point of view and contrasts with the line taken by Germany, Spain and the Netherlands.

Those who think that easing these rules would leave national markets unprotected against leviathans like Rupert Murdoch and John Malone are not reading the newspapers. Only this week, Malone's Liberty Media has found itself back in the clutches of the German Cartel Office.

On radio, ministers have more or less bought the provisional deal between the commercial radio operators and the Radio Authority. That would mean an end to specific ownership restrictions on national radio services and a requirement that in any local market, there should be at least three owners, in addition to the BBC.

Even this should not be mistaken for the crack of the starting gun on a merger scramble. The Radio Authority will not permit pre-emptive deals before the rules change. In addition, more work is needed on the sanctions against licence holders who depart from the terms of their licences. Here lies an important defence against the imperial stride of Muzak FM.

The most irritated respondents to the consultation document, however, will be in the newspaper industry, which has failed to convince ministers of the case for a serious lightening of restrictions on local newspaper mergers.

Instead, the document floats the idea of a new "freedom of expression test" where concentration of newspaper ownership is at issue. From a public policy point of view, this is worth discussing, but it will be seen in some quarters as another encroachment against press freedom by a government already smiling on the courts as they use the recent Human Rights Act to build case law on privacy.

Unsurprisingly, the least developed area of thinking concerns cross-media ownership, but even here, there are signs of advance. Existing ownership ceilings are, correctly, judged too low. But the idea that they should merely be raised and made more flexible where a deal can be said to satisfy some sort of "plurality test" would make for a regime too unpredictable and too vulnerable to lobbying.

Two alternatives are on offer: one based upon share of total media voice, a second upon interlocking restrictions on share within specific media. In the latter, the worked example suggests a company could have 40 per cent of one market or 30 per cent of two. This would allow Rupert Murdoch to stand still, but require him to sell a newspaper title if he wished to enter the analogue terrestrial television business.

My own view is that this formula, like its predecessors, will be rendered obsolete before the legislation is a year old by a rapidly changing market. Instead, officials should get to work seriously on measuring share of pan-media influence, so that a system can be put in place, perhaps initially on an advisory basis. Only practical experience will de-bug such a mechanism and allow confidence in it to grow.

In digital markets, this is the tool regulators at Ofcom and the competition authorities will need.

Ian Hargreaves is director, Centre for Journalism Studies, Cardiff University

Hargreavesian@hotmail.com

Government proposals in brief

Media ownership consultation paper 2001