The State's second largest cable and MMDS television operator has started legal action against the State, seeking up to £100 million in damages for the Government's failure to shut down illegal television deflector operators over the last nine years.
Television deflector licences have become a serious political issue with Mr Tom Gildea, the independent Donegal South West TD, claiming last week that discussions about them with the Minister for Public Enterprise, Ms O'Rourke, were ongoing and that substantial progress had been made. The Minister's spokeswoman said later there had been "no formal meetings" with Mr Gildea on the matter, and that the Minister had no powers in the granting of deflector licences.
Irish Multichannel, which provides a television service to 150,000 viewers, has begun preliminary proceedings in the High Court. The case is expected to be heard later this year.
Cable Management Ireland, which has 65,000 customers, is also expected to follow suit, according to industry sources. Its licence area includes parts of Donegal where up to 60 small illegal deflector systems are operating. A spokesman for CMI was unavailable last night for comment on the matter.
Irish Multi-channel and the other cable and MMDS operators were awarded exclusive licences for geographic regions in 1990 and invested millions of pounds in establishing their cable and MMDS networks.
However, illegal deflectors were allowed to continue operating, undermining the commercial operations of the licensed firms. Irish Multichannel is believed to seeking between £60 million and £100 million in damages as a result of the State's failure to honour the conditions of the licences it granted, and shut down the deflector operators.
The company's franchise area included the cable operations in Cork and Limerick cities and MMDS and cable operations across Munster, in the midlands and into south and north Leinster.
The firm's director of regulatory, legal and public affairs, Mr Willie Fagan, confirmed its legal action for damages had commenced. But he said the firm wanted to concentrate on the future, and was in the process of investing over £100 million to develop a digital television system and broadband communications network for 80 per cent of the country.
The Office of the Director of Telecommunications Regulation, Ms Etain Doyle, is expected to recommend that the illegal deflector operators receive temporary licences until the new digital service is launched later next year.
Most of the major cable and MMDS operators have been awarded new licences for digital cable and MMDS services.