Funferal

Cable monopoly in Ireland now complete

Labour TD Tommy Broughan has issued a statement dealing with the recent purchase of NTL Ireland by UGC. NTL is the largest cable operator in Ireland. The remainder of the market (Chorus communications) was part of the Independent Group, but is seemingly now also owned by UGC:

Speaking in the Dail, Deputy Broughan commented, “The recent acquisition of NTL by UGC, led by John Malone the so-called ‘Cable Cowboy’, means that both cable networks in Ireland are now owned by the same company. Added to this is that, after the Murdoch family, Malone is the main shareholder in NewsCorp, owner of BSkyB, the leading supplier of digital television services in Ireland.”

Bear that last point in mind in reading this excerpt from the Electric News item link above:

Still, many expect that Ireland’s Competition Commission will eventually allow the sale, in part because Chorus and NTL Ireland’s networks do not overlap. Moreover, an Irish cable operator with near-national reach would have more resources to do battle with satellite TV firm British Sky Broadcasting (BSkyB), which has captured a large chunk of the Irish market.

Incidentally the NTL network was formerly Cablelink, owned jointly by RTÉ and (pre-privatization) Telecom Éireann but they were forced to divest (to lessen TE/eircom’s market strength).
Also, the method used by UGC and NTL to avoid regulatory scrutiny seems one that should be illegal – they got Morgan Stanley to buy the company through (what appears to be a shelf-company) subsidiary and then sell that unit on to UGC when the deal had cleared all regulatory hurdles (as it did because Morgan Stanley does not own the remainder of the market. The fact that they were able to announce what they were going to do in advance seems particularly brazen and corrupt.
I include the full text of Broughan’s statement below the break.

STATEMENT BY TOMMY BROUGHAN TD
Labour Spokesperson on Communications, Marine & Natural Resources,
Wednesday, 15 June 2005
‘CABLE COWBOY’ LASOOES THE IRISH TELECOMS MARKET
Labour Spokesperson on Communications, Deputy Tommy Broughan, today urged Minister Noel Dempsey to investigate the terms of the recent take-over of NTL by the UGC group and the implications for the future of the whole Irish telecommunications industry.
Speaking in the Dail, Deputy Broughan commented, “The recent acquisition of NTL by UGC, led by John Malone the so-called ‘Cable Cowboy’, means that both cable networks in Ireland are now owned by the same company. Added to this is that, after the Murdoch family, Malone is the main shareholder in NewsCorp, owner of BSkyB, the leading supplier of digital television services in Ireland.
“The Labour Party is obviously concerned with the long-term implications for the Irish telecommunications industry if an individual’s company has control over such a range of broadcasting assets.
“The manner in which UGC acquired NTL, a financial manoeuvre commonly seen in the US called ‘warehousing’, was another disturbing feature of this takeover. In a bid to avoid coming under the scrutiny of the Competition Authority, a third party, the bankers Morgan Stanley, bought NTL and in a deal believed to be worth around EURmillion to the bank, then sold it on to UGC, thus avoiding Irish regulatory scrutiny and ensuring a higher price
for NTL.
“I have requested the Minister for Enterprise, Trade and Employment to ask the Competition Authority to investigate the acquisition of NTL by UGC under Section 23 of the Competition Act 2002 which refers to competition in the media.
“Minister Dempsey finally agreed in the Dail to raise the ‘warehousing’ matter in cabinet with his colleague the Minister for Enterprise but appears very reluctant to pursue the wider telecommunications issues involved.”