Government approves MTS-Sky deal

By RUTH BERRY political reporter

In an about-turn the Government has approved a last-minute bid by the Maori Television Service to go to air on a Sky channel.

It had looked poised to reject the deal, which will save MTS several million dollars, creating the potential for another stoush between the two.

It is still not clear why the Government has changed its mind, though sources suggest the tension over the foreshore and seabed issue may have made it wary of becoming entrenched in another battle with Maori.

After intensive lobbying by Maori Affairs Minister Parekura Horomia, the Cabinet on Monday approved the Sky deal in principle, subject to ironing out several outstanding issues.

It is hoped those will be thrashed out at a meeting between Government officials, Sky and MTS in Auckland today. If the deal is stitched up, it will clear the key hurdle for MTS going on air.

An MTS spokeswoman confirmed yesterday the "in principle" decision and said the service still hoped to be operating by the end of the year.

MTS was to go on air on a Broadcast Communications Ltd transmission platform as part of an agreement reached between it and the Government early this year.

This arrangement would have required Sky to vacate the four frequencies reserved for Maori television back in 1989, which it has been squatting on.

Alarmed at the multi-million dollar cost of retuning its 120,000 customers' decoders, and warning that Play Station users and viewers whose televisions were tuned in through video recorders would also face interference problems, Sky tried to dissuade the Government against the BCL plan. Finally it offered MTS one of its five UHF channels.

As well as saving MTS money, the Sky deal will enable the service to begin transmitting as soon as it is ready. Under the BCL deal, MTS would have had to order in transmitters from overseas, then erect them, which takes about six months.

Broadcasting Minister Steve Maharey and Finance Minister Michael Cullen were opposed to the Sky deal because they wanted MTS kept within the public broadcasting family, but it is understood they were also annoyed MTS wanted to change the original platform agreement months after it had been signed.

Though sources have previously said BCL was unwilling to lose MTS, a Beehive source yesterday suggested the transmission company was now happy to wash its hands of the matter, tired of months of wrangling.

The financial benefits to BCL of MTS using its transmission platform were only minor, the source said.

Several weeks ago Dr Cullen's office suggested that an operational funding increase, approved at the same time as the BCL agreement, prevented MTS from simply signing up with Sky.

Sky is believed to have offered its CNN channel to MTS, which would upset those of its customers only connected to its UHF services. Customers using its digital service would still be able to access CNN.

Sky spokesman Tony O'Brien yesterday refused to say which channel was up for negotiation, saying once final decisions were reached its customers would be the first to know.

BCL also refused to comment yesterday.