Scoop Feature: Who Owns Aotearoa’s Media?

Published: Fri 23 Aug 2002 09:40 AM
Who Owns The Media?
News Media Ownership & Democracy In Aotearoa
by Isaac Kearse - email him with comments.
Aotearoa Independent Media Centre – A-IMC
Also Published At:
Three multi-national corporations dominate the news media in NZ, combined they control:
-- Over 90% of daily newspaper circulation
-- Over 90% of commercial radio stations
-- Commercial free-to-air and pay-TV (excluding TVNZ)
In the June 2002 issue of Pacific Journalism Review, Bill Rosenberg, a writer on foreign investment with the Campaign Against Foreign Control of Aotearoa (CAFCA), documents this concentration of ownership, the track record of these media giants, and the 3 men that control them.
Introducing, the 3 billionaires that stand behind New Zealand's largest media companies:
(1) Independent Newspapers Ltd (INL)
Rupert Murdoch controls NZ's largest media company through his US-based News Corp Ltd empire. INL provides 70% of total newspapers, magazines, and sporting publications in NZ. Newspapers include: DominionPost, Chch Press, 57 community, 7 provincial, 93.6% of national weekly, and 49% of national daily papers. INL also controls SKY-TV (66%) which has a near-monopoly on satellite and UHF pay-TV.
Globally Murdoch also dominates pay-TV with BSkyB (UK), Vox (Germany), Star (Asia), Foxtel/Sky (Aus), Fox (US), and JSkyB (Japan). Other interests include film: 20th Century Fox Studios, publishing: HarperCollins, TV Guide, & newspapers: 175 worldwide (including 40% of UK national papers). Described by Vanity Fair as "arguably the most powerful private citizen in the world", Murdoch is infamous for editorial interference in his papers, explaining in 1999: "it’s my responsibility sometimes to interfere". In 1992 Murdoch claimed his UK newspapers could "set the agenda" for politics, as well as influencing the outcome of elections. Few would argue, In 30 years no UK party has won an election while opposed by THE SUN, Murdoch’s prized tabloid. The most famous of these elections was in 1997, when THE SUN, previously supporters of the Conservatives as far back as Thatcher, did a U-turn and destroyed the Tories political reputation with sustained assaults such as "WE'VE ALL BEEN SCREWED BY THE CABINET". This handed victory to "new" Labour leader Tony Blair, who made it clear he would scrap Labour opposition to Murdoch's UK media holdings before the election. Blair also proved an excellent spokesman for Murdoch while in office on such matters as: predatory pricing, cross-media ownership, and even encouraged the Italian Prime Minister to approve sale of pay-TV company Mediaset to Murdoch.
In 1996 WTVT, a Florida Fox-TV station owned by Murdoch provided perhaps the clearest example of censorship and interference by a media owner in history: In November 2 WTVT reporters uncovered that Florida's milk was coming from cows fed with a Monsanto hormone called rBGH. The hormone is legal in the US but was banned in many European countries after suggestions from medical researchers, that it may lead to cancer of the colon in humans. Monsanto's lawyers contacted the executives of Fox-TV, and complained that the documentaries were inaccurate. Fox sent David Boylan to Florida, and eventually after more than 70 rewrites, the show was pulled, and the reporters fired, despite WTVT finding no fault with the reporting. In a moment of insane candour, David Boylan told an unvarnished truth which should be framed and stuck on the top of every television set:
"We paid $3 billion for these television stations," he snapped.
"We'll decide what the news is. NEWS IS WHAT WE SAY IT IS."
On August 18, 2000, a Florida State court jury unanimously determined that Fox "acted intentionally and deliberately to falsify or distort the plaintiffs' news reporting on BGH." Censorship has also been undertaken by Murdoch to gain access to the huge Chinese pay-TV market, including dropping the BBC from his Asia Satellite service, and intervening to stop HarperCollins from publishing a book critical of the Chinese government.
Murdoch has made a reputation of hostility towards unions in the UK. In 1986 Murdoch moved his tabloids to a new high-tech operation known as "Fort Wapping". He secretly moved non-union staff into Wapping leading up to the change-over, and misinformed the printing unions that he would produce a new paper called The London Post, and no staff cuts would be necessary. When the unions realised they had been manipulated they went on strike, and over 5,000 were promptly fired without any redundancy under Thatcher's anti-union laws, saving Murdoch millions.
INL has continued this relationship with union workers to New Zealand. In 1992 INL's chairman praised the Employment Contracts Act as "one of the most important developments of recent years". The reason for his enthusiasm was related to Parliament by the Engineers Union in June 2000 when it named INL and Telecom at the top of a list of nine companies which acted in bad faith under the Act. The union said the companies "stood out for their blatancy in denying workers the choice of union membership. They induced members out of collective contracts and refused to bargain collectively." INL had offered financial inducements for workers not to join the collective, obstructed those who later wanted to join the collective, and pressured existing members to leave the collective. These attitudes continued into 2001 when the Employment Relations Authority ordered INL to meet its employees’ union representatives, finding that it had failed to act in good faith.
INL was runner-up in the 1997 Roger Award for the worst trans-national corporation in New Zealand:
"because of the immense power element they represent in an all-pervasive manner, in pursuit of the dominance and the imposition of neo-libertarian market-driven ideology". In the words of one judge, "The day in and day out publishing of INL’s biased view of the world can be equated to a dangerous propaganda machine which deeply influences the hearts and minds of New Zealanders".
(2) Wilson & Horton (W)
Tony O'Reilly may be remembered as CEO of Heinz when it swallowed NZ icon Watties. In a less publicised move in 1995, his Irish company Independent News & Media (INM), took control of the last major NZ owned media company W In 2001 in a complex transaction O'Reilly restructured his Australian assets, transferring W to Australian Provincial Newspapers (APN) in order to circumvent Australia’s foreign and cross media ownership laws, and to release funds for Australian take-overs. In newspapers W accounts for 41.6% of daily NZ circulation, including 28.1% from The NZ Herald, the largest paper in NZ, 32 community & 8 provincial, also The NZ Listener, NZ Woman’s Weekly, 14 commercial printers, & Look Outdoor Advertising. In the publishing sector it is second only to INL, leaving less than 90,000 readers with a daily newspaper truly "independent" of these giants. In commercial radio however, W is still the dominant player with The NZ Radio Network (TRN). INM controls TRN through APN/W (67%), in partnership with infamous US behemoth Clear Channel Communications (33%). TRN was formed in 1996 when the commercial stations of Radio NZ were sold for $89 million, it currently has over 50% of the radio advertising market, including NewstalkZB, Radio Sport, 91ZM, and Classic Hits.
Globally INM's core interests lie in newspaper publishing, electronic media (internet & radio), and outdoor advertising. Spanning four continents, INM has market leading newspaper positions in Australia, Ireland, South Africa, NZ, and Portugal, in all over 160 titles including flagship The Independent in London, which recently had its first strike action in 13 years. This was in response to a wage freeze for 2002, despite, the union says "job losses, cuts to resources and the increased demands arising from recent redesigns mean staff have to work longer and harder", and some workers not receiving a pay rise in 7 years.
O'Reilly is widely known in the UK and Ireland for his aggressive anti-union stance, and he seems to have exported this attitude to Aotearoa with the NZ Herald. In June 2001 Herald editorial staff went on strike as part of a fight for their right to be covered by collective employment contracts. The only coverage this received in the paper was a 37-word story hidden on page 5, and a full-page ad that management took out in the Weekend Herald to provide its view of the dispute. The staffs union advocate wrote a letter in response but was denied publication. After Steve Davis resigned as editor last year he relieved that he worked 7 days a week for 3 months during the strike, and would be pursuing a personal grievance claim against the herald. He is also writing a book on his time at the Herald, and sources close to Davis say he felt under more pressure as Herald editor than during his 10 years on Fleet Street. Allegations of corporate influence over the newspaper include coming under pressure from advertisers to write friendly copy, and W management and marketing influencing new coverage.
One blatant example of this was transforming a $2.39 million bottom line loss for the 31 December 2000 year into a "record operating profit of $96.7 million", on page 5 of the Herald, apparently an excellent place to find interesting stories. Davis was also under pressure, sources claim, to give prominence to ex-Canadian Prime Minister Brian Mulroney's visit to NZ. O'Reilly invited Mulroney, who is on the international advisory board of INM, to "spread the free-trade gospel" according to political review editor Chris Trotter.
On the same day Fran O'Sullivan, associate editor of the Herald, had organised a seminar with Mulroney, Naomi Klein was giving a speech on global resistance to corporate power. "In her role as a newsmaker Klein as treated as a non-person", accusesTrotter, "touting what was apparently a non-argument". This was despite the fact that 800-1000 people had packed Klein's venue, making it the largest political gathering in Auckland since the 1999 election. Trotter describes the Heralds coverage as propaganda, and comments:
"The ownership of a significant daily newspaper, in the context of a society which still subscribes to the precepts of democracy, entails a number of crucial responsibilities. Foremost among these is the responsibility to provide its readers; citizens all; with the information they require to arrive at sound judgements about political and economic affairs. The New Zealand Herald’s campaigning stance on the issue of free trade, its advocacy journalism in favour of joining NAFTA, and its close association with the knowledge conference; a government propaganda exercise; call into question both its willingness and its ability to accept that responsibility. Indeed, the Herald’s leaderwriters demonstrate an impatience with the democratic process that is truly worrying. It’s almost as if they believe that the voting public and politicians who "pander" to its "prejudices" are not to be trusted with economic decision-making."
(3) CanWest Global Communications Corporation
Israel "Izzy" Asper is the former Liberal (conservative) leader for Manitoba province in Canada, and sits at the helm of CanWest Global with 65% of equity, and over 90% of voting power. CanWest moved into NZ in 1991, buying TV3 for $89, and introducing TV4 in 1997 as a channel with no news, current affairs, or new local content. In 1999 both stations reached a new low, with no new NZ comedy or drama the entire year, improving in 2000 only with NZ On Air funding. In 1997 CanWest acquired the MoreFM network, and in 2000 RadioWorks, combined accounting for 47% of advertising revenue, including Solid Gold, Radio Pacific, The Edge, The Rock, & Channel Z.
In 1999 TV3 attracted criticism for donating 25,000 to Labour and National, and no minor parties. In 2000 TV3 was fined $500,000 by the Broadcasting Standards Authority (BSA) for a 20/20 program. Then in November 2001 CanWest station, The Rock was fined $24,500 by the BSA when it upheld complaints over its "jokes" about incest, child abuse, child sex, sodomy and masturbation. The station was fined $5,000 for 7 complaints in 2000 but kept breaching standards, and kept "accidentally" deleting shows when required to keep them, by law, for 35 days for BSA complaints.
Globally CanWest has significant TV broadcasting interests in NZ, Australia (TEN Network), Ireland (TV3 & UTV), & Canada with national network Global TV, 5 regional, & 7 digital channels. CanWest also has a poor record of local content on its Canadian national network, consistently spending much less money on Canadian programming. In a $7.7 Billion transaction in 2000, Asper entered the newspaper business buying the massive Canadian publisher Hollinger, making him the leading publisher in Canada with over 130 papers, including 14 major dailies and 50% of Canadians largest paper, The National Post.
Izzy is no stranger to politics and lobbying, at a shareholder meeting he commented: "We continued our efforts to persuade governments to recognise the globalisation of our industry and liberalise laws which inhibit or limit foreign ownership in broadcast licenses." In NZ there was nothing to stand in his way. He praised our "zero restrictions on foreign investment in the media", mentioning "Sir Roger (Douglas) has travelled to Canada and is revered." The Aspers brought the issue of media concentration into the spotlight when, In December 2001, CanWest ordered all its Canadian dailies to begin running corporate "national editorials", which were not to be contradicted by local editors. This generated a storm of protest in Canada and abroad, with many journalists at the Montreal Gazette immediately going on a by-line strike, by withholding their names from stories.
Over the months that followed dozens of publishers, editors, and columnists were censored, disciplined, suspended, or fired for opposing this company policy. Lower taxes, and less regulation, are among favourite Asper causes, but it is his support of Israel and the Liberal Government in the editorials that have caused the most controversy. One editorial ran following an attack on Israel by Palestinians, arguing that Canada should back Israel no matter how it responds, "without the usual hand-wringing criticism about 'excessive force.'" The publisher of the Ottawa Citizen was fired in June 2002 after writing a piece calling on the Prime Minister to resign.
Stephen Kimber, columnist at Halifax Daily News, wrote that the Aspers treat their papers like "personal pulpits from which to express their views", and this is major problem because "In most of the markets in which their newspapers operate, they are the only game in town". This column was simply not printed and Kimber resigned. All this happened after CanWest made a clear commitment to local newsroom independence in its written submission to the House of Commons Standing Committee on Canadian Heritage of 10 September 2001. Internationally CanWest has been condemned by the International Federation of Journalists, the Index on Censorship, and the International Press Institute. Following the public outcry there is pressure for an inquiry into media concentration in Canada, and thousands of people have quit their subscriptions to CanWest newspapers.
CanWest is now looking to sell its NZ assets because of financial pressures caused by the Hollinger acquisition, leaving the company $7 billion in debt. Potential Australian buyers include radio network Austereo, and Kerry Packer through his Publishing and Broadcasting Ltd (PBL). PBL, owners of Channel 9 in Australia, recently started providing content for Prime TV in NZ, with an option to buy 50% of Prime by 2008. PBL subsidiary ACP already has a large stable of NZ magazines including: Woman’s Day, Australian Woman’s Weekly, Metro, North & South, Fashion Quarterly, Little Treasures, Property Press, Auto Trader, and Buy, Sell, and Exchange. Kerry Packer, Australia's richest man, has recently been on the acquisition trail in NZ, buying 15 classified titles from Liberty Press.
Other news media:
The New Zealand Press Association (NZPA), is NZ’s largest news service & agency. It is owned jointly by W, and INL, and provides them with over 1000 news items every day, 24 hours a day. W and INL also operate two of the most popular news websites with The NZ Herald, and respectively.
The most popular website in NZ is the xtraMSN portal of Telecom’s dominant ISP. This is a joint venture between xtra and Microsoft, consolidating the internet software experience of Microsoft, and the 75% reach of xtra's Internet portal. News is provided for the portal by TV3 , IRN, Reuters, The Independent Business Weekly , and it also offers National Radio’s audio archives, perhaps due to their lack of funding. The Commerce Commission are currently taking court action against Telecom, in association with a formerly free ISP. The case centres on Telecom’s anti-competitive practices such as predatory pricing, and restricting access to rival ISPs. Bill Rosenberg comments on this situation:
"Telecom has repeatedly used its dominance and control of Aotearoa/New Zealand's telecommunications to undermine the position of its ISP competitors. It's another example of the short-sighted stupidity of allowing this fundamental portion of New Zealand's infrastructure to be in private hands with no real competition in residential connections, nor in many other parts of the telecommunications network."
The top 10 websites for June 2002 in NZ where:
Property Unique Audience Reach % Time per Person 1. XtraMSN/MSN
0:44:52 2. Yahoo!
0:28:03 3. Microsoft
0:04:16 4. Google
0:13:54 5. AOL Time Warner
0:11:49 6. NZ Information Services Team
0:11:06 7. Lycos Network
0:05:42 8. About-Primedia
0:03:55 9. Television New Zealand
0:09:00 10. Telecom Directories
Other online news providers include: scoop, newsroom, kiwi report, Kiwinews, newslinks, NZ News, Citinews, aardvark, TV3, nzoom (TVNZ), IDG, infotech, NBR, The Independent, and the Aoteaora Independent Media Centre.
Is the ownership of the news media important? YES
Consider this explanation of the media ownership laws in Australia:
"The purpose of the legislation is to encourage diversity in the ownership of the most influential forms of the commercial media: the daily press and free-to-air television and radio. The justification for the rules is that the effective functioning of a democracy requires a diverse ownership of the daily mass media to ensure that public life be reported in a fair and open manner."
New Zealand has no laws restricting cross-media ownership (e.g. newspaper & radio in same market), or limitations on foreign investment in media. We are the only western democracy to take deregulation to this extreme, with predictable results. In 1999 prominent US Media Critic Robert McChesney visited New Zealand, commenting on global media concentration he observed:
"The situation may be most stark in New Zealand, where the newspaper industry is largely the province of the Australian-American Rupert Murdoch and the Irishman Tony O'Reilly, who also dominates New Zealand's commercial-radio broadcasting and has major stakes in magazine publishing. Murdoch controls pay television and is negotiating to purchase one or both of the 2 public TV networks, which the government is aiming to sell. In short, the rulers of New Zealand's media system could squeeze into a closet."
Rupert and Tony have since tightened their grip on newspapers, Izzy Asper joined them in the closet in 2000 with the purchase of RadioWorks, and the National Government did not sell TVNZ. In a recent article McChesney also outlines the role of the media in a democracy:
"Within democratic theory, there are two indispensable functions that journalism must serve in a self-governing society. First, the media system must provide a rigorous accounting of people in power, in both the public and private sector. This is known as the watchdog role. Second, the media system must provide reliable information and a wide range of informed opinions on the important social and political issues of the day."
The foreign corporate domination of NZ news media raises a number of serious issues about whether it can fulfil its democratic functions. Ownership concentration is detrimental to democracy for a number of reasons, including:
(1) Direct intervention in news content: owners do have the power to censor stories they disagree with, or plant others, undermining journalist independence. There is no way to know how often this happens, but the examples noted above should provide some indication that it does happen, particularly when 1 person owns the majority of a company.
(2) Indirect influence on news content: this is a lot more prevalent than direct interference, as author of ‘The Media Monopoly’ Ben Bagdikian notes:
"The new owning corporations of our media generally insist that they do not interfere in the editorial product. All they do is appoint the publisher, the editor, the business manager and determine the budget. If I wanted control of public information, that is all I would want. I would not want to decide on every story every day or say "yes" or "no" to every manuscript that came over the transom. I would rather appoint leaders who understand clearly who hired them and who can fire them, who pays their salaries and decides on their stock options. I would then leave it to them."
In a survey of nearly 300 U.S. news executives and journalists in March 2000 in association with Columbia Journalism Review, the Pew Research Centre found that:
"About one-quarter of the local and national journalists say they have purposely avoided newsworthy stories, while nearly as many acknowledge they have softened the tone of stories to benefit the interests of their news organizations. Fully four-in-ten (41%) admit they have engaged in either or both of these practices."
(3) The profit motive: perhaps the most significant and insidious influence on news journalism. The reason large media companies come to dominate a market, and develop global reach, is their aggressive pursuit of profits. To cut costs and increase the bottom line, large conglomerates will lay off staff and slash news budgets. They take advantage of their huge size by distributing cheaper national and international news, if possible using the same newsroom for different operations e.g. newspaper & radio. The effect of this is that people have access to less local news, and less diversity of opinion and content, e.g. most regions have only 1 daily paper.
This also means "merging" newspapers in the same market is seen as an efficient strategy, as in the recent DominionPost "merger", despite the fact the Post was still making a profit, resulting in 90 job losses. Profit orientation also leads to media outlets focusing on inexpensive news, and reliance on corporate and government sources, rather than investigating and reporting their own stories. This has lead to a "dumbing-down" of TV news especially, replacing important journalism with sports, trivia, celebrities, "human interest" stories, corporate/political press releases, and seriously flawed election coverage. This is demonstrated in the Pew Research Center survey results:
"Nearly eight-in-ten (77%) say stories that are seen as important but dull are often (27%) or sometimes avoided (50%). A majority (52%) also says that overly complex stories are at least sometimes ignored. Fewer but still significant percentages report that such stories are not pursued because they conflict with organisational interests. More than one-third (35%) say news that would hurt the financial interests of a news organisation often or sometimes goes unreported, while slightly fewer (29%) say the same about stories that could adversely affect advertisers."
(4) Influence of advertising on news, although not directly related to ownership, still has a huge influence. Bill Rosenberg comments: "Media ownership is important, but commercialism is probably even more so. The need to attract and retain advertisers, and for media companies to make profits comparable to other investment, have profound effects on media content. The real "customer" of commercial media outlets is the advertiser rather than the reader, listener or viewer."
(5) Interlocking corporate directorships, e.g. Telecom CEO Theresa Gattung is on the board of INL (due to a 9% shareholding) and could potentially ensure no serious criticisms of her company through INL media.
Structural Problems
These factors call into question whether the media can actually fulfil its watchdog role in any competent way. One of the main power structures in NZ are corporations, the largest mostly foreign owned. Can we realistically expect the media to keep a check on this power, and provide critical coverage when it costs more to do so, and the media depend on large corporations, and government sources, for a large amount of news?
What about issues where the media clearly has a vested interest such as business taxes, "free trade", foreign investment, media ownership regulation, and public broadcasting? Although the rulers of our media have shown a willingness to use their power for personal gain I want to emphasis that this is NOT a conspiracy theory. The main problem is not that 3 evil billionaires are manipulating our consciousness, but rather the corporate structure of our media system, and the lack of any regulation preventing domination and abuse by handful of people.
There is nothing inevitable about the downhill slide our news media has taken in the last 20 years. It is largely a result of "New Zealand Experiment" started in 1984 by Labour, and continued in 1990 by National, both with no electoral mandate. This religious commitment to the free market and foreign investment, combined with an equal hostility to public broadcasting in these decades has brought us to where we are today.
Public Broadcasting
National Radio is still doing an amazing job considering its lack of funding e.g. recent newsroom staff cuts, and we are lucky to have TVNZ at all, but these are by no means perfect solutions. This article has concentrated on the effects of ownership on the media product, but TVNZ has demonstrated that commercialisation, in particular advertising, can have a severe effect on the quality of broadcasting. When the business of the media is to sell audience attention to advertisers, rather than provide information, education, and diversity to the public the consequences are profound.
There used to be a requirement in NZ for broadcasters to demonstrate that they would act in the public interest before they were granted a licence. There was a time when the focus of TV was public interest, rather than advertising revenue. Politicians will tell you that a country this small cannot afford commercial-free public broadcasting. What they will not tell you is that in the 1990s the government "screwed TVNZ for over $200 million in dividends over the past decade while we know by Ministerial admission, that it has not put a cent back into the organisation", according to Paul Smith author of ‘Revolution in the Air’. Joan Curry, a writer for Friends of Public Broadcasting (FOPB) notes:
"When visiting NZ in 1999 Robert McChesney was scornful of the idea that New Zealand, with its small population, can’t afford a public broadcast television channel. It was, he said, a matter of political will, not money. He offered the example of Norway, a country which is about the same size, with a similar population and GNP and no wealthier than we are, which has a world class public radio and TV system."
We are currently waiting to see if the new government will go ahead and implement the charter for TVNZ. TVNZ will remain a commercial broadcaster, paying profits to the government, while trying to implement the public service objectives listed in the charter. It is dubious whether this is even possible, and there are no indications of how charter fulfilment will be measured, or offers of additional funding. FOPB, in their latest release treat the charter as a token handout, and call for a public referendum on public broadcasting and how it should be funded.
There are a number of options:
-- Funding by broadcasting fee (abolished by National), this ensures some independence from government
-- Funding from general taxation, although this is more open to government influence
-- Funding from commercial licence fees, or advertising tax on commercial broadcasters
-- Partially non-commercial channel, maybe ad-free news and current affairs
-- Funding NZ programs on all channels through NZ On Air, current method based on general taxation
-- 1 or 2 fully funded non-commercial public service channels
The current system were TVNZ and National Radio are expected to pay tax on surplus income, and can be forced to pay yearly dividends to the government is clearly flawed. Not only does it mean both organisations are massively under-funded, it also means the government of the day has too much potential power over broadcasting content. The broadcasting fee was useful in this regard, but there are other methods of maintaining independence such as making the appointing governors every 10 years to fulfil a public service charter, similar to the BBC.
Commercial News Media Reform
The NZ Experiment in media deregulation has not worked. I am not suggesting there is no place for the commercial news media, or even foreign ownership, but putting these interests first, before the needs of people and democracy, is a risk not worth taking. If we want to be informed, educated, represented, and entertained by our mass media, we must ensure they operate in the public interest. Until this happens democracy will remain an elusive ideal, more rhetoric than reality.
Bill Rosenberg suggested to me that: "We could replicate and improve" on Australia's media ownership laws, and: "We could also reduce the commercialisation of TV, and set up publicly or community owned non-commercial newspapers to provide competition and alternative news sources to the commercial ones. Indymedia is an example using the Internet. The Internet is itself an increasingly powerful alternative source of information and news. But mainstream media remain important because they set national social/political agendas."
The first priority for reform is to get the state of commercial media ownership on the public agenda. Here we face an unfortunate Catch-22: the vehicle for publicity and exposure is largely the commercial news media itself. Indymedia Aotearoa is an important step on this uphill track, but we must also find other innovative and low-tech ways of reaching a mass audience.
Much of this article is based on CAFCA's report on media ownership in Aotearoa. You can download a summary pamphlet here and view the full text here.

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