Seven West Media boss Tim Worner says regional TV running 'scare campaign'

However, Southern Cross Austereo chief executive Grant Blackley, who began at the television and radio company last week, said change was essential to create a level playing field in the media industry.

Mr Worner said the regional broadcasters would be better off fighting for a reduction in broadcast fees, which would allow them to reinvest money into local content.

"Regional broadcasters are running a scare campaign that is all about getting them ready for sale and nothing to do with a commitment to local news," Mr Worner said.

"Removing the reach rule will do nothing more than achieving the very outcome they claim they are trying to prevent – extraction of costs from a merged entity at the expense of local content and local jobs."

The government should require regional broadcasters to invest in local news in return for a reduction in licence fees, Mr Worner said.

"We expect our regional affiliate to live up to its obligations to provide local news. Prime's most recent results were the fourth consecutive period of growth for them and came off the back of Seven's market-leading programming and support.  We expect them to live up to their side of the bargain and continue to provide local news as a key element in driving revenue for us both."

Renewed pressure

Last week Prime Minister Tony Abbott was put under renewed pressure to rethink his position on media reform, as media groups and his rural and regional MPs pushed for the issue to be discussed.

Mr Abbott reiterated his view that the big players needed to hash out a deal that they all agreed on. However, this seems unlikely, with News Corporation and Seven West Media, which have lobbied the Prime Minister, against the mooted changes.

Southern Cross boss Mr Blackley said it was "highly problematic" for the government to ask the media industry to reach consensus on reform when many players were already entrenched in their positions.

The former Ten Network Holdings chief executive said that both the "reach rule" preventing TV networks from broadcasting to more than 75 per cent of the population and the "two out of three rule" stopping media companies from owning a radio network, TV station and newspaper in the same market needed to been reviewed.

"There has been a substantial shift in terms of competition in the marketplace and it is only natural that government should respond and review those laws and bring us back to a level playing field for the future," Mr Blackley told Fairfax Media.

"It is difficult to set an agenda where you ask the marketplace to come to consensus on a particular issue. It is highly problematic for government to ask the industry to adopt a common view and to talk as one voice when what we're seeking is a diversification of voices and views."

Back on the agenda

Mr Blackley said he supported the commentary from Prime Media Group and WIN Corporation, which in recent weeks have called on the government to put media reform back on the agenda.

Prime chairman and former News Limited boss John Hartigan expressed his worry that Mr Abbott's "captain's pick", taking reform off the table, would diminish the voice of regional Australia.

Mr Blackley said Southern Cross would like to have its own voice representing its own interests and views.

"Those interests and views are effectively very common but we will certainly have a voice in Canberra. We will be a supporter of that discussion and we will be a very active member of those discussions moving forward," he said.

The issue of media was reignited two weeks ago when the government was seeking to change legislation that would allow SBS to double the amount of advertising it could show in prime time.

Labor and the Greens both opposed the changes, which ultimately failed, so the government began negotiating with crossbenchers. Palmer United senator Zhenya "Dio" Wang suggested adding amendments to abolish the two-out-of-three rule.

Instead, he agreed later to introduce a private member's bill, which would cause a cross-party parliamentary committee to look at the reforms.

It is understood Communications Minister Malcolm Turnbull supported this approach but Mr Abbott did not.