KEY POINTS:
Free-to-air broadcasters are suggesting radical new controls of Sky Television but it is more likely that TVNZ will be reined in, industry sources say.
Suggestions put forward to the Ministry for Culture and Heritage review of broadcasting regulations include splitting up Sky in an operational separation similar to that forced on Telecom.
But Sky investors should not be concerned the review will slow growth for the pay television monopoly that is now in 47 per cent of homes.
Beyond the unlikely introduction of an independent and powerful regulatory body for broadcasting, one well-placed player described the prospects of controls as "zilch".
But both Labour and National are planning to take away TVNZ control of charter funding of $15.1 million.
Broadcasting Minister Trevor Mallard - who has been furious at TVNZ's virtual free rein in the use of charter funds - is expected to announce a new policy where TVNZ has to apply to New Zealand On Air for individual projects.
It is understood the money would be for TVNZ exclusively but NZ On Air would approve projects.
The National Party broadcasting spokesman Jonathan Coleman is expected to hand the money to NZ On Air but also to make it contestable and available to MediaWorks, TV3, C4 and Sky-owned Prime TV.
The process would effectively kill off Labour's attempts to present TVNZ as a public service broadcaster.
But Sky, in its broadcasting policies review submissions, has suggested taking the break-up of the charter even further.
"Sky believes that New Zealand On Air funding should be available for pay television in the same way as free-to-air channels," the company says.
Sky pay channels for children, Nickelodeon and Disney, have already had early talks with New Zealand On Air about that possibility.
NZ On Air raised the idea with programme-makers at a recent conference with Spada.
State subsidies for pay TV would be a blow for free-to-air TV or lead to increased calls for more taxpayer subsidies.
The production industry would welcome extended subsidies.
