Network Ten: deal or reform? There are three big conventional regulatory issues with any Ten takeover. THE mogul-controlled Ten Free-to-Air TV Network is ripe for takeover. Will we see yet - just - another change of ownership of a major media property? Indeed would any change at Ten trigger further media takeovers, as has happened so often in the past? Or would a change of control of one of the three commercial FTA-TV networks open the door to sweeping reform of both the regulation and structure of the media sector to make it "21st century compatible," so to speak. Indeed, should it be used to force such a change, as right now we are still operating with essentially the structure - a consequence of the rules which remain essentially the same - established close to a quarter of a century ago, around 1990. That was before the internet existed; heck, even basic mobile phones were really only just arriving - to be used for something very strange: making phone calls, with people, you know, actually talking to each other. "Selfies" and Kevin Rudd were far off in the unknown future. Those were the days when not only were - commercial - FTA-TV and newspapers really dominant, but the ABC was nothing like the all-powerful, uncontrollable, answerable-to-no-one, media megalith that it is today. Now both FTA-TV and mainstream print are under great stress as a consequence of the explosion of real-time, literally, global access to content thanks to the internet, and even more crucially, reverse access to local Aussie eyeballs by offshore content "providers." Such that right now we are in a Hunger Games-style race between global content creators and global eyeball aggregators and channellers - most notably of course, Google - to dominate the media space and the media dollars. Yet all that 1990s vintage regulation and restriction remains both local and limited - but all too pervasively restrictive - to mainstream FTA-TV and print. It's like we are channelling regulation and trying to structure the media industry through a limited set-top box - when the "TVs" all have not only their own digital tuners but are connected directly to the internet and smart phones. Ten is a company waiting to be "taken over." It's struggling to survive and it has four active shareholders - three billionaires in James Packer, Gina Rinehart and Bruce Gordon, and Lachlan Murdoch, son of course of Rupert. That usually signals an unstable situation. Further, only Murdoch arguably has any serious long-term interest in Ten and the media more broadly. Both in his own right - his interest in and commitment to Australian media - and as a "Murdoch." He is now the nominated (joint, with his brother James) successor to his father, as now co-chairman of both arms of the empire, the "overseas" and electronic-focused 21st Century Fox and News Corporation, with its significant presence in Australia, including as publisher of this paper. For whatever reason Packer bought into Ten - most obviously, to protect the value of his stake in Fox Sports, ahead of selling it to NewsCorp - it has long since dissipated, along with most of the money he outlaid. He then of course brought in Murdoch. Rinehart initially acted on the basis of: "I'll have some of what he's having," on an essentially commercial basis. With her move on to the Fairfax Media register, this morphed into some vague hope of recreating a Fox News Channel style operation down under; but that's also dissipated. Gordon has a clear interest in who controls Ten with his investments in subsidiary capital city stations and regionals. But living in Bermuda and aged 85 - he's even older than Rupert - he's unlikely to make a long-term commitment to riding through sweeping structural and regulatory change. That seems to leave Murdoch and/or Foxtel as the "natural buyer." The latter has joined with the Discovery Channel - one of those global content providers, which operates late-20th century outside a conventional delivery structure like a FTA-TV network - to look at Ten's books. A number of other players from Time Warner - just sending a (tiny) shot across Rupert and Lachlan's bows; you come bidding for us, we'll return the compliment? - and the usual collection of hedge fund and private equity buyers are sniffing around. Ten has two critical assets, which are both gifts of the 1990-era pre-modernity regulation, modified in the mid-2000s by the Howard government to give the FTA-TV networks a breathing space free-kick. The modification was the two extra digital channels. This has been absolutely crucial to the networks generating much needed - so far, low-cost - revenue, as the profitability of their main channels came under pressure, in the all-important context of their "river of gold" core asset. This is the pervasive anti-siphoning rules on major sports, which works not only to award control of the big eyeball-attracting events like last week's Melbourne Cup and the AFL and NRL seasons to the FTA-TV networks, but also enables them to monetise those events by onselling (usually shared) access to Foxtel. The first is the ACCC and competition; the second is allowable FTA-TV reach and the third is foreign acquisition. The ACCC has had two positions over the years. One that Foxtel and the FTA-TVs were not in competition - when Foxtel was seeking to expand in the subscription-TV space. And more recently, that they are in competition. The reach rules - supposedly to go - restrict how many stations across Australia a network can have; along with how many stations (one) they can have in one city. While there is no longer total prohibition on foreign ownership of a FTA-TV network, it is regarded as a "sensitive sector" requiring special analysis. So, will a "conventional" battle - or simply, sale - of Ten unfold? Or will the opportunity to taken to bring the rules into the 21st century, enabling a 21st century-viable industry to develop? As I've argued before, there's probably only space for two mainstream networks. Accepting that could allow ownership of Ten to be split between Seven and Nine. Despite the fact that Ten's unusually poor ratings performance has uniquely enabled both Nine and Seven to garner around 40 per cent of FTA-TV ad revenues, they are struggling to build sustainable profitability. This has been partially disguised by the low-cost revenues of their digital stations. But doing this would only be reasonable if you also removed the shackles on Foxtel - which seemingly lock it into a 30 per cent eyeball ceiling. More broadly it seems absurd to try to keep "guessing the future" by continually updating if over long-delayed time frames - pervasive regulation.