More call for Sky TV split

JOHN SELKIRK/Dominion Post

SPLIT SKY? There have been more calls for the Government to consider the operational separation of Sky TV.

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The Screen Production and Development Association has joined TVNZ in calling for the Government to consider the operational separation of Sky TV.

Chief executive Penelope Borland stopped short of directly advocating for a break-up of the pay-television company, however, saying it was possible digital free-to-air Freeview could bring balance to the broadcasting industry.

"What we are saying is options need to be looked at. The dominance in the market of Sky has been a huge issue for the whole industry."

The association, which represents television production companies, noted in its submission that Kordia had been separated from TVNZ and that Telecom had also been split into arms-length businesses.

"However, the issue remains of the dominance of the one pay TV operator in the New Zealand market, which acts as a gatekeeper to new channels," it said.

TVNZ made its request for "operational separation" in a submission to the Culture and Heritage Ministry, which is carrying out a Cabinet-ordered review of broadcasting regulation.

The state-owned broadcaster avoided naming Sky TV directly in the submission, but corporate affairs head Peter Parussini confirmed it was advocating the pay-television company be broken up "as a way of dealing with Sky's market domination".

The cost of buying dramas, soaps and reality TV programmes from overseas had more than doubled since 2004 and Sky's deeper pockets meant free-to-air broadcasters were finding it increasingly difficult to compete for programming, TVNZ said.

TVWorks agreed the public was not well-served by having a "pay-TV monopoly" and called for legislation requiring Sky to sell free-to-air channel Prime, which Sky bought in 2005 for $30 million.

Sky said in its submission to the government review that its "very significant investment" in pay television had been made on the basis of light-handed regulation, and a change would threaten further investment by the company.

New digital technologies meant the broadcasting market was becoming more diverse and the existing regulatory framework was appropriate. Sky had invested $668 million on its digital satellite service since 1998, it said.

TVNZ also called for "must carry, must pay" rules, that would force Sky to pay a contribution toward the cost of public broadcasting, and said Sky should be obliged to give prominence to public broadcasting and locally-made programmes on its electronic programming guide.

Broadcasting minister Trevor Mallard said in January that Labour would not finalise any broadcasting industry reforms till after the next election. National Party broadcasting spokesman Jonathon Coleman has forecast Labour would impose "heavy regulation" on the industry if it won.