Sky offers Maori TV one of its channels

By RUTH BERRY

Sky Television has offered the Maori Television Service one of its channels in a new deal designed to eliminate potentially major interference problems for hundreds of thousands of viewers.

The deal was put before the Government last week, but it has yet to reach a decision.

Aside from resolving the interference problems - which could see viewers tuning in to watch Coronation Street getting MTS instead - it is believed the deal could result in significant cost-savings for MTS.

It would be able to use the transmission facilities Sky already has in place, saving it from importing and setting up new transmitters.

The plan would also enable MTS to simply flick a switch when it is ready to go on air, saving it and the Government from potentially embarrassing delays.

Sky and MTS confirmed yesterday that a new proposal had been put to the Government but said details were confidential.

State-owned Broadcast Communications Ltd (BCL) refused to comment, saying negotiations were "delicate". But it is believed BCL would consider it a major blow if the Government backed the proposal.

The Government said in January that MTS would be on-air by the end of the year, using a combination of BCL's UHF transmission platform and Sky's digital service.

But while negotiations have been on-going, those plans have not been properly advanced, creating mounting speculation that MTS's start-up date would once again be delayed.

MTS has also been dogged with problems securing the $12 million-$13 million loan it needed to pay for building its studios and buying the equipment needed to kit them out.

A bank loan was finally arranged several weeks ago and MTS chief executive Derek Fox said this week that he was now preparing to sign a range of contracts.

The interference problems have delayed the transmission plans.

It was revealed late last year that Sky had been "squatting" on the four frequencies reserved for Maori television since 1989.

But Sky warned the Government then that hundreds of thousands of other households with PlayStations and televisions tuned in through VCRs could also suffer interference problems if MTS went to air on those frequencies.

Sky has said it would move off the frequencies and retune its customers' decoders if necessary, but argued that this would not solve the other interference problems.

Householders might respond negatively if they were forced to pay the cost of retuning their televisions to get MTS on air, the Government was warned.

Sky spokesman Tony O'Brien said yesterday that Sky, BCL, MTS and the Ministry of Economic Development had spent months going through the regions, working out how to juggle the use of a much wider range of frequencies to tackle the interference problems.

They were making progress, but the proposal put to MTS, now before the Government, "would eliminate the interference completely", he said.

Part of the reason the Government favoured MTS working with BCL instead of CanWest - which MTS originally wanted to do a deal with - was that it was keen to keep MTS within the "public broadcasting family".

Sources said yesterday that the Government now had to balance this preference against the cost-savings and the eradication of the interference problems the new deal offered.