FOR LISTENERS-IN

New Zealand Times, Volume LII, Issue 12196, 22 July 1925, Page 12

FOR LISTENERS-IN

BROADCASTING CONTRACT TERMS OF GOVERNMENT AGREEMENT MINISTER IS SATISFIED Yesterday the terms of the Government's contract with, the broadcasting syndicate for a new broadcasting service announced. C The agreement is between the'Government and Messrs William Goodfellow, Hamilton, and A. R. .Harris, Christchurch, as trustees for the broadcasting company. Messrs Goodfellow and Harris vnderta! to order forthwith two radio telephone broadcasting equipments designed to deliver 500 watts of radio frequ*- power, and to erect one station in Auckland and one in Christchurch within six months from the date of the agreement. When the stations in Auckland .and Christchurch are in operation, the licensees must, if requested to do so by the Minister, erect a station in Wellington and one in Dunedin. Messrs Goodfellow and Harris undertake to at once form a company which will ratify the agreement and assume cotnrol before August 31st next. The company will have a limited liability with a capital of .£20,000. divided into 20,000 shares of .£1 each. It is also agreed that 10 per cent, of any issue of shares which the company may from time to time make, mu6t. be held at the disposal of the department for a certain period. The agreement stipulates that the company will take all reasonable steps to provide and maintain an efficient broadcasting service in pursuance of the broadcasting regulations, and will also make any necessary provision for new apparatus to keep stations up to date, and otherwise perform and observe the provisions of the broadcasting regulations and any amendments thereto. ' From the commencement of the agreement, the Post and Telegraph Department will credit to a broadcasting fund ■£l -5s out of each annual fee of -£1 IDs, received by the department in respect of listeners' licenses, and 00 per cent, of the fees received by the department in respect of radio dealers' licenses, and if the company is maintaining' an efficient broadcasting, service in accordance with the agreement and to the satisfaction of the Minister, the latter will pay the proceeds of such funds to the company as may be arranged. • COMPANY’S INCOME The income eceived by the company will be used— • For the establishment and maintenance and operation of broadcasting stations in pursuance of *he agicement. For the provision of new apparatus to keep tho broadcasting .stations up to date. i? or providing suitable matter for broadcasting. - For payment of ordinary working and operating expenses, including payments on debentures. For payment to shareholders of a dividend, which shall not exceed 71 per rent, per annum, free of income tax. Except upon a winding-up, the company is not permitted to declare a dividend at a rate exceeding 7i per cent, per annum free of income tax on ordinary or preference, shares, both dividends: to he accumulative, nor to pay a greater* rate of interest on debentures tnan 7£ per cent, per annum, free of income tax. For setting aside the residue for any expenditure which the company requires : to make provision for, including piovision for depreciation of the assets or for a sinking fund to cover the total capital expenditure of the company, or a fund to meet oontingenciee a& the company may think fit. ; The company U not permitted to accept contribution from any person or body other than the Post and Telegraph Department, except in accordance with a special agreement. It must keep proper books of account, and the Minister may bare the books examined and audited as ne may consider necessary. If, at the end of five years, the agree,inent is not renewed, it is agreed that the Crown will purchase from the company the whole of the plant belonging to the company, and at the same time in. proper working order, at price to be agreed upon, and if an agreement cannot be reached the price shall be determined by arbitaration. Provision is made that the company snAll indemnify the Government against all actions which may be brought or made by any person in respect of any injury arising frbm any act of the company or its t agents licensed or permitted by their license. This indemnity does not,. extend to any claim which may be made upon the Government in respect of any patent h urbher provisions are tbat the com. ptmy must submit to the Minister annually a copy of the profit and loss account m respect, of each station and a balancesheet of the company's financial obligations for each year ending on March 31st.' . There are the usual default clause* providing that the - Minister may at any time thereafter, by notice in writing, determine the agreement. DIFFICULTIES MANY

Commenting on the agreement. Sir James Farr remarked that much criticism had been levelled at the department owing to the delay in reaching an agreement, and because : of the fact that no announcement had been made up to the present It was quite evident, he said, that those who had been responsible tor the criticism had not realised' the difficulties which' had arisen over the matter. It was always the case that when the Crown entered into a contract with private individuals very stringent conditions must be laid down in order that the Government | might be in a strong ppsition. This was liable to cause negotiations to be lengthy. “I am glad to announce," said Sir •James, “tnat the terms of the agreement have been fully approved as being a good contract for the Dominion by the broadcasting syndicate with whom negotiations first began, but with whom no agreement could be arrived at. I would like especially to take this opportunity of publicly acknowledging the efforts and assistance given by the syndicate in endeavouring , to establish an improved broadcasting service. “It h»g been suggested that broadcasting is being handed over to a monopoly. This is quite contrary to fact. The whole scheme is based on the co-opera-tive system, each party interested doing his best to assist the other fellow. If this principle be. maintained, I venture to predict that before long a thoroughly satisfactory service will be brought about. “With reference to the present stations," continued the Minister, "it ; is hoped that arrangements will be made for the existing broadcasting stations to continue operations until the new stations are.erected. The department is T at present paying a subsidy out of the listeners' fees to these stations at the rate of «£ls per week to each station, or at the rate of -23120 per annum. If the present stations v decide not to continue, the agreement provides that the Minister may require thetrustees or the company, within three months, to purchase from the owners willing to sell any apparatus that at the date of the agreement is duly licensed and subsidised by the department for broadcasting. It is prob. able, however, that the owners of tho present stations will ~nue broadcasting under the present * bonditidns until the new compojiy takes charge of broadcasting in six months' time. INCREASED FEE; ; /'Some criticism has been levelled at the department because of the fact that the full fee of «£1 10s has been imposed since April Ist last, although the new broadcasting scheme is not in operation. Those who criticise should appreciate the fuct that the •higher tee must be paid from the dale on which the new regulations conic .nto force. It is unreasonable to

expect that the increased fee should bo charged only from the date on which the new high-power stations commence operations. The point must not .be overlooked that for two years listeners have received the .benefit of: the present broadcasting service without any payment whatever, except the 5s license fee. The existing broadcasting stations have carried, on .operations in the face of great difficulties, and at considerable cost, without demanding assistance from .listeners. As already stated, all tho funds available are at present being paid out as subsidies to the existing stations, and this policy will continue until the new company takes over control.” Finally, Sir James observed that he was satisfied, that the Government had a good contract. They were fortunate in that substantial men had come forward to undertake the broadcasting service. The term guaranteed by the Government was not a long one—namely, five years. At the end of that period both the Government and the company would have gained most valuable experience in the new venture.