New battle for MTS and Government

By RUTH BERRY

The Government's plan to reject a proposal for the Maori Television Service (MTS) to go to air on a Sky channel may embroil ministers in a new battle with the broadcasters.

It creates the potential for more on-air delays for the embattled television service and a multimillion-dollar headache for Sky.

Sky would be forced to retune customers' decoders as a result of the decision - a major logistical exercise - which is why it was prepared to sacrifice a channel for MTS.

A Cabinet committee gave the proposal - which MTS believes would save it several million dollars and enable it to simply flick a switch to go on air - the thumbs-down on Wednesday.

Yesterday, sources said the Cabinet was expected to formally reject the deal on Monday.

The Government decided early this year that MTS would go to air using a combination of the UHF transmission platform of Broadcast Communications Ltd (BCL) and Sky's digital service.

MTS had been engaged in a lengthy campaign pushing for a transmission deal with CanWest instead - which required Government approval because it involved a frequency swap.

The Government gave MTS an annual operational funding increase at the same time, which MTS had also been involved in a long battle over.

MTS put the new proposal to the Government several weeks ago.

The then MTS chief executive, Derek Fox, refused to disclose details of the deal at that time and would not say whether MTS needed the Government's approval to proceed, saying only that it wanted the support of its stakeholders.

The Herald understands MTS has a legal opinion that it does not need Government approval.

Finance Minister Michael Cullen, in charge of MTS with Maori Affairs Minister Parekura Horomia, refused yesterday to comment on the proposal, other than to say the Government's approval was necessary.

"The position is that if the purpose of the additional funding allocated in January is to be changed Cabinet approval is required.

"The Government's advice is that this would include decisions over the broadcasting platform."

BCL is desperate not to lose the revenue MTS would bring it and Dr Cullen and Broadcasting Minister Steve Maharey are understood to be sympathetic to that view.

MTS believes it is not its job to prop up BCL.

At issue now is whether MTS will challenge the Government's assertion that it has the right to veto its plans. An MTS spokeswoman said yesterday that MTS would not comment until it had a formal response from the Government.

Sky, meanwhile, is again pushing for the Government to put MTS to air on what it says are unused Horizon Pacific frequencies owned by TVNZ - a proposal understood to have been already floated by MTS, but rejected.

Sky has been squatting on the four frequencies set aside for Maori television in 1989 which will be used under the BCL arrangement.

When Sky realised the Government was set to reject the CanWest deal, it began warning of major interference problems with the supposedly reserved frequencies.

Sky told the Government that while it was prepared to move off the frequencies, and retune its decoders, there were hundreds of thousands of households which had PlayStations and televisions tuned in through VCRs on those frequencies which would also suffer interference problems if MTS went to air on them.

Sky spokesman Tony O'Brien yesterday stood by Sky's earlier warnings. BCL refused to comment.