IRTC's role in backing Century on fees still unclear

IRTC members who awarded the national radio licence to Century Radio in 1989 have been emphatic in their evidence in insisting…

IRTC members who awarded the national radio licence to Century Radio in 1989 have been emphatic in their evidence in insisting there was no political interference in their decision. They also largely supported Century's arguments in its row with RTE over transmission fees.

The problem, however, is that it remains unclear on what basis the IRTC backed Century. Mystery still surrounds the decision process and the commission's subsequent interventions with Mr Burke on behalf of the fledgling station. Next week's appearance at the tribunal of the then chairman, Mr Justice Seamus Henchy, and the then secretary, Mr Sean Connolly, will hopefully throw more light on this.

Consider the sequence of events. The closing date for applications for the licence was December 16th, 1988. Financial viability was always going to be a key criterion in deciding the winner, so it was strongly in Century's favour that its projected expenditure on transmission services was far lower than the estimates submitted by its rivals.

However, Century said it would not be viable if it had to pay RTE more than £375,000 for transmission services. In other words, it would not pay more than this amount.

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Separately, RTE and Mr Burke's officials in the Department of Communications entered into talks on the issue. On January 11th, 1989, a fee of £692,000 was agreed. It is unclear whether this information was relayed immediately to the IRTC.

But where did this leave Century? Should it have been ruled out of the race because it wasn't prepared to pay more than £375,000?

Logically, one would expect that Century would be asked about the matter at the oral presentations which took place the following day, January 12th.

However, Century wasn't asked this important question. Indeed, the evidence suggests the station's promoters got an indication in advance that the matter wouldn't be raised. It seems a question was drafted but it was never posed. Century, which had no breakdown or background for its £375,000 proposal, never had to face this potentially embarrassing scrutiny.

On the following day, January 13th, Century's co-founders, Mr Oliver Barry and Mr James Stafford, were called into a meeting with the chairman of the IRTC, Mr Justice Henchy, and the secretary, Mr Connolly. The evidence suggests Mr Barry and Mr Stafford came away with the understanding that they had won the franchise. They immediately told their technical adviser they had been asked to come up with a breakdown to "challenge" RTE's proposed charge.

However, at this stage no decision had been announced to give the licence to Century. The majority of the 10-member commission was veering towards Century but at least one member has stated that no decision was taken until a meeting on January 18th, five days after Mr Henchy and Mr Connolly met Century.

It doesn't appear Mr Henchy and Mr Connolly met any other applicants after the oral hearings. None of the IRTC members who have given evidence left the presentation with the impression that there were matters outstanding or that clarification was being sought from Century. Other members of the IRTC secretariat have said they were unaware the meeting between their bosses and Century was taking place.

The IRTC had no calculations of its own on the transmission fee and no independent financial advice. So on what basis was it taking on board the figures submitted by one applicant - which differed significantly from other applicants - and proposing to "challenge" RTE's figures when these had the agreement of the Department of Communications?

After Century was awarded the licence, the IRTC effectively adopted the £375,000 figure and pressed the Minister to direct RTE to reduce its fee. But, as Mr Justice Flood pertinently asked yesterday, surely the commission must have had a factual basis for this figure before asking the Minister to intervene.