XN000022-1986-03-19 — Page 38

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WEDNESDAY, MARCH 19, 1986

BY FORCING DISINVESTMENT AND PROHIBITING DIVERSIFICATION, THE PROPOSALS WOULD PREVENT LICENSEES FROM STRENGTHENING THEIR FINANCIAL VIABILITY UNDER THE PRETEXT OF A NEED TO SAFEGUARD COMPETITION IN A PUBLICLY-SENSITIVE INDUSTRY, HE ADDED.

MR SOHMEN BELIEVED THERE WAS A GOOD CASE FOR THE GOVERNMENT TO IMPOSE A FIXED ANNUAL ROYALTY PAYMENT PAYABLE ON EVERY LICENCE ANNIVERSARY DATE BY THE COMMERCIAL LICENSEES FOR THEIR USE OF THE AIRWAVES IRRESPECTIVE OF THEIR FINANCIAL RESULTS.

+THIS SHOULD BE SUPPLEMENTED BY AN ADDITIONAL LEVY ON PROFITS FROM BROADCASTING ACTIVITIES PROPER, BASED ON AUDITED ACCOUNTS TO BE SUBMITTED TO THE LICENSING AUTHORITY.

+ IT SHOULD TAKE THE FORM OF A PERCENTAGE FIGURE APPLIED ON A DECREASING SCALE ON NET PROFITS ABOVE A CERTAIN MINIMUM RETURN ON SHAREHOLDERS' FUNDS. SAY EIGHT PER CENT, SO AS TO ENCOURAGE THE LICENSEES TO PRODUCE PROFITS WITHOUT PÉNALISING THEM FOR COMMERCIAL SUCCESS.

+ IT CERTAINLY DOES NOT REFLECT GOOD BUSINESS SENSE FOR THE BOARD TO RECOMMEND ROYALTY PAYMENTS BASED ON TURNOVER (I.E. ANNUAL GROSS RECEIPTS) OF BOTH THE TELEVISION AND RADIO LICENSEES SINCE TURNOVER IS NEVER A SATISFACTORY MEASURE OF THE ACTUAL PERFORMANCE OF ANY ENTERPRISE, AND WOULD ALSO TEND TO INHIBIT LICENSEES FROM MAKING THE NEW INVESTMENTS WHICH MAY BE NECESSARY OR DESIRABLE TO IMPROVE THEIR PROGRAMMING AND TECHNICAL STANDARDS, MR SOHMEN SAID.

BECAUSE OF ITS SIGNIFICANT SOCIAL IMPACT, MR SOHMEN SAID TELEVISION BROADCASTING DID REQUIRE SPECIAL CONTROL.

+BUT THESE CONTROLS SHOULD BE DESIGNED PRIMARILY TO ENSURE PROGRAMMING QUALITY WHICH CAN CONSISTENTLY SATISFY THE VARIED NEEDS OF A MULTINATIONAL AND MULTILINGUAL COMMUNITY, BUT SHOULD FALL SHORT OF INTERVENTION IN LEGITIMATE COMMERCIAL AND CORPORATE ARRANGEMENTS MADE BY THE BROADCASTERS, HE SAID.

HE NOTED THAT THE LICENSING PROCESS WAS ITSELF A CONTROL MECHANISM.

A REDUCTION IN THE LICENCE PERIODS FROM 15 TO, SAY 10 YEARS, COUPLED WITH MID-TERM REVIEWS, WOULD PROVIDE RELATIVELY FREQUENT REVIEW OPPORTUNITIES OF THEIR OVERALL POSITION AND BEHAVIOUR, MR SOHMEN SAID.

HE WAS NOT CONVINCED THAT PUBLIC HEARINGS EITHER AT THE MID-TERM OF LICENCE EXPIRY DATES WOULD BE PARTICULARLY USEFUL, AS TOO LARGE A NUMBER OF ESSENTIALLY SUBJECTIVE VIEWS COULD CLOUD ISSUES AND MAKE DECISIONS MORE DIFFICULT.

/+IF A

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