What does it really mean for a Parliamentary committee to call Rupert Murdoch ‘unfit’?

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Today, a parliamentary committee conducting an investigation into Rupert Murdoch's News Corp.'s British entities concluded their investigation with a damning report.

"Rupert Murdoch 'not fit' to lead major international company, MPs conclude" is what's presently leading the website of The Guardian.

The thing is, it's not clear what this declaration means; and, in order for it to matter, a much more mysterious body, the independent British regulatory corporation called Ofcom, would have to do something with the report. And what that is likely to be is anyone's guess.

The Guardian took an "early and often" approach to reporting out misdeeds by Murdoch's British newspapers, even when many were sick of the story, until they struck gold last year.

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That was when The Guardian revealed that employees of Murdoch's now-shuttered British tabloid The News of the World had hacked into a cell phone belonging to Milly Dowler, victim of a kidnapping a decade ago, while police were hunting for her, presumably to gain exclusives about her.

Accusations of phone-hacking had previously featured British celebrities—football stars, members of Parliament, royals and their hangers-on—and in many ways, to the common man, the whole thing seemed like a war in heaven; God and his angels moving furniture around and causing a ruckus.

But it was really the Dowler case that put the country at odds with Murdoch, who after all can be as universally disliked there as he likes as long as Brits by the millions continue to buy his papers, and people worldwide continue to subscribe to his satellite services and watch his cable channels. And, as long as the government continues to renew his licenses to print and broadcast in the U.K.

"Rupert Murdoch is 'not a fit person' to exercise stewardship of a major international company, a committee of MPs has concluded, in a report highly critical of the mogul and his son James's role in the News of the World phone-hacking affair," reads the lead of The Guardian report, which cites in turn the report released by the culture, media and sport select committee of the British House of Commons today, after a long inquiry.

What does it mean for this committee to produce a report that calls Rupert Murdoch unfit?

Ofcom, the independent regulatory corporation created by the British parliamentary Office of Communications Act 2002, grants and scrutinizes broadcast licenses in the United Kingdom.

It is in the Ofcom law that the corporation must assess broadcasters applications for licenses, or maintenance of licenses, for whether their leaders "are and remain" "fit and proper."

There is some excitement about today's committee report because, after all, if the Parliamentary committee to which Ofcom reports to calls Rupert Murdoch unfit, how can Ofcom say otherwise?

The problem is it's never quite been explained what "fit and proper" actually means. And of course, Ofcom was created as an independent body for a reason.

A letter from Ofcom to John Whittingdale, chair of the committee that released today's report, is vague and hard to understand. It cites the need to await the results of civil trials and criminal and other "relevant" investigations before making any decisions about a licensee. But it never defines what outcomes from those investigations it takes to be "relevant."

You can read the whole letter here; but, be warned, it's a great example of why Britain needs a new Sir Ernest Gowers. Consider the sampling below:

In considering whether any licensee remains a “fit and proper person” to hold broadcasting licences Ofcom will consider any relevant conduct of those who manage and control such a licence.

And:

It is not for Ofcom to investigate matters which properly lie in the hands of other authorities, such as the police and the criminal or civil courts, and clearly we cannot and should not act whilst allegations are unsubstantiated. It would be unfortunate if action by Ofcom at this moment in time prejudiced any ongoing processes by the proper authorities or failed to take into account relevant information that was subsequently disclosed which may be relevant to a thorough and proper assessment.

Again it's not clear whether a criminal whose crimes do not include the violation of British media regulations is unfit or improper in a way that is relevant to Ofcom. And it's hinted that not all conduct that is criminal is relevant:

As you would expect, we are monitoring the situation closely and in particular the investigations by the relevant authorities into alleged unlawful activities in regard to any evidence or findings of any relevant conduct.

This seems to suggest that not all criminal behavior is relevant. The end is the best, where Ofcom explains what they just wrote:

In this regard, we are writing to the relevant authorities to highlight our duties in relation to ‘Fit and Proper’ and indicating that we would like to be kept abreast of the timescales of their investigations and of any further information which may assist us in the discharge of our own duties.

As of March 9, Ofcom was still "assess[ing] the evidence" "emerging from various enquiries," of which, presumably, the Parliamentary investigation and report is one. (There will be the agglomeration of charges coming out of the Met, too, and whatever happens when and if those charges end up going to court; and there are other government inquiries still pending, and civil suits.)

Ofcom may interpret its brief purely in terms of whether a company or the individuals that control it have a history of flouting British press regulations. A "fit and proper" license holder, under a very strict definition of Ofcom's scope, could just be someone who is a fit and proper citizen of Britain's media industry from a regulatory standpoint.

Jason Chess, a partner at London media law firm Wiggin, had this to say last summer about the meaning of "fit and proper" in the News Corp. scandal:

[A] revocation of, or refusal to grant, a licence or change of control application on such ground to a reputable broadcaster with an otherwise unblemished compliance record would, to my knowledge, be an adventurous new exercise of Ofcom's discretion.

On the other hand, it's important to remember just how much power Ofcom does have, if it decided to use it, to make Murdoch's life difficult. Ofcom's powers and responsibilities are not limited to new applications for licenses, but can be applied to people or corporations that already hold a license. Look at this, from Ofcom's F.A.Q. page, in answer to the question whether News Corp., having withdrawn its bid to take over British satellite broadcaster BSkyB, comes under Ofcom's scrutiny at all:

We have an ongoing duty to be satisfied that BSkyB (including its controlling directors and shareholders) is fit and proper to continue to hold its licences. News Corporation holds 39.14% of the shares in BSkyB, and therefore Ofcom must take account of News Corporation’s conduct in assessing whether BSkyB is and remains fit and proper as a licence holder, as well as the conduct of BSkyB itself.

So while it is tantalizing to see this Parliamentary committee's use of the word "fit" in its resolution, the fact that they might just as well have chosen another word is to me a sign that they hope to influence Ofcom; in other words, that they don't, really, yet.

On the other hand, the whole News Corp. scandal has been a transformative moment for the British government's relationship to the press. David Cameron will continue to catch a lot of grief for his relationships with key players in the hacking scandal over the coming months, and there is a massive reevaluation of the role and responsibilities of the press overall. Who's to say that modifications to the Communications Act might not give Ofcom a little more direction, or that Ofcom itself might take on an "adventurous new exercise."

But, for the sake of sanity, it's worth remembering that Ofcom  has to date revoked one license. Look at this Question and Answer from Ofcom's F.A.Q. page:

Has Ofcom ever ruled that someone is not fit and proper?
In November 2010, Ofcom determined that Bang Media (London) Ltd and Bang Channels Ltd were not fit and proper persons to hold a licence. This was because of serious and repeated breaches of their licences, which demonstrated a disregard for their licence obligations and for the regulatory regime as a whole. We routinely assess all new applicants.

Bang Media, Ofcom's sole license-revocation victim, is, as you've probably guessed, a porn channel. You can read Ofcom's notice of license revocation here.