asked the Minister for Communications the rate of return on investment which he allows in deciding the acceptable level of charge for cable television; and if the possible sale of Cablelink will alter this practice.
5.
Ceisteanna — Questions. Oral Answers. - Cable Television.
3.
asked the Minister for Communications whether RTE will be under any departmental stricture in the deployment of funds from a successful sale of Cablelink.
6.
asked the Minister for Communications if RTE sought the sanction of his Department for their decision to seek offers for their subsidiary. Cablelink; if, in view of their strategic and economic importance he will request RTE not to proceed with the planned sale of Cablelink, or take steps to ensure that it remains within the public sector; and if he will make a statement on the matter.
I propose to take Questions Nos. 3, 5 and 6 together.
My sanction was not required for the decision by RTE to seek offers for the possible sale of Cablelink Ltd. If RTE and the minority shareholder in this company decide to sell, any new owner of the system will require to be licensed under the Wireless Telegraphy Act. The benefit of the existing licences issued to Cablelink cannot be transferred without my consent.
At this stage I see no useful purpose in interfering with the exercise which is designed to enable the company to make a decision on whether a possible sale is in the best interest of RTE. I am also of the view that it would be premature to comment on the deployment of any funds that might be generated in the future by a possible sale of this company.
The possible sale of Cablelink will not alter the current practice in determining levels of charge for cable service. Each application for a price increase is dealt with on its individual merits. I take a number of factors into account including the interests of subscribers, rate of return on investment, profits, cash flow, projected investment, costs, age of system, company policy and plans, and my policy of encouraging the enhancement of cable systems.
Did any discussions take place between the Minister and RTE in advance of the process being initiated to look at the feasibility of selling off Cablelink? If so, did these discussions include any indications of the shortfall in funds that might be available to RTE in the future with regard to the replacement and improvement of their equipment and the development of the service?
I was informally notified of the intention of RTE to seek offers for the possible sale of Cablelink which is merely a possibility at this stage; they are testing the market rather than coming with specific indications of intention to sell. The want to see what the marketplace will produce. On the question of the deployment of funds, it would be totally premature to comment in regard to any funds that might be generated in the future.
Has a case been made to the Minister by RTE for funding to deal with the replacement of equipment and the development of other new services? In the course of negotiations between RTE and the Minister, did the Minister advise them that they should look to their own stock first and in particular to the possible sale of Cablelink?
That is not correct. In the Estimates published the other day there is capital funding available to RTE for capital projects, including a new library for RTE.
But not anything like what they need.
There is never enough for what anybody needs, particularly an organisation with so many changes in technology. However, within the limits of the finances available to the State we have given an allocation to RTE which will be sufficient to meet their legitimate requirements in 1989, and every year is considered on its merits.
The Minister did not mention the rate of return on investment he allows. Perhaps he would tell us. I ask that because there is concern about the already high prices for the service that is being provided by Cablelink which has a monopoly in the Dublin area. Can the Minister give us some indication of the rate of return, and assurances that if Cablelink were in private hands the consumer would be protected from unfair charges? Will the Minister reflect on whether it is premature to comment on the deployment of resources since the only reason RTE want to sell Cablelink is so that they would be free to invest and improve? For many years RTE have been unhappy with the sanction they have got from the Minister's Department for the spending of their own resources. It is far from premature to comment.
That is a rather long question.
Perhaps the Minister would reply to it?
The Deputy seems to be slightly confused. At the end of his question he says that Cablelink are unhappy about the sanction I give them for the spending of their own resources, but at the beginning of the question he is decrying the fact that the Cablelink charges are so high in the Dublin area. If Cablelink and RTE as the 80 per cent shareholders had their way, the Cablelink subscription would be far higher in the Dublin region. It is because I have been constantly monitoring it that it is at the level it is at. It is about half what the Cork community are asked to pay.
It has less than half the stations.
The Deputy can be assured that the first priority is the interest of subscribers in relation to the subscriptions for cable services. In regard to the specific rate of return on investment, I have not got that information.
Question No. 3 was very specific. It asked for the rate of return and it is not good enough for the Minister to come in here and say that he has not got that information with him. It is only right that the public should know what return on capital is obtained by this monopoly company in State ownership and if it will affect that return if it subsequently goes into private hands. I ask the Minister to come back to this House as soon as possible with that information.
If it is a rip-off the Minister should say so.
Deputy Bruton can be assured that the question of the sale will be monitored very carefully by me.
That is not the question.
The contributions from the Deputy from Clare are at the level I would expect from him.
The Minister is evading the question.
Can the Minister tell us whether he considers there is any conflict of interests, given the fact that RTE, the State broadcasting service, control 80 per cent of the shareholding in Cablelink? Cablelink distribute the signals of RTE's competitors. I would like him to comment on whether he considers there is any conflict of interests. Can he also tell us whether he thinks it would be better if Cablelink were kept separate from RTE on the basis that they would then be able to compete with the State broadcasting service in terms of having their own advertising and buying their own programme material? While I accept that the proposal only amounts to a testing of the market at this point I think that if the right price is achieved it should be sold. Can the Minister tell me whether he agrees with me on that and that that should be the only consideration?
I do not think there is a conflict of interest. RTE have done an excellent job in providing this service around the greater Dublin area, the Waterford area and in the Galway area since they moved in there. However, it would be for RTE and the minority shareholder to decide——
It is unique.
It is but I do not see it as a conflict. As to whether I would agree that RTE should sell if the price is right that would depend on what one would call the right price. I have my own views as to what the full potential of the service is, it is not merely a matter of carrying television services. Surely, there would also be the possibility of carrying other communications and networks for home shopping and perhaps Bord Telecom and others. Therefore, it is a question of testing the market. If the right price comes up it would be for RTE to decide but the Deputy can be assured that I will be monitoring the position.
A Cheann Comhairle——
Perhaps a brief question, Deputy, as I am anxious to deal with other questions. I am also anxious to facilitate Deputy Carey.
In view of the fact that ultimately the Minister's consent is necessary and of the uncertainty now being created with regard to the future funding of RTE, would the Minister have this question resolved without delay? Can he give the House any indication of when he thinks the question will be resolved? Will he also give an assurance that he will have due regard to the views of the workers in RTE who are solidly opposed to any sale or privatisation of Cablelink?
I refute totally the allegation the Deputy has now made for a second time in relation to the future funding of RTE. The Government are making capital available to RTE——
Let me clarify what I said. What I was referring to was the lack of income that would be available to RTE should Cablelink be sold.
That is totally different to what the Deputy said the first time.
That is why I clarified it.
As regards the income surely that is a matter that RTE will make a judgment on having regard to the price being offered for it and whether that will compensate for the level of income at present coming in. These are all matters which should be taken into consideration.
The Minister has a function in all of this.
I have been keeping and I will be keeping a very close eye on the position. I hope the offer which will come in will more than compensate for the profits which are being generated at present through the very limited use of the technology of Cablelink in so many homes in the greater Dublin, Waterford and Galway areas. In so far as the interests of the workers in RTE are concerned, I am very conscious of the views expressed by them. I have received an indication that they are interested in sending a deputation to me to discuss the matter and I would be more than willing to sit down and discuss it with the members of the staff there at any time or with the Congress of Trade Unions at any time. Until we know whether a substantial offer has been made it would be slightly premature to indicate whether a decision is going to be made. If and when a substantial offer is made I will be happy to sit down with anybody to discuss the matter with them.
Given that the Minister has taken exception to my disappointment at his not answering my interruptions may I ask him in view of what he said as regards the profitability of the company if it is true that Cablelink take 25 per cent of the turnover as profit? Can he give us an indication as to whether he approves of this figure?
My policy is not to answer interruptions as they were described by the Deputy himself but in so far as the operations of Cablelink are concerned I am keeping the matter under review at present and I am waiting to see what interest will be revealed resulting from the indication from RTE and their minority shareholder that they are prepared to consider offers for the company but all matters will be kept under consideration before reaching a final decision.
A Cheann Comhairle, have you no power in regard to the Minister's refusal to answer these questions?
That is not a matter for the Chair. Question No. 4.
The people in north Dublin should be told about this if consumers are being ripped off.
Deputy Carey should restrain himself.
A mind boggling thought.
They are well looked after by all accounts.