CABLES AND WIRELESS

Waikato Times, Volume 104, Issue 17466, 28 July 1928, Page 7

CABLES AND WIRELESS

MERGER PROPOSALS. CONFERENCE RECOMMENDATIONS. BEST SOLUTION OF PROBLEM. WELLINGTON, Friday. The Prime Minister to-night released for publication a summary of the report of the Imperial wireless and cables conference. No information can yet be made available as to the attitude of the New Zealand Government pending the decision of all other Governments concerned, but a statement on the subject will be made in the House later. The report covers eight pages of closely typewritten matter, and concludes with the following recommendations:— The Proposed Company. Recommendation 1: The Merger Company.—The merger company to be formed will acquire as from April 1, 1928, all the ordinary shares of the Eastern, the Eastern Extension, and the Western Telegraph Companies, and all the ordinary and preference shares and debentures (if any) of the Marconi Wireless Telegraph Company. Recommendation 2: The Communications Company.—There will also be formed a communications Company, to which the cable and the Marconi companies will sell as at April 1, 1928, all their communication assets in exchange for shares. The communications company will therefore hold all the communications assets of the cable and the Marconi companies except in as far as these belong to subsidiary companies in which the cable and the Marconi companies' holding is less •than 100 per cent. The communications company will also acquire the Government cables and hold a lease of the Post Office beam. The capital of the communications company is not to exceed at its inception £30,000,000. Recommendation 3 : Terms of transfer of the Governments' cable and beam assets. The communications company to take over as from April 1, 1928 the Pacific Cable Board's cables, the West Indian cable, and the wireless svstem worked by the Pacific Cable Board, the Imperial Atlantic cables, and the lease of the Post Office beam service (including provision for the transfer to the company of the existing staffs), on terms to be arranged. The beam service to be leased for 25 years at a rental of:—(a) A basic sum of £250,000 per annum; (b) as from April 1, 1931, an addition equivalent to 12 per cent, on any increase in the company's profits (from communications services) above the standard revenue (s-ec recommendation 6), payment of £60,000 to be paid in such manner as may be agreed; the communications company to undertake to meet the annual service of the outstanding dent Of the Pacific Cable Board, as on April 1, 1928, and to pay in addition a capital sum of £517,000 for the Pacific cable, together with interest at 5 per cent., as from April 1, 1928; to pay £300,000 for the Wcs 1 , Indian cable and £450,000 for the Imperial cables. The rental payable by the communications company and the service of the Pacific Cable Board debt will be guaranteed by the merger company. Direction and Management. Recommendation 4: Direction and management of the undertakings conCCl . n ,, ( l__The board of directors of the merger company, the communications company, the cable and the Marconi companies will be identical lwo of the directors, one of whom shall be chairman of the communications company, to be persons approved by His Majesty's Government on the suggestion of the cable companies. Recommendation 5: Revenue of the communications company.—A standaro net revenue of £1,865,000 (exclusive of non-telegraphic investment revenue) from the communications company services to be fixed for the purposes of the company- All net revenue from communications service in excess oi that sum to go, as to 50 per cent., to the company and, as to 50 per cent., to the reduction of rates or such oilier purposes as the advisory committee (recommendation 6) .may approve. If additional capital expenditure is Incurred by the communications company in relation to traffic, there shall be- added to the above initial standard revenue an appropriate charge for interest at such rate as may later be agreed. Recommendation 6: Control by the Governments concerned —The .communications company to consult in regard to questions of policy, including any alteration of rates, an advisory committee which we suggest should include representatives of the Governments participating in this conferenceto whom representatives of other parts of the Empire may be added as required from time to time, with the approval of the Governments concerned. No increase of the rales prevailing at Uie date of the formation of the communications company to be made except with the assent of the advisory committee. Safeguards and Conditionc Hecommendation 7: Additional safeguards and conditions —It is to be agreed (a) that British control of all the companies must be guaranteed; (b) that the Governments may assume control of the cable and wireless systems in time of war or other national emergency; (c) that the fighting services are entitled to build and work cable or wireless stations for their own purposes, but not for commercial purposes. Recommendation 8: Telephone services.—The Post Office in London will rcserv-e the right to conduct external telephonic services of Great Britain, but will agree with the company on the terms' on which it will have the right to use the company's wireless stations or portions thereof for telephonic purposes.

The report says:—After an exhaustive study of all the factors involved and consultation with all the available interests concerned, we feel convinced that the scheme we have propounded provides the best solution of what is a problem of the first importance to all parts of the British Empire. The scheme of service is not only a matter of common interest, but possibly a linkon which more than any other the several parts of the Empire depend for mutual intercourse. Our recommendations, will, we behove, establish this service on a firm foundation, lead to its development and provide for its administration in a manner well calculated to bring to the communities which it is its function to serve all the bonc--11 Us which naturally flow from a rapid cheap and efficient system of communications- •