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«COMMERCIAL RADIO INQUIRY Report of the Australian Broadcasting Authority Hearing into Radio 2UE Sydney Pty Limited February 2000 Sydney ISBN 0 642 ...»

-- [ Page 8 ] --

On 5 December 1997 Ms Lucinda Webb (on behalf of Mr Harry Miller) sent an e-mail message to Ms Samantha Mostyn (Optus Government and Corporate Affairs) about using Mr Jones in 1998 to promote number portability and switching to Optus. Mr Harry Miller suggested that he and Mr Chris Anderson (Optus CEO) ought to be thinking about ‘how we can harness Alan into really being at the front and leading the charge’.78 In a letter to Mr Harry Miller on 8 December 1997 Mr Jones indicated he thought this a good idea.79 On 15 March 1998, Mr Harry Miller sent (apparently by e-mail) a memorandum to Ms Mostyn indicating Mr Jones’ willingness to be involved in promoting number portability and switching to Optus.80 On 22 June 1998, Mr Jones broadcast a statement concerning the privatisation of Telstra saying, ‘you can’t privatise Telstra without completely deregulating the private telephone monopoly that Telstra now holds in local calls’.81 On 23 June 1999, Mr Jones broadcast a statement concerning an announcement by Cable and

Wireless Optus regarding local telephone calls. Among other things, Mr Jones said:

Clause 8 (CWO.0003.0578).

AJ.0006.1149.

AJ.0006.1150.

Transcript, Mr Suich p. 424; Exhibit 24 p. 3.

Clause 11.2(d) (CWO.

0003.0578).

AJ.0002.0420.

AJ.0002.0424.

AJ.0002.0431.

ABA_Docs.0001.0001.

You’ll appreciate that I’ve said many times the biggest problem that Telstra imposed on us is the exorbitant cost of local telephone calls. We’re almost, if not the, dearest in the world. And breaking down the Telstra monopoly of the local telephone industry is damn difficult … Cable and Wireless Optus are connecting local telephone customers … Now, remember when Optus came into the long distance calls way back, and mobile calls, the prices dropped. This is the only way the consumer’s going to get some benefit out of local telephone call costs. So if you’re looking to support the notion of competition in telecommunications, start with the local phone call and think about Cable and Wireless Optus.

Optus Sports Vision and Optus’ Programming Rights Over AFL and NRL

On 26 June 1998 Ms Alexandra Lutyens (Sponsorship Manager, Optus) sent a memorandum to Mr Suich indicating that Mr Jones was not using the prompts supplied by Optus to embellish his live reads. Ms Lutyens suggested that it was not clear whether Mr Jones (a) ‘sees his role as one which promotes and delivers a pro-Optus stance on major issues’, or (b) ‘is prepared to stretch our advertising dollar by editorialising’. She thought that he should be doing both and Optus ‘should be getting at least 2-3 mentions of one type or another a week’.82 On 30 June 1998, Mr Muldoon (Public Affairs, Optus) sent to Mr Jones by fax some talking points on the demise of Optus Sports Vision and Optus’ programming rights over AFL and NRL. The cover sheet said: ‘Any help you can provide tomorrow morning would be most

appreciated’.83 The talking points said:

There continues to be some interesting manoeuvring in the pay television industry.

Only a couple of days ago Optus closed up its sports programming company because it was no longer commercially sustainable.

Yet within the space of 24 hours it’s been able to negotiate an equally attractive sports package with Channel Seven.

There’s been no harm done – Optus continues to hold key programming rights, including the AFL and NRL.

Pay television seems to be moving in the right direction – especially with Optus, which is probably the one operator hell bent on providing customers with a better deal.84 The next day, Mr Jones reassured listeners that they would not miss out on the AFL, NRL and Olympics as a result of the appointment of a provisional liquidator to Optus Sports Vision. Mr Jones said that ‘people were ringing me and saying, well, what the hell is

happening?’.85 Mr Jones told his listeners that ‘there’s no problem’, as:

This is all part of the manoeuvring of pay TV. It’s going to be difficult to go into the twenty-first century with two competing pay TV groups offering separate CWO.0004.0762-0765.

CWO.0002.0320-0321.

CWO.0002.0321.

CWO.0002.0323-0324.

programming. But at the same time, while Optus has closed its sports programming company, Optus Sports Vision, because it wasn’t commercially sustainable, my understanding is that in the space of twenty-four hours, Optus was able to negotiate an equally attractive sports package with Channel Seven.

So it would seem for you, the viewer, with your Optus pay TV and you’re paying it every month, no harm done. Optus continues to hold key programming rights, including the AFL and certain national Rugby League games. So it seems Optus is committed to pay TV, making some rationalisation along the way. And if you’ve seen it last week on Optus, it seems quite clear that you’ll see it next week.86 The content of the above broadcast by Mr Jones is substantially similar to the content of the talking points.

Finding

–  –  –

‘Optus UpDate’ Broadcast On 21 July 1998, Ms Lutyens sent a fax message to Mr Jones’ secretary, Ms Braithwaite, regarding a product called ‘Optus UpDate’.87 Attached to the message was an application form for the service.





Ms Braithwaite summarised the information provided by Ms Lutyens for Mr Jones on 25 July 1998.

Ms Braithwaite said:

Attached is correspondence from Alexandra Lutyens, Sponsorship Manager, Optus Communications.

She has been instructed to forward information to you on a regular basis so that you can give it a plug on air.

They would like mentioned their new mobile phone system called Optus UpDate.88 On 28 July 1998, Mr Jones wrote a script and broadcast a statement concerning a new service called ‘Optus UpDate’.89 The text of Mr Jones’ broadcast reflected the summary provided by Ms Braithwaite.

On the day following the broadcast, Mr Jones wrote to Ms Lutyens thanking her for the information and saying that he had given it ‘a real bash’ and that he hoped the publicity was helpful.90 CWO.0002.0323.

AJ.0004.0752.

AJ.0004.0751.

AJ.0004.0748.

AJ.0004.0750, Transcript, Mr Jones p. 1074.

The information provided to Mr Jones by Ms Braithwaite and by Ms Lutyens corresponded closely to the script written or dictated by Mr Jones, and the statements made by him on his program.

Mr Jones maintained in evidence and submissions that this exchange of information between Optus and himself, immediately preceding and following the broadcast was not as a result of his arrangement with Optus.91 While the Optus contract did provide for ‘regular personal endorsement on the program…’92 Mr Jones gave evidence that it wasn’t his purpose to give Optus publicity.93 Mr Jones also said that his contractual arrangements have ‘never influenced what I am about’.94 The Panel believes that listeners are entitled to consider for themselves the possibility that Mr Jones was broadcasting this statement pursuant to his agreement with Optus. Listeners may conclude that Mr Jones was not broadcasting the statement in pursuance of his contract with Optus. Listeners are not able to form a view, however, in the absence of disclosure of the existence of the agreements.

Finding

–  –  –

Sky Racing Channel On 2 September 1998 Ms Lutyens sent Ms Braithwaite (for Mr Jones) a live read script together with some talking points for Mr Jones on the launch of the Sky Racing Channel.95 On 4 September 1998 Mr Jones had a long telephone discussion with Mr John Tapp (race caller) about the Sky Racing Channel Mr Tapp was to host. During the interview, Messrs Jones and Tapp covered many of the talking points provided.96 Transcript, Mr Jones pp. 1073-1074 CWO.0003.0578.

Transcript, Mr Jones, p. 1074.

Transcript, Mr Jones, p. 1062.

CWO.0002.0395-0397.

CWO.0001.0221-0233..

Financial Results On 31 August 1998 Mr Muldoon sent Optus’ financial results to Mr Jones by fax with the

message:

Again, any help you can provide tomorrow would be much appreciated’.97 On the same day, Mr Jones received a fax from Mr Chris Anderson attaching an advance copy of a media release on the financial results.98 On 1 September 1998 Mr Jones referred on-air to Optus’ financial results in a way that suggested he was quoting from, or agreeing with, Mr Terry McCrann’s column in the Daily Telegraph of that day.99 The same day, Mr Harry Miller sent a fax to Mr Muldoon complaining about being left out of ‘the loop’ and

adding:

Would it be possible for you to confirm what happened yesterday and that we can get a good system in for the future.

For the record, I rang the station very early this morning and as a double check sent through a copy of your fax. As you are no doubt well aware, Alan’s comments on your excellent results went to air just after 8am.100 Mr Muldoon responded on 3 September 1998, indicating that he had often faxed ‘latebreaking’ stories to Mr Jones at home (at night and on the weekend) and had never encountered any complaints from Mr Jones before.101 Telstra Phoneaway Cards Between 31 August and 3 September 1998 Mr Jones presented five live reads promoting Telstra Phoneaway cards.102 Ms Lutyens sent a fax to Mr Harry Miller on 2 September reminding him of Mr Jones’ obligation under clause 9.1 of the 1998 agreement and suggesting that the Telstra promotions were in breach of this clause.103 On the same day Mr Harry Miller received a fax on this issue (apparently responding to a query by Mr Jones)

from Mr Murray Wilton (Promotions Department, 2UE) explaining the situation:

This promotion will finish on Friday. The only program it’s running in is Alan Jones, and the reason for this promotion is that Telstra are a major player with the Commonwealth Games. As you can see, there is no hard sell of Telstra or its facilities.

This was organised and approved by me.104 Mr Harry Miller sent a fax to Mr Jones on 3 September 1998 indicating the line Mr Harry

Miller had taken with Mr Suich on the Telstra matter, saying:

AJ.0001.0234-0236.

AJ.0004.0771.

AJ.0004.0776-0777; CWO.0001.0076.

AJ.0003.0450.

AJ.0003.0462.

CWO.0001.0193-0195 CWO.0001.0189 AJ.0003.0457-461.

CWO.0004.0802 Clause 9.2 of the agreement provides that Mr Jones ‘will not provide to Radio Station 2UE live or personally recorded advertisements in respect of Competitive Services or Competitors.’ AJ.0003.0456.

I … left a voice mail on Max Suich’s line telling him it was a mistake at 2UE and that they had slipped something through that you’d never even seen or approved. I also said that firm steps were being taken to make sure that it didn’t happen again …105 On 4 September 1998, Mr Harry Miller sent a fax to Mr Conde complaining that Mr Jones had not been given the opportunity to approve live reads in advance, and that the Telstra live reads were ‘obviously in conflict with his Optus commitments.’106

In reply, Mr Conde sent an e-mail to Mr Harry Miller, defending 2UE, and saying:

Alan was approached by Sales and agreed to do the spots prior to his first putting some to air. It was after that he then indicated this morning that he had been instructed by you that he could not do them anymore – and said something about Optus.107 Finding

–  –  –

Listing on the Stock Exchange On 16 November 1998 Mr Muldoon sent Mr Jones some ‘background information’ on Optus’ listing on the Australian Stock Exchange ‘which might be helpful tomorrow morning for your chat with Chris Anderson’.108 Mr Jones had two scripts on this issue, one dealing with the details of the float,109 and one dealing with questions for Mr Anderson on the float.110 Mr Jones conducted an interview with Mr Anderson the next day.111 Other Mentions

Other examples of favourable comment include:

AJ.0003.0464.

2UE.0025.0232.

2UE.0025.0231.

AJ.0002.0280-0281.

AJ.0004.0793.

AJ.0004.0789-0790.

Exhibit 86.

19 August 1998 – call drop out and the cost of redialling;112 ♦ 16 September 1998 – Optus float;113 ♦ 16 October 1998 – Optus, AAPT and Vodaphone;114 ♦ 6 November 1998 – Optus Mobile Free Calls;115 ♦ 1 June 1999 – Optus takeover of AAPT;116 ♦ 22 June 1999 – Local Calls.117 ♦ Attitude of Optus to the Performance of the Agreement Mr Suich gave evidence that the significance to Optus of Mr Jones’ agreement could be

ranked in the following order:

♦ the provision of live reads;

♦ ‘public endorsement on the program and elsewhere’;

♦ ‘the use of him in pay television’; and ‘his appearances with customers and staff’.118 ♦ Mr Suich added, however, that ‘I don’t think you can underrate the importance of the live reads’.119

WALSH BAY FINANCE PTY LIMITED (WALSH BAY FINANCE)

The Agreement On 23 October 1997 the NSW State Government entered into an agreement concerning the redevelopment of Walsh Bay with Walsh Bay Properties, a partnership comprising Mirvac Pty Limited (Mirvac) and Transfield Australia (Transfield). Walsh Bay Finance is a company jointly owned by Mirvac and Transfield.

In May 1998 discussions were held between Walsh Bay Finance and Mr Harry Miller concerning the Walsh Bay Finance partnership’s use of Mr Jones’ consultancy services. On 29 May 1998, Mr Harry Miller was advised by Mr Robert Hamilton, Managing Director of Mirvac and Mr Tony Shepherd, Chief Executive, Project Development at Transfield, that Walsh Bay Finance ‘would like to advise of our intent to proceed with your proposal’.120 Mr Harry Miller was also given a ‘Media Fact Sheet’ setting out ‘Key Issues’ concerning the Walsh Bay development.121 AJ.0001.0227.

AJ.0004.0778.

AJ.0004.0788-0782.

AJ.0002.0267-0270.

AJ.0002.0307 AJ.0002.0309 AJ.0002.0314 AJ.0002.0321.

AJ.0001.0096-0099.

Transcript, Mr Suich, p. 424.

Transcript, Mr Suich, p. 424.

AJ.0006.1141; Exhibit 78.

AJ.0006.1142; Exhibit 78.



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