The Packer-Murdoch-Telecom-led consortium has launched a federal court bid to overturn the allocation of two pay TV licenses.

The legal action, lodged Friday by News Limited’s attorneys, is based on the relationship between the current licensees, their respective levels of foreign ownership and the amount of disclosure to the Australian Broadcasting Authority.

Seven and Ten Networks are also members of the consortium, but with smaller holdings.

Named in the suit are the Australian Broadcasting Authority; the A licensee, Century Communications-Continental Venture Capital; and the B licensee, Australis Media Ltd. and its shareholder-financier, Lenfest.

News claims that the ABA was unable to properly investigate suitability of the licensees or their compliance with pay TV legislation.

Response from the three was immediate denial. “We went out of our way to cooperate with the government bodies involved in the (licensing) process,” said Australis managing director Neil Gamble.

Continental Venture’s Vanda Gould claimed they had complied with the legislation, adding “I don’t know what they are complaining about.”

Brian Johns, chairman of the ABA, stated: “(Our) considerations are contained in the two reports on the investigations leading to the allocation of the licenses. (That) process was prolonged and public, but the ABA will look at the terms of the action in the light of any new information and the Broadcasting Services Act.” The ABA declined further comment.

Industry observers here were surprised at the move, especially in view of its foreign interest angle. They point out that News Corp is only technically Australian (U.S. citizen Rupert Murdoch being afforded honorary Australian status), while the Ten web is 20% owned by Canadian Izzy Asper’s Can-West which, through debentures, actually controls a 57% economic ownership.

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