Melita, Go act like 'cartel'

House Social Affairs Committee Edwin Vassallo yesterday accused Melita plc and Go plc of being "a cartel undefined", in that instead of agreeing between them they were comfortable with being in disagreement because they were both dominant in the market.

The end result was the same, he said, with the Maltese sports viewing public having to pay both companies if they wanted to watch the whole sports package on television.

During a four-and-a-half-hour meeting of the committee, Melita's head of legal and regulatory affairs Theresienne Bezzina agreed that as a gesture of goodwill towards the Maltese public the company would waive the exclusivity of a quarter-final match and allow Public Broadcasting Services to screen it live.

The only sticking point remains that Public Broadcasting Services must still seek the clearance of the European Broadcasting Union, which had imposed on PBS that either it sells the rights to 16 matches out of 64 or find itself in a position not to broadcast any at all.

On Sunday, many England fans who do not subscribe to Melita were left high and dry for the match against Germany after PBS sold the exclusive right to air it to the cable company. The Italian station Rai, which is broadcasting many of the matches, did not show it either.

Nationalist MP David Agius has been campaigning for unrestricted access to TV football after Melita retained the rights to the Champions League next year and Go won the rights to air the English Premiership and Italian Serie A. Yesterday's meeting of the SAC, which he instigated, was called to discuss how the two providers can share football rights.

Besides Mr Vassallo, the meeting was also attended by Mr Agius, Frederick Azzopardi and Karl Gouder, and Labour MPs Chris Cardona and Chris Agius. Sitting in front of the committee's table were a total of 19 persons, representing Go, Melita, PBS, the Broadcasting Authority, the Malta Communications Authority, the Consumer and Competition Division and the Department of Commerce.

At one point, Broadcasting Authority CEO Pierre Cassar pointed out that, following next year's switchover to digital TV broadcasting in Malta, the Maltese viewer could only count on being able to watch the six local stations. A question mark still remained on the reception of Italian television.

Mr Vassallo said the committee was seeking to reflect on market realities while safeguarding the consumer's rights.

Relating what had happened in talks between Melita and Go to discuss the possibilities of coming to an agreement on the sharing of premium sports content, Dr Bezzina said Go had focussed more on the sharing of infrastructure, which in Melita's view was not required to provide consumers access to premium sports channels. Go's statement that it had a competitive disadvantage due to the infrastructure was unrelated to the wholesale of premium channels. The content was unique, but the infrastructure could be replicated.

Go Group chief finance officer Edmond Brincat said Go had wanted to talk on four major points: sharing access to sports, access to the movie channels, the facility for subscribers to disconnect, and the infrastructure. Melita had replied that they were willing to talk about access to sports immediately, about the movie channels later, about the setting up of a joint committee to discuss disconnection facilities, but never about sharing the infrastructure. Melita kept boasting of its investment of millions of euros in infrastructure, but it never said it had used Go's ducting infrastructure under roads. Contrary to what Melita said, Go's infrastructure was not inferior.

Melita had first wanted to invest in content, now it wanted to share it at a substantial discount from Go, although it was well familiar with the composition of pricing.

When Melita had decided to pick the Germany-England match for exclusivity of broadcast, it had denied access not only to PBS viewers but also to their own subscribers who did not have the Melita payment system.

Dr Bezzina said the decision on which match to broadcast exclusively had been taken after the tendering process sometime in March, well before the World Cup draws had been done. Nobody could have known which teams would have qualified from the groups section.

She said the present situation showed the need to think of alternative arrangements for such future situations of premium content.

Go countered that, according to The Times, Melita had bought the rights to broadcast the Germany-England match after the group placings had become known.

PBS acting chief executive officer Natalino Fenech explained that the broadcasts had been subsidised by the EBU, which had made special arrangements for Malta with FIFA. It had laid down a condition that either PBS sell the rights to 16 matches, including a quarter-final, or find itself in a position not to broadcast any matches at all.

When Melita had selected match 59/60 for exclusive broadcast, nobody could have foreseen which countries would be playing. Melita had paid €30,000 per match.

Mr Cassar said that after what had happened in the 2006 European Championship, when Melita had had exclusive rights, the BA had issued a legal notice on which events of national importance had to be broadcast.

The free-to-air concept was not restricted to Malta, but also to Italy. Faced with the situation, the BA had felt that it was better for PBS to give up one match and be able to broadcast 46.

All in all the Maltese televiewer had been and was being given satisfactory service. It had been just one goal, the American one against England, that had changed the whole situation of what could have been otherwise.

To a question by Labour MP Chris Agius as to whether the decision on the "exclusive" quarter final had been taken or was still to be taken, Mr Cassar said the situation could be known only at the end of the eight matches in the second round of the World Cup.

Mr Brincat insisted that the record be put straight on whether The Times was right or wrong in what it had written. PBS had paid part of the World Cup rights from public funds; was the government ready to subsidise the payment for rights to the Premier League and Serie A?

Mr Fenech said the EBU had asked PBS if it wanted Rai to be stopped from transmitting to Malta, but after talks with Melita, PBS had chosen not to. Broadcasting permission had, however, been denied to other countries.

Dr Bezzina said it had just been confirmed to her that Melita's choice of which match to broadcast exclusively had been made after the last 16 had become known.

When Mr Agius asked if PBS could have denied Melita the right to broadcast exclusively the Germany-England match specifically, Mr Fenech replied that Melita as the prime bidder had the right of first refusal.

Once Melita's decision had been taken to waive its exclusivity to one quarter-final, it was said that there was no question of a refund to Melita customers who had already paid for the service because they would still be seeing what they had paid for.

Chairman Edwin Vassallo said it appeared that the consumer did not have much protection from the Malta Communications Authority.

Mr Agius said he would leave no stone unturned to get to a solution of the Melita-Go impasse, and that included taking the matter to the EU and pressing for legislative change. Today, the consumer felt let down because competition had not brought lower prices but double payments.

Mr Gouder said it would seem that the only solution was an imposed one. If that was not possible, the process of change should be started as soon as possible.

Dr Cardona asked if the Malta Communications Authority could not have seen developments coming before Go had invested. Why had the authority not imposed that both companies use the same boxes? Had it examined the rights' costings? And what if a third operator came along to join the fray? Malta obviously needed a complete reform of the situation.

At the end of four-and-a-half hours of discussion, Mr Vassallo said the committee had decided it was no use trying to conclude immediately, but to further explore any possibilities of a solution. In the meantime, any party was free to decide whether to ask the Copyright Board to investigate the situation or bring to bear any other legislation.

The committee was adjourned to July 7.