MEETING WITH SEAN DONLON AND MIKE BURNS
Wednesday, 4 September
1996
Present:
Liam P Healy Brendan MA Hopkins
1. Donlon said the Carrigaline situation was a "four seat problem - 2 in Cork and 2 elsewhere". He said it must be understood that all items were being looked at on this basis in an election year.
2. The time scale for the Carrigaline decision in the Department was by the end of the year. He said it was highly likely that if the Minister refused the licence application then Carrigaline would appeal.
In these circumstances he believed the legal view (since confirmed) would be that the pirates would be allowed to remain on the air whilst the Supreme Court heard their appeal.
It is likely that this appeal will take 2 years to come to court.
3. Donlon asked if a Commercial solution could be brokered (sic) by the Government? He asked if PHL [Princes Holdings Limited] could take over subscribers at the £30 current level and increase them over time, it may be possible to persuade the pirates to stop. This could be `sweetened' for INP -Independent Newspapers Plc through the extension of the present advertising licences.
We said that the cost of installing 20,000 illegal subscribers would be £250 each, i.e. £5m and in addition the lost revenues would amount to a further £3m in the first year. These numbers are much greater than any benefit from local advertising revenues.
In addition we said:
(i) It would be impossible to conceive of a situation where one address on the same road was paying £30 p.a. and the other was paying £180 p.a. It would make a mockery of PHL's charging and would undermine all business in Cork.
(ii) As a PHL board we have consistently looked to the Government to provide the impetus to police our exclusive licence. By negotiating with the pirates we would be breaking faith with our previous resolution.
(iii) `Dealing' with Carrigaline will only encourage other pirates to continue to operate and expect to be similarly accommodated.
4. Donlon asked what else we might be offered to help us settle?:
(i) Extension to the current licence.
Donlon said the Government were in no position to extend the present 10 year exclusive licence. We put the argument of the non exclusivity, however Donlon said this would be an EU matter and was not within the remit of the present Government.
(ii) Granting of telephony licences
Donlon said this was not on the table until 1 January 2000. He said there would be no cutting of the time-scale as the recent investment by KPN had been predicated on the 1111 2000 time-scale.
(iii) Disposal to PHL of Cablelink
He said this was likely to be over a similar time-scale to telephony, however he would raise this question with the relevant Department on his return.
5. We said we were thoroughly disappointed with what seemed to be on offer and said we would have great difficulty presenting the outcome of today's meeting to our fellow shareholders. We stressed that their tendency would be to take action against the Government to recover damages over their failure to police the exclusivity of the licence.
We said that large numbers might be at stake and that this surely would not be good for the Government in an election year.
Donlon said any case would not come to Court before the Election (next November likely) and this would at least solve their Cork problem and ensure the four seats were safe.
We said that would lose INP as friends and would mean any future administration would have a large bill to pay.
THE MEETING ENDED