Mr James Stafford, former Century director, told the Flood tribunal yesterday he sought help from the minister for communications, Mr Ray Burke, in December 1989 because RTE was abusing its position in the broadcasting market and causing Century Radio financial difficulties.
Mr Stafford said Century Radio was in serious financial difficulties by the end of 1989 as it had expected to generate £2 million revenue by that time but brought in only £811,000.
This, he said, was because while Century had expected to get between 63 and 70 per cent coverage throughout the State for its radio service, it was only reaching 35 per cent of the population. Century Radio found out about the low level of coverage because RTE personnel had told advertisers Century only had 35 per cent coverage, Mr Stafford said.
Mr Stafford said RTE was bound by contract to provide equal coverage to Century but had not done so.
"We saw the problem as being the unlevel playing pitch RTE had," Mr Stafford said.
Mr Stafford claimed RTE was using its licence fee to subsidise 2FM and was selling advertising at 37 per cent of the cost, thus making it difficult to compete with.
Asked by Mr Pat Hanratty SC, for the tribunal, if RTE was just being competitive, he replied: "There is a difference between competition and using your dominant position to destroy your opposition." Because of the financial difficulties created by this situation, Mr Stafford said both he and Mr Oliver Barry had two meetings with Mr Burke on December 19th 1989 and told him Century would close down if RTE's abuse of its dominant position was not addressed. "We told the minister the situation was extremely serious. We were losing money . . . we would have to close unless we got a guarantee of a level playing pitch."
Mr Burke then held a meeting with Century's bank manager at Bank of Ireland, Mr Paddy O'Donoghue, and Mr Barry and Mr Stafford on December 22nd and the minutes of the meeting show that the minister "confirmed commitment" to Century's bank manager.
During the meeting the matter was raised "to eliminate RTE's `excesses' in recent months" and this was to be done by ministerial order or by legislation.
Mr Hanratty asked if Mr Stafford considered it unusual a Government minister would attend a meeting with a private company and its bank manager. "Century was not any private company. It was a company that had a new national radio licence."
Another meeting took place on January 2nd 1990 between the minister and "someone very senior" in the Bank of Ireland. Mr Stafford said he was told by the bank the meeting took place but did not know who attended.
Mr Stafford was asked if he had sought to take legal action against RTE for breaking its contract to provide equal coverage to Century. He replied he had wanted to get a court injunction to force RTE to fulfil the terms of the contract, but the board of Century Radio decided not to.
Mr Hanratty said RTE would tell the tribunal it had difficulty in getting an agreement from Century Radio on what equipment it wanted and this may have delayed reaching the agreed amount of coverage. Mr Stafford said RTE was in flagrant breach of the contract in not providing equal coverage to Century.
Mr Hanratty said the contract did not specify that RTE had an obligation to provide equal treatment but should do so "as far as is practicable". "I believed there was a strong obligation," Mr Stafford replied.