RTE `under pressure' to reduce charges

RTE felt "under pressure" to reduce its charges to Century Radio after the minister for communications, Mr Burke, told senior staff to do so, the tribunal has heard.

Station executives didn't argue with Mr Burke's demand for RTE to reduce its fees because "at the end of the day, the minister has the trump card", RTE's finance director, Mr Gerry O'Brien, told the tribunal.

"RTE is that sort of organisation: if the Minister wants something down, the minister gets something down. Our policy was to accommodate what was being put forward," he said.

Mr Burke made his demand that RTE reduce the fee of almost £1 million it proposed to charge for carrying the signal of the new national commercial station at a meeting on January 5th, 1989. This was two weeks before applicants for the franchise made their oral presentations to the IRTC and three weeks before Century was announced as the winner of the new licence.

Mr O'Brien said it was clear to him that the discussion at this meeting referred to Century.

The minister said there was a "problem" with RTE's proposed charge and he wanted it reduced. No figures were mentioned, and no new arguments were advanced that RTE had not heard in earlier discussions with Century, the witness said.

Asked by Mr Justice Flood if anybody from RTE actually asked what the minister wanted, Mr O'Brien said "no one bit that bullet".

As a semi-state body, RTE felt obliged to get the price down.

It was always willing to "accommodate" public policy.

Mr Justice Flood asked if anybody argued the issue with the minister.

The witness replied that RTE was "the sort of organisation that doesn't do that".

Was it not manifest that the minister would have to pay the bill himself if RTE lost money on the deal, the chairman asked.

Mr O'Brien replied that RTE would have to sustain the cost itself.

"If we were to give it away - as we had to do, virtually - we'd have to bear the cost ourselves." Money allocated to programming would have to be used to fund the loss.

He pointed out that RTE was a semi-state organisation, answerable to the political system. "The last thing we want to do is make enemies in that quarter."

Political sanction was required for an increase in the licence fee, and for other changes.

RTE wanted to keep "an even diplomatic keel" in such areas of policy. The only other option would be "to go to war".

On January 11th, 1989, RTE executives met officials in Mr Burke's department and a new charge of £692,000 was agreed.

"As far as I was concerned, the negotiations for the national franchise were finished and agreed," Mr O'Brien commented.

On January 23rd, five days after Century was awarded the licence, RTE called a meeting with Century's founders, Mr James Stafford and Mr Oliver Barry.

The two sides discussed the start-up date for the new station, but there was no mention of the proposed charges. "I assumed they were written in stone," Mr O'Brien said.

However, in early February the IRTC wrote to the minister regarding the charges, which Century claimed were too high.

Mr O'Brien said he was amazed at this development; he described Mr Stafford's version of the costs payable as "a distortion of the facts" and "totally misleading".

In March Mr Burke issued a directive further reducing the charges to under £400,000.