A spanner in the free-market media works

Not quite so fast, Mr Joyce. A disquieting tendency is beginning to emerge around matters of public interest in so far as they concern the powers that be and anyone who questions or criticises how those powers are exercised.

That tendency generally seems to involve a bit of PR heavying and a quiet subsiding of the issue at hand - to be buried in the deluge of the rest of the week's news. And heaven knows there's been plenty of that about lately.

The latest example was the contretemps last week following the revelation that the Government had decided to cut MediaWorks, and certain other broadcasters, some slack.

The New Zealand Herald broke the story and, taking exception to the slant and terminology, Broadcasting Minister Steven Joyce's office threatened to take the paper to the Press Council unless it was corrected to the minister's satisfaction.

The Herald apparently demurred.

MediaWorks is one of this country's most significant and influential media companies. It owns television channels TV3 and Four and a nationwide network of radio stations including RadioLive, MoreFM, the Breeze, the Edge, Mai and Radio Dunedin.

Last year, one-off lump-sum payments for 20-year spectrum licences were due. In October 2009, the Government introduced a deferred payment system to allow broadcasters experiencing difficulties in meeting such hefty one-time payments some leeway.

In the case of MediaWorks, the amount owing was $43.3 million.

Mr Joyce told the Herald last week it was a "deferred payment" system to help the radio industry during tough times in 2009, rather than a "loan".

MediaWorks is paying off its radio broadcast licence for the 2001-31 period over 50 months at 11.2% interest and, by all accounts, it is up to date with its instalments.

"They have to present it as a debt because it is a debt they owe the Crown, so how they do that is between them and their accountants," Mr Joyce told another newspaper.

Mr Joyce once owned much of the company's radio network before selling it in 2001. He has had nothing to do with it since, except, he says, for a brief stint as a fill-in announcer in 2005. There is no reason to dispute this.

But muddying the waters a bit is the fact that the company is taking the Inland Revenue Department to court over a disputed $24.5 million tax bill.

On the one hand, it has been given a four-year breathing space in which to find the funds required to purchase the spectrum lease through which to run its commercial operation; on the other, it is playing hard-ball with the tax department.

But let's not get too carried away with the side issues, no matter how distracting they might appear. There are a number of more pertinent questions to be answered.

First, why is the Government so generously disposed to these particular commercial operations?

The implication is that had the deferred payment system not been made available, then MediaWorks and several other unnamed broadcasters might not have been able to purchase their spectrum licences. Had this been the case, arguably, other operators might have been able to put in successful bids. Classic free-market stuff - on which the Government has been weaned. Are we to understand from its actions in this instance that the market does not necessarily know best after all?

And what of other businesses that might appreciate a bit of rope in hard times?Second, is there not a potential issue of conflict here? It might be said, particularly if one subscribes to the nod-and-wink notion of business done behind closed doors, that having helped these broadcasting operations out of a jam, the same might tend to be reasonably disposed - if they were not already - towards the Government.

Or doesn't that matter any more?Third, how does it all stack up with the Government's attitude towards public broadcasting? Last year it froze National Radio's funding.

It wasted no time in getting rid of TVNZ's broadcasting charter so that the "state" TV operation could concentrate on returning dividends without the niggling ballast of socially useful and otherwise edifying programming; TVNZ 6 has now been canned and turned into a commercial youth channel; and the last great hope of public broadcasting for the digital age, TVNZ 7, is said to be for the chop when its funding runs out in 2012. That would make New Zealand one of the only developed nations without a public broadcasting TV service.

Instead, it seems, we will have the free-market alternative - except if the MediaWorks "leg-up" is anything to go by, it may not really be "free" at all.

Simon Cunliffe is deputy editor (news) at the Otago Daily Times.

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