Prime Minister Tony Abbott is considering a proposal from Communications Minister Malcolm Turnbull to relax media ownership laws, a decision expected to trigger major media mergers if approved.
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Mr Turnbull this week sent a policy recommendation to Mr Abbott's office to scrap the so-called "two out of three" rule and the "reach" rule.
The "two out of three" rule restricts media companies from controlling more than two out of three platforms in any market across newspapers, television and radio.
The rule prevents potential deals such as Fairfax Media merging with Seven West Media or Nine Entertainment Co.
The "reach rule" effectively prevents the creation of national television networks by banning networks from broadcasting to more than 75 per cent of the population.
Mr Turnbull – who shelved plans to change media ownership laws last year because of a lack of consensus in the industry – believes that the laws have become obsolete in the digital age and should be removed.
Regional television broadcasters have been strongly lobbying for the reach rule to be scrapped which is expected to help win support from the National Party and Labor.
Of the major media companies, Kerry Stokes' Seven West Media has resisted most strongly any attempts to relax the laws in recent times. The priority for News Corporation Australia, which co-owns Foxtel, has been watering down the sports anti-siphoning list so that more premium sport can be shown on pay television. There are no changes to anti-siphoning in Mr Turnbull's policy recommendation.
If Mr Abbott backs the proposal, it will then go to cabinet for official approval. In recent days Mr Turnbull has highlighted his role reforming Australia Post and the National Broadband Network.
Earlier this week Prime Television chairman John Hartigan launched a blistering attack on Mr Turnbull in which he accused him of having a "woeful" record as Communications Minister.
"[Since] he became Minister for Communications, he has failed to do anything to address the anachronistic media legislation," Mr Hartigan said.
"There is a serious imbalance in the market, with some media companies able to secure unfettered, unregulated and unrestricted access to Australian television audiences and advertisers via the internet.
"I cannot understand how he can turn a blind eye to the abuse of market power that's going on right under his nose."
Mr Turnbull is understood to have planned his policy recommendation before Mr Hartigan's intervention in the debate.
Correction: A previous version of this article incorrectly reported that Paul Keating introduced the "two out of three" rule as Treasurer. The rule was introduced by the Howard government in 2007.
