RTE cap `almost destroyed' ad industry

The cap on RTE's advertising revenue introduced by the minister for communications at the time, Mr Ray Burke, "all but destroyed" the Irish advertising industry, the tribunal has been told.

Mr Colm Molloy, a former sales and marketing director in RTE, said no thought was given to the marketing implications of the cap when the Broadcasting Act was introduced in 1990. E had ever engaged in price fixing, as alleged by Century, the witness Mr Molloy replied: `'When you've nothing else to say, you accuse the opposition of engaging in a price war." In response to Mr Pat Hanratty SC, for the tribunal, Mr Molloy denied RTE ever engaged in price-fixing, predatory pricing or cross-subsidisation of different radio channels. RTE never reduced its prices in response to the arrival of Century.

Mr Molloy said it was "annoying and grossly offensive" for Century's co-founder, Mr James Stafford, to blame RTE for his station's failure.

He said that, although 2FM, for ethical reasons, did not carry alcohol advertisements, Century still "failed to win the alcohol battle" because advertisers were not interested.

Earlier, a former director-general of RTE, Mr Vincent Finn, said Century had tried to put as much onus as possible on RTE for the provision of transmission services while doing as little as possible itself.

The witness said Mr Stafford's notion of something being difficult was for that person to contest any proposition he made. E went to extraordinary lengths to get Century on the air.

Asked about the cap on RTE's advertising, Mr Finn said this had resulted in a reduction in advertising revenue of £10-12 million. When the cap was passed, the station was forced to review its expenditure in every area in an effort to bridge the gap. Mr John Fox, barrister, for Mr Burke, said RTE had said how much it had not been paid by Century. He asked how much Century had actually paid RTE between 1989 and 1991.

The witness said he did not know, but it was nothing near what Century should have paid.

After some legal debate, Mr Justice Flood intervened to say Mr Finn was not the witness to put this question to. It was unfair to bully the witness. The chairman said the tribunal would obtain the figure Mr Fox sought.

Mr Paul O'Higgins SC, for RTE, said a debt of £600,000 to RTE contained in the report of the liquidator of Century had not been contested at the time.

Meanwhile, the co-founder of Century, Mr John Mulhern, is scheduled to give evidence today. Mr Mulhern, who is a son-in-law of Mr Charles Haughey, invested secretly in Century when it was formed in 1988.