Dáil debates

Wednesday, 15 June 2005

Priority Questions.

Company Takeovers.

1:00 pm

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Question 2: To ask the Minister for Communications, Marine and Natural Resources his views on the proposed takeover of a company (details supplied); his further views on competition in broadcasting here resulting from the fact that the Irish cable platform may be controlled by the main satellite platform; and if he will make a statement on the matter. [20109/05]

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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I have no function in this matter, as the companies mentioned by the Deputy are private companies. In my capacity as Minister for Communications, Marine and Natural Resources I have no role inapproving the ownership of companies that provide broadcasting services to the public on a subscription basis nor do I license such companies.

I have made clear in the past that I am of the opinion that Irish viewers will be best served by a broadcasting environment that includes a strong public service broadcasting presence in the form of RTE and an independent TG4, together with private broadcasters. As the uptake of digital television services continues to grow, Irish broadcasters will face increased competition from trans-frontier broadcasters. I expect that Irish broadcasters will continue to seek to reach Irish audiences through a variety of platforms. Currently Irish broadcasters reach their audiences through a combination of platforms including terrestrial, cable, MMDS and satellite. Technological advances are likely to present broadcasters with new opportunities for reaching their audiences and it is to be expected that Irish broadcasters will avail of such opportunities across all available platforms.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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In the history of communications in the State we have got at least two major decisions wrong. Some 20 years ago we allowed the cable network to be acquired by RTE and Telecom Éireann, which effectively meant the cable platform was taken over between two other platforms. The kind of developments that took place in Belgium, France and many other countries even including the United States became impossible. Is this not a matter about which the Minister should be concerned?

Is it in the public interest that the same individual, namely John Malone of Liberty Global, should be in a position to acquire control over the entire cable platform in Ireland while at the same time being the most significant shareholder, after the Murdoch family, in News Corporation, the entity that controls BskyB.

Séamus Pattison (Carlow-Kilkenny, Labour)
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It is not appropriate to name people in the House.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Media correspondents in The Irish Times and Irish Independent and others have covered this matter. As the Minister knows this individual is known as the "cable cowboy". In reality this cable cowboy will control the entire cable platform. The Minister made a fair point in saying we would have a united cable platform. However, in addition he is the second largest shareholder in BskyB in the satellite platform. Does this not therefore allow for a repetition of the mistake made by the Minister's predecessor 20 years ago and the mistake made by another Minister a few years ago with the sale of Eircom?

I have also asked questions of the Minister for Enterprise, Trade and Employment on this point. Is it not the responsibility of the Minister for Communications, Marine and Natural Resources to ask the Minister for Enterprise, Trade and Employment to initiate a Competition Authority investigation? Is it not true, as we have been informed by the media, that an elaborate financial warehousing operation was mounted by John Malone of Liberty Global whereby Morgan Stanley appears to take over NTL to preclude an investigation by the Competition Authority? Is this not a very serious matter affecting competition in our telecommunications industry? In Austria Liberty Global is operating a triple play. We have a television network, pay television, a phone roll out and a broadband roll out. Is it not important to ensure that both platforms be kept distinct?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The Deputy has raised many questions and issues that are not of direct relevance to the question he tabled and not of direct relevance to my role as Minister for Communications, Marine and Natural Resources. As he has pointed out this issue may possibly be one for the Competition Authority. As the Deputy knows the Competition Authority is independent and has undertaken many investigations into matters of competition in a variety of areas without any prompt or direction from the Minister, which is as it should be.

Any competition concerns raised are unlikely to focus on the competition between broadcasters and rather on the impact on consumers who purchase pay television packages. It is difficult to see how platform ownership issues could impact negatively on broadcasters, which is the area for which I have responsibility. There may be an exception in one area. If the owners of a platform were to act in a discriminatory manner by refusing to carry certain companies' broadcasts, those broadcasters could seek a remedy through competition law. However, that is a matter for the Competition Authority.

When Cablelink, which became NTL, was in State ownership it had a record of non-investment before being sold. Having such an entity in public ownership or ownership other than private ownership does not automatically ensure that investment will take place or that it will benefit the consumer.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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The Minister is in office at a critical moment in the history of Irish telecommunications. While it may not become apparent for many years to come, would it not be very serious for us if, in effect, the entire cable platform and satellite platform had the broadcasting market cornered as we move into the era of digital television? I am still awaiting answers from the Minister for Enterprise, Trade and Employment. I again ask the Minister for Communications, Marine and Natural Resources to ask the Minister for Enterprise, Trade and Employment under sections 16 and 23 of the Competition Act 2002 to investigate the manner in which this transaction has taken place, focusing on the financial warehousing operated by Liberty Global and Morgan Stanley on behalf of the famous cable cowboy, John Malone. It should also investigate whether this is a constraint on media competition under the terms of section 23. When asked what shaped his political strategy, Harold McMillan answered, "Events, dear boy, events." Events in this case could mean that a large part of our broadcasting, cable, broadband and phone network is being taken over by a single company representing a major economic force. The Minister for Communications, Marine and Natural Resources is the man on the bridge and has responsibility. He should ask the Competition Authority to investigate. The Minister should also investigate the consequence of this for our telecommunications market.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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I do not want to repeat what I have said before. The Deputy has raised a number of concerns. I have indicated where the responsibility for those lies. I will undertake to bring the Deputy's concerns to the attention of the Minister for Enterprise, Trade and Employment. I will refer him to the matters raised here.