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Sky makes MTS an offer to avoid costly set-top retune

By John Drinnan

Friday 29th August 2003

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Beyond the speculation about Derek Fox and his departure from the Maori Television Service has been a big political stink over how to get the channel up and running.

Sky Network Television is promoting a new transmission plan for Maori Television in an effort to allay potentially costly technical problems for its services.

Under the Sky alternative, the most likely option is for Sky to shut down one of its UHF channels and hand it to Maori.

Maori TV could avoid interference problems with the government-allocated UHF frequencies and remove one of the many obstacles to MTS' start-up. The deal would also save Sky a bundle.

But insiders say there is strong opposition within Parliament on ideological grounds, which may leave Sky with big problems.

It seems when installing set-top boxes at subscriber homes over several years Sky has tuned the set-top boxes into the TV sets' channels 35-38.

Those same channels will be used to pick up the Crown-allocated MTS frequencies once MTS is up and running.

If MTS is to use the Crown network, Sky may have to spend millions to individually retune the set-top boxes to another channel.

The true scale of the interference problems on the Crown network is unclear.

Sky has presented them as overwhelming and not just for its subscribers ­ it says thousands of video recorders and PlayStation machines will also have to be moved from channels 35-38. According to one MTS source, "tens of thousands" of subscribers and VCR users could be affected.

To solve the problem, Sky might have to use installation crew to move subscribers off the Maori frequencies and on to new ones, which could cost millions of dollars and cause big upheavals for its subscriber base.

That somewhat apocalyptic view is being rejected by the Ministry of Economic Development (which controls radio frequencies) and by cabinet ministers Michael Cullen and Steve Maharey.

In a cabinet paper obtained under the Official Information Act, Communications Minister Paul Swain said effects could vary from minor loss of picture quality through to a complete loss of picture.

But he said the problem could readily be solved through retuning and there was no need to move off the Crown allocated network.

But there is a widespread suspicion at MTS and among Maori broadcasters that the network set aside by the Crown is a hodge-podge of leftover frequencies that could prove to be a lemon.

Part of that scepticism stems from a history of antagonism and distrust between Maori and the Ministry of Economic Development.

In its previous guise as the Ministry of Commerce, officials advised successive governments, which rejected Maori Treaty of Waitangi claims that the Crown had a responsibility to Maori broadcasting. Eventually after a Privy Council decision, Maori won the day.

Now after years of wrangles and countless setbacks, the MTS board and other Maori are understandably attracted to the ready-to-go Sky channel.

As for Sky, it is not clear how it got itself into this potentially expensive pickle of using channels for its set-top boxes that have been clearly earmarked for use by Maori through most of the 1990s.

Economic Development Ministry radio frequency manager Brian Miller said the network set aside for Maori was not inferior to Sky's or any other UHF network.

"We have known about the problems for some time and held discussions with Sky, MTS and [Maori development ministry] Te Puni Kokiri. There has been some progress at meetings in setting up an education programme for people to retune sets," Mr Miller said.

But an education campaign encouraging people go through the complex process of retuning their TVs was not overly attractive to Sky, which came up with the alternative proposal for MTS several weeks ago.

Sky has declined to spell out how it can provide MTS the new network. It does have some spare frequencies.

But if closing down one of the five UHF channels that make up its analogue service seems radical, it may still be a less troublesome than leaving MTS on its network and annoying a significant part of its client base.

The decision of MTS, Te Puni Kokiri and Maori Affairs Minister Parekura Horomia to promote the Sky option has gone down badly with Finance Minister Michael Cullen and Broadcasting Minister Steve Maharey.

Late last year the government doubled the money allocated to Maori TV after rejecting pleas from MTS, Te Puni Kokiri and Mr Horomia to lease the TV4 frequency controlled by CanWest Global Communications.

Mr Maharey in particular has been keen for MTS to use the Crown-owned frequencies because they would deliver an additional $3.5 million in revenue to TVNZ subsidiary Broadcast Communications (BCL) to provide transmission facilities.

Mr Maharey has made it clear he wants MTS to work with BCL as part of a broad alliance of public broadcasting ­ an approach that has been dubbed " keeping it in the family."

If Maori use one of the existing Sky channels it would mean no extra cash for BCL.

BCL issued a paper this week that said while there might be some problems interference problems between VCRs and MTS it was not a major problem.

"In the very small percentage of homes where the interference occurs, it will be easily resolved, so they can use their VCRs and pick up MTS."

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