«COMMERCIAL RADIO INQUIRY Report of the Australian Broadcasting Authority Hearing into Radio 2UE Sydney Pty Limited February 2000 Sydney ISBN 0 642 ...»
INTERVIEW WITH MR COUSINS, 17 JANUARY 1996 Material Broadcast by Mr Jones
On 17 January 1996, Mr Jones conducted an interview with Mr Cousins:
MR JONES: I mentioned yesterday what appears to be – and appearances aren’t always equal to reality, but it appears to be a major vendetta emerging against Optus Vision.
QAN.0007.0080 Councils are getting together and going to court to prevent Optus Vision from installing their overhead cables. As I indicated, it’s my understanding that Optus Vision have no choice but to put in overhead cables. They were told they could only use existing structures when they began their cabling and, unlike Telstra, they can’t go underground.
Councils are going on because they were also denied access to Telstra’s cables which, as I’ve said many times, are being paid for by us. Those cables for Foxtel are being laid by Telstra – four billion dollars. That ought to be in your little black book on your fridge door as an issue to think about when you go to the elections.
Should we be, as taxpayers, funding the opportunity for someone, it doesn’t matter who it is, to make money out of pay TV, to the tune of four billion dollars.
So Foxtel can go underground, because that’s, of course, where Telecom, Telstra, have their cabling. And, of course, the other crowd, Optus Vision, were told that they had to use existing structures.
Now, of course, councils are going on about them being environmentally unaesthetic and so on. I haven’t heard any objections here from the public. We have not had one single call in relation to Optus’ cabling – or letter.
As I understand it, these cables will carry not only pay TV, but a whole range of other telephonic services as well and, of course, Telstra, as we know, is also linking up homes by cable to pay TV, cable which Rupert will use, for which we are paying but from which Rupert will profit.
And Telstra could be facing a major cost blowout. Linking up homes by cable the way they are doing it, to the Foxtel/Telstra pay TV network, it’s being argued, is costing $2,145 perhouse, double the original estimate.
So how will that effect the price of local phone calls on the Telstra network? Should the public be paying four billion dollars for Telstra to put in underground cables so that someone can make money from pay TV?
The Chief Executive of Optus Vision is Geoff Cousins and he’s on the line. Mr Cousins, good morning. What is going on? Can you explain how you come to be using overhead cabling?
MR COUSINS: Yes, I sure can. We are building, Alan, the second telephone network in Australia. That’s what we’re doing and if we don’t do this there will never be any competition in local telephone calls in this country. There never has been thus far and if anybody stops us from building this network, there never will be.
MR JONES: So why don’t the cables go underground?
MR COUSINS: Okay. When we were invited to bid for the second licence to build this network and we paid $800 million, I might say, to the Federal Government for the right to build the network, so it’s not exactly a cheap enterprise. We’re then investing another three billion dollars to build it and this is private money. This is not taxpayers’ money. We were asked to use existing infrastructure, not to go and erect new structures or to build the thing from scratch. In other words, to use whatever infrastructure was there. We looked at what was available and the only infrastructure that we can use is the electricity poles. There’s already an awful lot of cables up there.
MR JONES: Could you have shared cables with Telstra?
MR COUSINS: No, we can’t do that.
MR COUSINS: No. No way in the world. No way that we could do that. As I say, if you don’t have cable there, you will never have a second telephone network.
MR JONES: But why weren’t you allowed to share the cable with Telstra?
MR COUSINS: We can’t share the cable. Some people have said we could have put our cable into their underground ducts but that is impossible. There’s no room in most places.
MR JONES: And they didn’t exist at the time that you won the right to the second network and you had to use existing structures.
MR COUSINS: Exactly so. There are some duct areas where maybe you could get a bit of cable in. Then there are others where you can’t get any in, etcetera, etcetera.
MR JONES: What you are doing overhead are not pay TV cables, they are cables from which a whole new telephone network will be run.
MR COUSINS: That is exactly right. They also carry the pay TV signal. This is also the world’s most sophisticated interactive network, for connection to the Internet and all these other fantastic services.
MR JONES: How do you feel about being dragged through the courts?
MR COUSINS: I’ve got to say that, just imagine, Alan, if every time you wanted to build any kind of national communications network in the country, you had to go to every council. You know how hard it is to get the council to approve a garden wall.
MR JONES: That’s correct.
MR COUSINS: You’d never have any national services in the country and that’s why when we got the licence, a condition of the licence was that we simply had to consult on these matters but the councils did not have the power over a national telephone – MR JONES: And is the Federal Government likely to dilute those rights? You were given certain rights as a condition on starting up. Is the Federal Government now likely to change the rules in mid-stream?
MR COUSINS: I don’t think so, Alan. I think that the Federal Government understands, as do most thinking people, that when you get to national infrastructure, and this is a major national engineering project to do this. Three thousand people we’re hiring, three billion dollars we’re investing. It’s a very, very big enterprise indeed.
MR JONES: But under the terms which you were set up, for a variety of reasons, and you said you can’t consult councils, you’re exempted from state and local planning laws when it comes to the installation of the cables.
MR COUSINS: That is correct.
MR JONES: And that condition under which you were built up. Is that enshrined in an act.
MR JONES: How then could that be challenged in the courts?
MR COUSINS: The councils are – you can challenge anything in a court.
MR JONES: With taxpayers’ money.
MR COUSINS: Ratepayers’ money. And this is the thing. These people are taking an enormous risk in doing this because if they lose in court, what they’re doing is putting their ratepayers’ funds at risk. The damages that could result from this would be enormous.
MR JONES: What sort of consultation have you had with individuals and individual local councils on the erection of overhead cables?
MR COUSINS: We have had tremendous consultation. We go way beyond what is required of us in the Act and, of course, our people are out there selling pay TV subscriptions, door to door, right now.767 Mr Jones’ Submission to the Hearing In addition to the general submissions made by Mr Jones, Mr Jones also made the following
submission in relation to this broadcast:
It was not suggested to Mr Jones that his decision to conduct the interview would not have been made but for the Agreement, or that the manner in which it was conducted was influenced by the existence or terms of the Agreement.768 2UE’s Submission to the Hearing In addition to the general submissions made by 2UE, 2UE also made the following
submission in relation to this broadcast:
Jones had been very publicly associated with Optus (through public appearances and advertising) for some years. This must condition his listeners’ expectations of the way in which he will deal with Optus and related topics whilst on-air.769 The Panel’s Findings The Panel finds that the broadcast of this interview is a current affairs program. It purports to concern matters focussing on political, social and economic issues of relevance to the community.
The Panel finds the available fact of Mr Jones commercial agreement with Optus was withheld during the broadcast. The existence of Mr Jones’ commercial agreement with Optus was not disclosed in the broadcast.
The Panel finds that this available fact was relevant because:
♦ the issue was of concern to Optus: it was an interview with the Chief Executive Officer of Optus Vision. During the interview, Mr Cousins says ‘We are building, Alan, the second telephone network in Australia. That’s what we’re doing and if we don’t do this there will never be any competition in local telephone calls in this country. There never Exhibit 86, p. 115.
Submission made by Mr Alan Jones, paragraph 205.
Submission made by 2UE – Alan Jones Broadcasts – Breach of Clause 2.2(d) of Code of Practice 2, D1 has been thus far and if anybody stops us from building this network, there never will be’;770 ♦ Mr Jones defended Optus’ overhead cabling, saying ‘as I indicated, it’s my understanding that Optus Vision have no choice but to put in overhead cables. They were told they could only use existing structures when they began their cabling and, unlike Telstra, they can’t go underground’;771 and ♦ the broadcast was favourable to Optus.
The Panel considers that it is unnecessary for there to be evidence that the interview would not have been made but for the agreement or the manner in which it was conducted was influenced by the existence or terms of the agreement. The interview is favourable to Optus.
The existence of the agreement with Optus is a relevant available fact which should have been disclosed.
The Panel notes 2UE’s submission that the interest of the interviewee is clear and hence listeners know who is persuading them. The Panel does not accept this submission. While the interviewee’s position is declared, Mr Jones’ interest is not. Mr Jones has a financial agreement with Optus, but there is no disclosure of it.
The Panel notes 2UE’s submission that Mr Jones had been ‘very publicly associated with Optus (through public appearances and advertising) over some years’, and that this must condition listeners’ expectations regarding his disinterestedness or otherwise. However, clause 3.1(a) provides that advertisements must not be presented as news programs or other programs. To the extent that the presentation of any live read advertisement is capable of causing confusion in listeners’ minds with the editorial comment of Mr Jones, the Panel would be concerned that those live read advertisements may have breached clause 3.1(a).
Further, listeners should not be required to be aware of the public appearances of Mr Jones for Optus, which are external to the matter broadcast. Mr Jones’ public appearances for Optus are not, in the Panel’s view, sufficient disclosure of a commercial relationship between him and Optus, which encompasses on-air editorial conduct.
The Panel therefore does not accept the submission of 2UE in this regard.
The Panel finds that, in the presentation of a current affairs program, Mr Jones presented material in a misleading manner by withholding a relevant available fact, namely the existence of a commercial relationship between himself and Optus.
The Panel finds 2UE to be in breach of clause 2.2(d) of the Codes.
INTERVIEW WITH MR COUSINS, 14 MARCH 1996 Material Broadcast by Mr Jones
On 14 March 1996, Mr Jones conducted the following interview with Mr Cousins:
MR JONES: Yesterday Optus Vision announced that they would be sponsoring Rugby League until the next century, until the year 2000 and there is a perception out there that all of this is very difficult to understand, because somehow News Ltd are so big and Telstra are so big and Exhibit 86, p. 115.
Exhibit 86, p. 115.
who is this little Optus Vision? So I thought we’d have a word with the Chief Executive Officer, Geoff Cousins, from Optus Vision because the perception is quite different from the reality. Optus Vision, little Optus Vision, how little are they?
GEOFF COUSINS: Not too little. If you add up the market capitalisation of the shareholders in Optus and Optus Vision, it comes to about double that of News Ltd and Telstra added together, so I think we can say we’re going to bring a bit of force and stability to the Rubgy League.
MR JONES: It’s nut just, though, pay TV that fundamentally you’re into, is it? You are a telephony business.
MR COUSINS: What we are dong, Alan, as we roll out our cable network, is we are building the second telephone network in Australia. We’re going to bring cheaper local phone calls.
Wherever that cable goes, you are going to get cheaper local phone calls for the first time in the history of this country.
MR JONES: Just as we got reductions in STD charges.
MR COUSINS: Absolutely. STD charges are very important to a lot of people but the local telephone network is a lifeline service for many people; for old people in the community, for lots of small businesses, and to say, for the first time you going to get real competition there instead of those prices going up and up and up every year, we’re actually going to reduce the cost of the local phone call.
MR JONES: Isn’t that the most powerful argument against any suggestion that anyone would impose a cost based on time for local calls? I mean, the competitor wouldn’t allow it, surely.
MR COUSINS: We are not going to have timed local calls for residential customers. I can state that categorically, and all this talk about if Telstra is privatised, will time calls, instead of just having a 25 cent call, or a lower price in our case, will that change and you’ll have to pay by the minute, I can give you categoric assurance that when the Optus local telephone network comes on, we will not have timed local calls for residential customers.
MR JONES: What about all this business before the courts about laying overhead cables?
How did that all come about?