asked the Minister for Communications the discussions he has had with the RTÉ Authority regarding the possible sale by RTÉ of Cablelink; if a decsion has yet been made in this regard; and if he will make a statement on the matter.
48.
Ceisteanna—Questions. Oral Answers. - Sale by RTÉ of Cablelink.
3.
asked the Minister for Communications if he will confirm that, before the RTÉ Authority embarked on a course to seek potential purchasers of their shares in Cablelink Limited, they sought and received from him his assurance that he had no objection to their seeking private purchasers from inside or outside the country and that assurance was passed on to all the applicants on which basis the said applicants entered into major expenses in preparing their valuation and submission for the purchase of Cablelink; if he will stand by the assurance he gave in advance; if not, the reason for his change of mind; and if he will make a statement on the matter.
I propose to take Questions Nos. 3 and 48 together.
I would refer the Deputies to my earlier replies to questions on this matter — columns 412 to 419, Volume 383 of the Official Debates of 20 October 1988, columns 2402 and 2447, Volume 387 of 7 March 1989 and columns 1061 to 1064, Volume 389 of 3 May 1989 refer.
I met the Authority to discuss this matter on 19 July 1989 and I have been informed of a decision by the Authority to sell 50 per cent of their shareholding in Cablelink.
I have nothing further to add.
I would remind the Minister that I was not a Member of the House on 20 October, but I am grateful to him for pushing at the Cabinet table to give me the break that caused me to be here. What did he say on 20 October 1988? Does he agree that it is in the strategic interest of RTÉ that Cablelink be maintained in its present ownership? Is he still of the view that if that does not prove feasible, because of the anxiety of the cabal on the board of the RTE authority to dispose of at least a part of their shareholding in Cablelink, it would be disposed of to Telecom?
In the various questions which I answered in the past I indicated in the House that my concern in relation to this matter was the interest of subscribers to Cablelink in relation to cost and the quality of the service they received. I also indicated my concern about the taxpayer and his investment in Telecom. I should like to quote from the Official Report of 3 May 1989, column 1064, when in response to a supplementary question I said:
My main concern in relation to the sale of Cablelink is to protect the very extensive investment by the taxpayers in Telecom Éireann. I want to ensure that, if it is decided to sell Cablelink, whoever secures that company will not be in a position to establish an alternate communications network. I want to ensure that they would not be in a position to carriage phone sevices and so on, which an upgrading of Cablelink would allow, but rather to carriage television sevices. I am determined to ensure that no damage will be done to Telecom and that has been my main guiding principle.
In relation to the question of the strategic position of RTÉ and the 80 per cent shareholding that RTÉ have in Cablelink, I have been informed by the Authority that they have decided to sell 50 per cent of their shareholding in Cablelink and have, under the terms of the shareholders' agreement with their partner, offered the shares to Allied Combined Trust.
I am aware that this decision was made by the RTÉ Authority last Friday and I accept what the Minister says. Is he concerned that the chairman of the Authority that made the decision is also a director of AIB of which ACT is a subsidiary? Is he concerned that the disposition apparently is to sell to an American company, PACTEL, which, as well as being a cable company, is a telephone company? Therefore, in the event of their being successful, they will provide direct competition for Telecom if the sale is sanctioned. Does the Minister stand behind the sensible policy he has already articulated and which I agree——
The Deputy is introducing new matter to this question.
No, I am not.
That is my decision.
I accept that. Does the Minister stand by his earlier view that in the event of not being able to retain Cablelink in its present ownership it is desirable, in the national interest, that the sale of the shares——
I understand the Deputy's supplementary.
I beg your pardon.
As I indicated, my concern in this matter was, in relation to the interests of the subscribers to Cablelink, the taxpayers who have invested so heavily in Telecom and the general interests of RTE's development. I note what the Deputy said in relation to PACTEL and their background regarding their telephone services. It is interesting to note that in Europe one set of circumstances pertains but in the US — the home of PACTEL — another legal situation arises. For example section 3 (10) of the Federal Communications Act, 1934, provides that no broadcast, common carrier aeronautical en route or aeronautical fixed radio station licence shall be granted to any alien or the representative of any alien, any corporation organised under the laws of any foreign Government, any corporation of which any officer or director is an alien or where more than 20 per cent of the shares are owned by aliens or their representatives or by corporations organised under the laws of any foreign Government. This also applies to any corporation controlled by any other corporation of which any officer or more than 25 per cent of the directors are aliens, of which more than 25 per cent of the shares are owned by aliens, their representatives or by corporations organised under the laws of foreign Governments if the FCC find that the public interest will be served by the refusal or revocation of such licence.
The foregoing provisions do not at present apply to cable systems directly. However, if cable systems in the US receive signals via microwave networks, such networks cannot be owned by persons embraced by section 3 (10). In June 1989 a Bill was introduced in the US Congress entitled Cable (Foreign Ownership) Act, 1989, which seeks to amend section 3 (10) of the Federal Communications Act to apply its provisions in respect of the issue of licences for cable television systems.
Is this a Second Stage speech?
The Deputy will see the situation that prevails in the US.
I understand the situation pertaining in the United States. Does the Minister still retain his disposition that, in the event of the shares in this company being sold, they ought to be disposed of to Bord Telecom?
I have already outlined my position in relation to this matter. At this stage I am reluctant to go any further in relation to this debate because there has been a series of indications in writing of legal action being taken regarding PACTEL.
Will the Minister clarify whether the decision by RTE requires his approval and, if so, whether he has given it?
The approval of the Minister for Communications relates to the cable licence and for the licence to operate a cable system. It does not involve the sale of the shares, it operates in relation to a sanction by the Minister for Communications of the licence for the cable system.
We must have finality on this question.
If the decision now reached by RTE receives the Minister's approval, will that have any implictions for the capital allocation and the commitment of the Government to RTÉ in future?
I fail to see how the Deputy can think that the decision of RTÉ has been taken with my approval. The RTÉ Authority made the decision themselves in relation to selling 50 per cent of their shareholding in Cablelink. As far as their general funding is concerned, the RTÉ Authority have been operating very effectively and I am glad to see that they are proceeding with the construction of a £2.5 million library and two sound stages from their own resources. Indeed I had the pleasure of turning the sod——
I said I wanted to bring this question to finality. Two Deputies are on their feet and I will hear them if they will be brief.
This is a priority question.
I am aware of the fact that one of these questions is a priority, one in the name of another Deputy. I will now call on Deputy Rabbitte and I will allow Deputy Richard Bruton a final supplementary.
I want to ask a question regarding the Minister's remark about RTÉ's viability and management of its own resources. Is it not the case that in the event of its 50 per cent shareholding being disposed of to this American company, implicit in it is a commitment to investment of the order of £13 million by RTÉ?
That is a separate question regarding which I would need notice.
Is it not the case that it was the Minister's failure to spell out the parameters under which approval would be given when RTÉ looked for people to purchase which has led to the present confusion as to the future of Cablelink? He has undermined the approach attempted by RTÉ. The Minister's failure at the outset——
The Deputy is making a speech.
I do not accept that assertion under any circumstances. At all times there was a clear indiction given to the interest of An Bord Telecom. The need to preserve taxpayers' investment in An Bord Telecom has been made quite clear to everybody I spoken to in relation to this matter. The decision of RTÉ was merely to test the market in relation to the sale of Cablelink.