Part of a weaker RTE for sale soon

When Margaret Thatcher broke up the public sector of the British economy in the 1980s and flogged off its assets, she did so with a clear electoral mandate. Disastrous as many of the results may have been, the people who voted for them knew what they were getting.

We do things differently here. Fianna Fail has never sought a mandate to smash the public sector. It never promised to pursue privatisation as a coherent strategy. On the contrary, its mood music on the public sector has been soothing. Trust us, it says, sure didn't we set up these companies in the first place?

Yet for all that, the Government has been selling off the family silver with all the incoherent abandon of an idiot heir with a big cocaine habit to feed.

By the time it reaches the end of its natural life, it will be able to look back on a trail of destruction. The State telecommunications company broken up and sold off. Aer Lingus about to be knocked down in a trade sale. Coillte's guardianship of a crucial part of the environment compromised by the policy of fattening the company up for privatisation. There is bizarre talk of privatising the railways and the post office.

To that list can now be added RTE. The public broadcaster is not about to be sold off: it is to be allowed to dwindle into a weak, tame presence which does not threaten the delivery of the Irish television market into the hands of commercial interests. That is the significance of last week's paltry increase in the licence fee and of last weekend's attempt by Sile de Valera to bully RTE into keeping quiet about it.

THE real agenda will not be stated, of course. Remember that in selling off Eircom, Mary O'Rourke never told us that this crucial public asset was being handed over to Vodafone, George Soros and Sir Anthony O'Reilly. Yet, in an astonishingly short time, that is what we've got.

Similarly with RTE, we will be assured that the aim of Government policy is to produce a lean, mean public service broadcaster. If you believe that, you probably also borrowed money to buy Eircom shares.

To get a sense of what's going on, you have to rewind almost three years to the introduction of the Broadcasting Bill by Ms de Valera. The context for the Bill was the need to prepare for the arrival of digital television.

A new company, Digico, was to be established to upgrade the broadcasting technology and sell the digital services. It would take over RTE's transmission network, but RTE would get 40 per cent of the shares. This seemed a fairly reasonable compromise.

The Dail passed the Second Stage of the Bill on this basis. Suddenly, however, Ms de Valera announced that she was inclined to force RTE to sell off its entire transmission network. Instead of having 40 per cent of Digico, it would have zero per cent.

Here was the real agenda: the complete privatisation of the network, with RTE becoming a paying tenant in a system owned by private investors. And those investors would get the assets cheaply. The Government valued them at less than half of what RTE thought they were worth.

All of this was rather too stark and crude, and Ms de Valera pulled back a bit. In the final version of the Act, Digico is replaced by two companies, one to control the transmission network, the other to sell the digital services. RTE will have 28 per cent of the first company, but no share in the second.

In the Committee Stage of the Broadcasting Bill, Ms de Valera could not say where the 28 per cent figure came from. She also seemed not to know whether the sale of the transmission network included the sale of a key national asset: the frequency on which RTE broadcasts.

LAST week's events are, in this context, rather more transparent. By awarding a minimal licence-fee increase, the Minister has knowingly forced RTE to operate at a loss. This ensures that RTE has no option but to sell off its transmission network quickly and from a very weak position.

The disposal of an important public asset has become a fire sale. Someone is going to pick up a bargain.

Who might that someone be? One possible bidder is NTL, which bought Cablelink. However, one company which expressed an interest last year is Chorus, the new media company that is part-owned by Independent Newspapers.

When asked about the size of the stake it wanted to buy, Chorus replied: "We'd need to see the terms on which it becomes available." One of those terms, of course, is the kind of restriction on cross-media ownership which would preclude a print media magnate such as Sir Anthony O'Reilly from owning too big a stake in the broadcast media.

On that score, happily, Chorus doesn't have to worry. Rejecting amendments to the Broadcasting Bill which would have imposed such limits, Ms de Valera said Mary Harney would deal with the issue in forthcoming legislation. After last week's events, however, the likelihood is that RTE will have to complete the sale long before this legislation sees the light of day.

fotoole@irish-times.ie