The most controversial of the changes is the abolition of the two-out-of-three rule, which stops media owners from controlling a newspaper, television and radio station in the same market. Removing it would allow, for example, Fairfax Media to merge with the Nine Network (although Fairfax has stressed it is not keen on free-to-air television assets).

No changes to sport

The rule is deemed to be outdated given the rise of digital media players led by Google, Facebook and Netflix, but some Labor MPs are concerned that scrapping the rule could allow Rupert Murdoch's News Corporation to tighten its grip on Australian media.

A spokesman for shadow Communications Minister Jason Clare told The Australian Financial Review: "Labor welcomes reports that the government has finally made a decision on something.

"The government has not released the detail of their proposal or actual legislation. When they do Labor will consider it on its merits through proper shadow cabinet, caucus and parliamentary committee processes."

It is understood that Senator Fifield's package does not include any changes to the anti-siphoning list, which quarantines major sporting events for free-to-air television networks.

That news will upset cable and satellite TV monopoly Foxtel and its co-owner, News Corp, which has pushed hard for the list to be reduced, although it remains possible that changes could be made at a later date.

The pay TV sector's chief lobbyists expressed disappointment the decision would amount to a "modest media reform package that did not extend to dismantling regulated privileges enjoyed by commercial free-to-air broadcasters".


"The future of the media industry will require a long-term program of reform to increase competition and dismantle protections that continue to skew investment away from innovative technology and towards old business models," said Australian Subscription Television and Radio chief executive Andrew Maiden.

He added: "We are naturally disappointed that it appears further, more extensive reform may need to wait. Our members stand ready to increase their investment in local content and jobs, bringing greater competition and viewer choice to Australian television, as soon as further reforms are announced."

The least controversial proposal is the scrapping of the reach rule, which prohibits television networks from broadcasting to more than 75 per cent of the population and has the effect of preventing metropolitan networks Seven, Nine and Ten from merging with or acquiring their regional affiliates Prime Media, WIN Corporation and Southern Cross Media.

Industry sources believe the government could pursue its removal in isolation if it cannot guarantee support for the two-out-of-three rule.

In order to assuage regional MPs who are concerned that local news be protected once the reach rule goes, changes will be made to the points system that is used for local content obligations. But the extra demands will take effect only if a regional network has a change of ownership.

"It's encouraging to hear that the government is moving forward on the removal of these outdated pieces of legislation," said WIN Corp chief executive Andrew Lancaster. "Regional broadcasters are being made to compete with companies and new technology that aren't constrained by these old laws. The quicker they are removed the better."

"If the reports in the media today are correct, then we are pleased that Cabinet has seen fit to support Minister Fifield's media reform package," said Prime Media chief executive Ian Audsley.

"This will hopefully see an end to outdated media laws that distinctly disadvantage regional television broadcasters. Prime has maintained its position in relation to this matter for three years, and in that time we've engaged deeply with many member's of parliament on the issue of the audience reach rule and the two-out-of-three rule. So we would hope that armed with this knowledge, MPs who believe in a future for regional TV will work to ensure a rapid passage through the Parliament."