Keating launches race for rights to pay-TV

PUBLISHED : Tuesday, 23 March, 1993, 12:00am
UPDATED : Tuesday, 23 March, 1993, 12:00am

FOR Australia's telecommunications carriers and all those with interests in the introduction of satellite pay television here, Labor's win in Saturday's federal election has immediate and tangible implications.

The Australian and Overseas Telecommunications Corporation (AOTC) will not be sold. The country's new second carrier, Optus, will not have to reconsider its investment in the face of potential competition from an overseas buyer and AOTC and microwave pay-TV remains on the back burner.

For those involved in the country's technology industries, there are potential benefits - for instance, from Labor's pledge to cut company tax from 39 per cent to 33 per cent; from its promise of a new general investment allowance of 10 per cent on equipment bought before July next year and from its promise of greater government help to make local companies more competitive in Asia.

The Australian Science and Technology Council has been sharply critical of Australia-Asia links, saying companies here have been missing out on expanding business with Asia on the basis of specific technologies and, in particular, telecommunications.

It has called for greater co-ordination and support from the major Federal Government departments and for the development of a comprehensive strategy to take advantage of Australia's science and technology links with Asia. They are pleas the government of Prime Minister Paul Keating is likely to be more receptive to.

But the specific benefits from these policies are too difficult to quantify and the policies themselves will take time to implement - assuming they are implemented.

For the AOTC, the benefits began on Saturday night: the gun being held to its head, in the form of immediate privatisation, by the Liberal-National Coalition has been unloaded.

Another less significant aspect of the election campaign was the battle for microwave-pay television.

Australis Media, which holds most of Australia's microwave licences, waged an expensive and high profile advertising campaign against a Labor Government 11th hour about-face which put the allocation of further licences on hold until satellite pay-TV is underway in Australia.

The January 28 move, seen by Australis as Labor pandering to its ''media mates'' who planned to tender for satellite licences, came just hours before tenders for more microwave licences closed and effectively quashed Australis' plans to set up a multi-point distribution system pay-TV.

The coalition backed the introduction of microwave pay-TV and had planned to allow it immediately it took office.

Its defeat means the only hope of redress for Australis' head, Mr Steve Cosser, now lies in the action he is taking in the Federal Court.

As for satellite television, tenders for the country's first two licences were deferred to April 28 from the original March 24 closing date because of the election.

The successful applicants will be chosen by a price-based allocation system, to involve the Trade Practices Commission and the Australian Broadcasting Authority.

Key players include Kerry Packer's Channel 9, plus channels 7 and 10, West Australian media proprietor Kerry Stokes, Irish media baron Dr Tony O'Reilly, and US companies Continental Cable Vision, Time Warner and TCI.

Assurances from providers, about the early availability and compatibility of new compression technology with the local television system, mean pay-TV should begin here in April next year.

Meanwhile, as the coalition abandons its election-losing 15 per cent goods and services tax plan, the local IT industry is welcoming the end to uncertainty created by the March 13 poll.

For hardware vendors, the GST would have replaced the 20 per cent sales tax on the wholesale price of computer equipment, with business users able to claim a tax credit for the GST.

But for software suppliers, there is no sales tax and non-business users would not have been able to claim a GST tax credit, for instance on computer games.

The re-election of Labor means the tax status quo, but it also means a return to stability.