“We wouldn’t be able to unscramble this egg” declared the new Communications Minister Stephen Conroy yesterday, seemingly giving up on the task of re-regulating the ownership of Australia’s commercial media in the wake of the Howard Government’s radical reforms.

Sorry Minister, that is not good enough.

If you need evidence of the urgency of the situation, take a gander at Mark Day’s piece in The Australian today. Without a hint of regret, Day outlines a nightmare scenario – and yet one that is eminently feasible – in which the rump of James Packer’s media assets are sold to Rupert Murdoch’s News Limited, further concentrating the obscene amount of media power in that company’s hands.

As Day points out, there are no regulatory hurdles – except perhaps an ill-defined role for the ACCC – stopping Packer’s Consolidated Media Holdings selling its remaining media assets to News Limited. Packer’s CMH holds a 25% stake in Nine and Ninemsn. It also has a quarter share of Foxtel and a 50% share of the Premier Media Group’s Fox channels. It also owns websites such as Seek and Car Sales and through its 25% stake in PBL has a quarter share of the massive ACP magazine stable.

Amazingly all this could go to News Limited, even though News Limited already owns over 70% of the nation’s metropolitan newspapers, another 25% of Foxtel, the other half of the Premier Media Group and all of its other print and magazine and online assets.

Some of this could have happened without the Howard Government’s cross media changes, which allow a company to own two of the three major media types of radio, TV and print in the same market area.

If the Rudd Government moved quickly and rolled-back the Howard laws it would certainly prevent some of the above from occurring and would stem the loss of media diversity in the ownership of the major media types to the few isolated mergers that have already happened. But the new Government also needs to follow through fast with its promised “national interest test” in order to prevent some of the more extreme aspects of the above scenario advocated so breathlessly by Day today.

Would, for example, the national interest test prevent News Limited from acquiring all of the ACP magazines in addition to its already sizeable portfolio? Would the onus fall on the ACCC to order News Limited to divest some titles? Would the ACCC have an interest in regulating competition for websites when barriers to entry are supposedly so much lower?

Senator Conroy said it was looking at a national interest test proposed by the Productivity Commission to see whether it’s appropriate. The question is whether that test would guarantee the prevention of mergers of crucial media companies like The Age and 3AW and The Sydney Morning Herald and 2UE which are now all owned by Fairfax Media at the expense of media diversity.

Would the national interest test prevent News Limited taking over a commercial TV network in addition to its near monopoly in print? If not, the test is useless and legislation to re-regulate the sector should be drawn up quickly. No matter how hard it is to unscramble the egg.