Australian newspaper publisher John Fairfax Holdings has joined News Corporation in refusing to support planned changes to the country's media ownership laws.
Fairfax, the second largest newspaper publisher in Australia behind News Corp, has opposed the government reforms, which analysts believe would lead to a spate of takeovers.
"The government's media package as it currently stands has become so flawed that it should be defeated by the Senate," said the Fairfax chief executive, David Kirk.
The new laws, due to be introduced to parliament on Thursday, would relax 20-year old foreign ownership limits for media companies and allow newspapers and television stations to own each other in the same market.
The prime minister, John Howard, has said he wants media owners to broadly agree on the new laws and would like them passed by parliament by the end of the year, before the election due in late 2007.
However, opposition from within the government could see the changes defeated. Two members of the government have warned they might vote against the changes in the upper house Senate, where the government has a one-seat majority.
Mr Howard said today he was open to "fine-tuning" the proposed cross-media legislation if that's what a Senate inquiry recommends.
"I'm not going to commit myself to further changes but I'm not going to rule out fine-tuning either," he told Australian Broadcasting Corporation radio in Perth.
Under the new regime, each capital city market will have a minimum of five media owners and each regional market at least four, with the Australian Competition & Consumer Commission regulating any mergers.
Current laws prohibit newspaper, radio and television companies in the same city from holding more than 15% of each other.
But some politicians are concerned the new laws won't do enough to protect media diversity in non-metropolitan areas.
The government also plans to auction two new digital TV licences, one broadcasting information services or home shopping and another delivering programmes to mobile phones and laptops.
Fairfax said allowing existing television broadcasters or pay-TV station Foxtel to control the second licence would limit the opportunities for newspaper companies and other information providers to offer content that could compete with the free-to-air stations.
"This legislation frankly is skewed towards the interests of free-to-air," the Fairfax chairman, Ron Walker, told reporters.
News Corp has said it opposes the changes because they continue to protect TV companies from new competition.
