Abolishing media ownership rules would finally free Australian players to team up and take on international giants including Facebook and Google, Fairfax chief executive Greg Hywood says.

He told a Senate committee on media ownership reforms that Fairfax had been losing lucrative advertising dollars to foreign rivals, making it harder for the company to invest in producing quality journalism.

He backed the government’s plan to abolish the two-out-of-three media ownership rule preventing a proprietor from controlling more than two of three radio, TV and newspapers in the one area.

Rupert Murdoch controls the lion’s share of Australian newspapers. Photo: AAP

Dumping that “outdated” rule would give local media players the option of having talks about potential mergers that could help create a level playing field for them to take on global players and snatch back some advertising revenue.

“Our fundamental point is that the other players in the market, taking the bulk of the advertising in the market, can talk to anyone they like about anything and that is restricting the long-term potential for diversity in this community because it’s making it uneconomic to invest further in the media,” he said.

“Our issue is that we need to … look at the potential for broader equity in a broader platform arrangement so we can take a bigger chunk of that advertising.”

Federal Communications Minister Mitch Fifield wants to get rid of two media rules created in the pre-internet era.

One is the so-called reach rule prohibiting a company from controlling commercial TV licences reaching more than 75 per cent of the population.

The other is the two-out-of-three rule, which prevents a proprietor from controlling more than two of three radio, TV and newspapers in an area.

Earlier, Seven Network boss Tim Worner told the committee the planned reforms don’t go far enough and that an urgent cut to licence fees paid by free-to-air TV broadcasters was needed.

This would bring costs into line with the UK and US so local broadcasters could compete with online streaming giants such as Netflix.

“We believe wholistic reform is what’s required in our industry,” Mr Worner told a Senate committee examining the proposed government legislation on Monday.

“This bill on its own doesn’t address that. We wouldn’t even regard it as reform. We would regard it as minor changes.”

-AAP