I welcome Mr. Michael O'Keeffe, chief executive, Broadcasting Commission of Ireland, and invite him to introduce his officials.
Broadcasting Commission of Ireland Annual Report and Accounts 2007.
Mr. Michael O’Keeffe (Chief Executive, Broadcasting Commission of Ireland) called and examined.
Mr. Michael O’Keeffe
I thank the Chairman. With me are Ms Celene Craig, deputy CEO and director of broadcasting, and Ms Margaret Tumelty, director of corporate services.
I welcome Ms Susan Fleming from the broadcasting division of the Department of Communications, Energy and Natural Resources.
Mr. Dermot Keane
I am from the Department of Finance.
I should know Mr. Keane by now. I apologise. He regularly attends committee meetings.
The witnesses should be aware that they do not enjoy absolute privilege. Members and witnesses should be apprised that as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons who are identified in the course of these proceedings. Notwithstanding this provision in the legislation, I remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses, or an official either by name or in such a way as to make him or her identifiable.
I ask Mr. Buckley to introduce the accounts of the Broadcasting Commission of Ireland.
Mr. John Buckley
The functions of the Broadcasting Commission of Ireland include licensing of independent broadcasting services at national, regional and community level; since 2001 licensing of additional television services on digital, cable, MMDS and satellite systems; developing programming and advertising standards codes and rules for licensed services; and monitoring compliance with statutory and contractual obligations.
The Commission introduced two new codes in 2007 — a general advertising code and a code of programme standards. The role of investigating complaints in broadcasting rests with an independent regulator, the Broadcasting Complaints Commission. Legislation currently before the Oireachtas proposes a new broadcasting regulation regime to extend to all broadcasters.
The Commission spent €5.8 million on its regulatory activities in 2007. In addition, it administered expenditure of €16.8 million through the broadcasting fund. In 2007 €21 million of assistance was allocated from this fund of which more than €18 million was for television production. A total of €15.8 million of the broadcasting fund expenditure went on grants and awards to programme makers. In general, these are directed at programmes covering Irish culture, heritage and experience as well as adult literacy in both the Irish and English languages. The Commission also seeks to develop the archiving of programme material produced in the State. The broadcasting fund has now been in operation for three years. The governing legislation provides for evaluation after the first three years of operation. I understand such an evaluation was completed in late 2008 and the report was sent to the governing Department.
I thank Mr. Buckley. I ask Mr. O'Keeffe to present his opening statement.
Mr. Michael O’Keeffe
On behalf of the BCI, I thank the Chairman and the committee for inviting us to attend and make a presentation. We submitted the information requested by the committee and are happy to answer any questions that might follow this opening statement which will address the achievement of our key objectives for the organisation in 2007, the operation of the internal audit and the development of the risk assessment process.
I shall start with the achievement of the strategic objectives. These come under four headings and I shall run briefly through them. The first is excellence in broadcasting and the first element of that is policy development. We would describe that as being significant for the Commission during 2007. The key objective was the introduction of a policy on the licensing of digital terrestrial television, DTT, multiplexes which is required under the Broadcasting (Amendment) Act, introduced in April 2007. As was referenced, we introduced new codes on general advertising and programme standards. These were launched following a significant period of consultation with all the key stakeholders during the previous year and have been widely accepted across the broadcasting sector along with the other codes we introduced in previous years. I include the children's advertising code, and what we describe as "access rules" which relate to subtitling and other services.
A secondary area under policy is training and development and media research. We introduced a revised policy in both areas and a new policy on media research in 2007. I shall make an additional reference on media literacy. One of the research schemes that we funded from the bursary concerned an examination of media literacy in Ireland which is part of the broadcasting Bill currently before the Dáil. We will release shortly a report on the outcomes of that which I believe will be very beneficial for the media literacy area.
On the compliance function, which is significant, we introduced a new compliance plan in respect of all our services. Obviously, as the number of services grows the compliance area must be considered. We introduced a new plan in 2007 that has been in operation since.
On the radio licensing front, a very important aspect of our work, we awarded contracts in 2007 to three regional youth services which have all come on stream in the past 12 months. They are Spin South West in the south and mid-west region, iRadio in the west and north west and iRadio in the midlands and north east.
A quasi-national religious service is due to come later this year as is a multi-city service for over-45s. Members might be aware that the latter has recently commenced broadcasting as 4FM in a number of areas around the country. We also completed three phases of community licensing and licensed a television service for community service in Dublin and awarded a contract for Cork. We hope this will come on stream later this year.
Mention was made of the Sound and Vision funding scheme which has been a considerable success. There was an allocation of €18 million in the year under review for 100 new television programmes and €2.8 million to 205 new radio programmes. The presentation mentioned some of the highlights: "The Running Mate", an Irish language political drama series; series 2 of "Aifric", an Irish language teen soap that has won a significant number of awards in recent years; an animation series; "Fluffy Gardens", which has aired on RTE to great success; and "Red Mist", a documentary about the famous Saipan incident with which I am sure all members are familiar.
In radio, I highlighted some programmes. One is "The Story of the Jeanie Johnston”, made by Radio Kerry. WLR FM ran a series of six programmes on the development of Waterford Glass, which, again, was a considerable success.
On the organisation and development front, we looked at a two-phase plan that covered the introduction of cross-functional working, performance management, skills analysis and management training. This has been an important forerunner in preparing the organisation for the transformation into the new Broadcasting Authority of Ireland. There was much more activity in that area during 2008 as we prepared for the introduction of the BAI. If I am called as a witness before the committee next year I will have much more information on what we have done in this area.
Under the heading of relationships, there are two particular areas on which we focus. I refer to the area of strategic communications policy. We considered a new policy which was devised and implemented during the year. The focus was on the provision of information on communications initiatives to key sectoral stakeholders. Relationships were developed and enhanced with the public service broadcasters with the establishment of the broadcasting authority of Ireland in mind. We will have a greater relationship with public service broadcasters under the new regime. We also have ongoing liaison with our fellow regulatory authorities ComReg and the Competition Authority.
I refer to financial management, internal audit and risk management. Expenditure was controlled at under 90% of the allocation published in the Estimates. That was done in line with the delivery of programmes and objectives achieved within the allocated budgets. We submitted our accounts to the Comptroller and Auditor General which were ready by the end of January. The Comptroller and Auditor General's people were in during February and no significant issues arose as a result. There were a number of minor issues and they would have been immediately addressed and finalised within the year.
The Chairman requested in the letter that we provide a comment on internal audit. We have carried out an internal audit. While we referred to contracting Mazars for a three-year period, prior to that we would have had another internal audit and I am unsure if that came across. Internal audit has been part of our process for many years. In any event, Mazars were contracted for a three year period. I refer also to the finance and audit sub-committee which operates and keeps a close watch on all matters financial, including internal audit.
The audit sub-committee is comprised of members of the board who have experience in business matters. The plan involves the undertaking of three pieces of work per annum, usually two reports and one follow-up. I mentioned the holding of a risk workshop, to which I will return because we will discuss it later. In the past two years, we have examined the administration, starting with the funding schemes. Significant funding is allocated for training and development and the sound and vision scheme, by its nature, has significant funding. We examined the review of the processes and they worked well. We then examined our budgeting processes and a review of the systems and processes to support business planning and performance management. That took place in the second year. In addition, during that year we carried out follow-ups, the first of which took place in 2008 on the funding scheme. As a general observation, the internal audit has evidenced broad satisfaction with the processes in place and any recommendations included in the report have been implemented as required.
Finally I refer to risk assessment. This was given priority by the board in 2007 and resulted in the development of a risk register, the provision of training to all senior management staff and the implementation of a review process. The first element was the training provided by Mazars, the external auditors, which examined our risk environment, objectives, and potential gaps which could impact on the ability to achieve these objectives. Following that process we drew up the risk register. There was such a register for 2008 and we reviewed another for the beginning of this year. They reflect the organisation's objectives and we review these at a senior management level on a quarterly basis. That is my opening statement.
I thank Mr. O'Keeffe. May we publish the statement?
Mr. Michael O’Keeffe
Yes.
I welcome Mr. O'Keeffe and his officials and I thank Mr. O'Keeffe for the opening statement. The Comptroller and Auditor General briefly touched on the advertising code introduced, for which the Broadcasting Commission of Ireland is responsible. An area which caused concern at the time and which resulted in my first interaction with the commission was in respect of religious advertising. There seems to have been a disconnect between the code and what could be done. Certain words and religious symbols were not allowed to be used in certain advertisements. What is the position with respect to the code? Has it been revised? I heard this was the case. Will Mr. O'Keeffe comment?
Mr. Michael O’Keeffe
I could spend a good deal of time on the matter but I will not do so. The position is that the wording of the 2001 Act left some ambiguity. The 2001 Act provided that there would be permission for religious advertising to be broadcast which would not encourage people to join a particular religion. However, the structure of the wording left some gaps. The Veritas issue came to the fore before Christmas and created a problem. We suggested a revised wording which would reflect the spirit of allowing religious advertising to be broadcast without upsetting the principle that it should not be towards encouraging people in respect of the merits of any particular religion. My understanding is the Minister has accepted that wording and that the Bill is now on Report Stage. He may be referring to this topic as we speak.
Mr. Michael O’Keeffe
My understanding is that he has accepted the wording which will permit religious advertising of products and services to be broadcast. There is still a prohibition on encouraging the merits of a particular religion. When the Bill is enacted the situation will change.
Is Mr. O'Keeffe confident there will not be a situation in which the word "crib" cannot be used?
Mr. Michael O’Keeffe
We did not prohibit the word "crib" but I have no wish to go there.
Mr. Michael O’Keeffe
We are confident that such issues will be addressed through the introduction of the amendment.
I do not wish to deal with policy matters. We are all conscious there are reasons for the code, but it is necessary that in the implementation of it and the way it is monitored that we are seen to take a pragmatic approach.
Mr. Michael O’Keeffe
Yes.
We have no wish for a situation such as that in certain states in America whereby one cannot mention anything and it is forbidden to use such a word as "Hallowe'en". No one wishes for us to go down that road.
I refer to the opening statement and the organisational development of the Broadcasting Commission of Ireland. Mr. O'Keeffe stated that development was taking place and the organisation has been prepared for the transformation into the new broadcasting authority of Ireland, a significant step forward.
Mr. Michael O’Keeffe
Yes.
Will Mr. O'Keeffe expand on the work done within the Broadcasting Commission of Ireland to date to prepare for its transformation into the broadcasting authority? Will he outline what additional roles the organisation will have when it becomes the broadcasting authority of Ireland and how it is set up to do so? Is the commission in a position to take on the role now?
Mr. Michael O’Keeffe
I shall take it as far as I can and if the Deputy has any further queries we can examine them. The key change from an organisational development point of view is the development of a change strategy, comprised of ten aspects. We considered the organisation and the structure under which we would operate in future. We are changing the nature of working from a divisional to a matrix structure. As an organisation, we are conscious there is an issue in terms of additional numbers in the public service. We will take on additional responsibilities, but we may have difficulty in terms of additional resources. We have tried to utilise this matrix approach to examine the way we work and put the resources in the areas where they are needed and prioritise particular issues. That is the first step which we have completed. We introduced the idea to our staff and continue to do so. A staff member will not be confined to one area. Staff will work across the organisation depending on the priorities.
Another area we are considering and preparing for is the impact of the legislative changes from a legal perspective on the work we do. That will also feed into the design and work processes we undertook. We are also examining process improvement. We are taking all the processes we operate in respect of such matters as compliance, licensing and how we deal with our boards, and we are examining ways to make them more effective, or as effective as they can be.
Internally, we are looking at communications, the culture of the organisation and how we use our people. On the outside, we look at how we deal with and interact with our stakeholders. That obviously includes the public broadcasters because, to some degree, they are new. We also look at the way we operate and liaise with community and commercial operators.
There are a number of issues on the financial side because we will be funded through a levy model. We are currently developing that system so that when the BAI board is established we will be able to go to it immediately with proposals on the levy, because clearly one of the funding problems we have is that from the minute BAI is established we do not get any further Exchequer funding. Therefore, we need the BAI levy model to be in place very quickly and we have engaged in consultation on that over the last nine months. We engaged in initial consultation with broadcasters and we are now working up some models which we will put to the BAI board once it is established.
Can Mr. O'Keeffe expand on the levy system? The public broadcasters will also be included, which would be a major addition to BCI's area of responsibility.
Mr. Michael O’Keeffe
It will. We are trying to make sure the system will be fair. It will cover all broadcasters. They will all have to contribute. The Act as it is currently constituted provides that some element of the licence fee can be utilised for the levy. We are looking at a model that is as fair as possible to all of the various practitioners but that also gives us sufficient funding to operate on that basis from 2010 onwards, because the board will probably not be established until later this year. We have been doing a lot of work on that and are in a position where we should be able to go to the new BAI board at a very early stage to move to that very quickly.
There are other issues such as our data and file management and our IT systems. We are looking at those to make them more effective and that change is about making the organisation as effective as possible. That change process has been in operation since last September and we intend to run it until and beyond the establishment of the BAI.
The second element of the question concerned the new functions. That is one of the aspects we are looking at and the interaction with stakeholders is part of that as well.
How many staff are in the organisation?
Mr. Michael O’Keeffe
We have 42, with 32 full-time and ten part-time.
Obviously Mr. O'Keeffe will assess the new responsibilities he will take on. He also mentioned resourcing.
Mr. Michael O’Keeffe
Yes.
Resourcing may be an issue with taking on the new role. Has Mr. O'Keeffe scoped that issue?
Mr. Michael O’Keeffe
We have scoped it. We undertook an exercise with PricewaterhouseCoopers last year. It undertook a review of the structures and resources and identified the number of resources we would require to work within the new legislation in the best manner possible. A report on that has gone to our parent department. There is an issue around additional resources and that is something which will have to be discussed.
Has BCI identified a need, putting aside the current situation?
Mr. Michael O’Keeffe
Yes.
Has it identified a need for extra resources and gone to the Department?
Mr. Michael O’Keeffe
We have, yes.
Regarding the digital services Mr. O'Keeffe currently has responsibility for, does it include digital service providers?
Mr. Michael O’Keeffe
It will include the terrestrial providers.
Mr. Michael O’Keeffe
The 2007 Act requires us to licence digital terrestrial television multiplex operators, which was the priority and then, ultimately, digital radio licences as well. That is seen as a longer term project.
It does not apply to the operators themselves, according to the Department for Communications, Energy and Natural Resources. Is that the case?
Mr. Michael O’Keeffe
The way it works is that we give licences for a multiplex operator which will then carry a number of services. Any existing services will be carried and will already have a licence from ourselves or the public service broadcaster. Any additional new Irish services which might come on stream would get a separate licence. Again, that would be from ourselves.
Mr. O'Keeffe mentioned interaction and relationships and that is important. I know BCI has no role regarding RTE, but what interaction has it had now with a view to its new role? How is that relationship working?
Mr. Michael O’Keeffe
There would have been some interaction under the 2001 Act because RTE and TG4 must comply with the codes and standards such as, for example, the advertising programming access rules or rules on children. There would have been interaction there. RTE and TG4 are also responsible to the Broadcasting Complaints Commission. There has been a relationship built up in these areas and they have been in existence for a number of years.
In the past year or two we have had ongoing dialogue. I had meetings with the director general on a number of occasions. Under digital terrestrial television, where there is a relationship because RTE has an obligation to provide the public service broadcasting multiplex, we had an ongoing relationship with the director general and the director of RTENL on that. That is something which has been developed over time.
In anticipation of the broadcasting Bill passing we need to develop it further. We have had preliminary discussions with RTE about it.
The delegation has responsibility for its statutory obligations and its licences, such as compliance with the terms of the licences.
Mr. Michael O’Keeffe
Not with the public broadcasters, no.
What about the advertising side and programming?
Mr. Michael O’Keeffe
Not programming.
What about Irish language and children's elements, as Mr. O'Keeffe mentioned?
Mr. Michael O’Keeffe
It is on the code of standards that we currently have. For example, if a complaint on programming standards is upheld by the BCC we would be required, if RTE did not take action, to ensure it took action.
I will not delay on this. I wish to return to the monitoring of the licence services. If there is a situation where the BCC is involved, how do we track breaches of advertising or programming standards by licence holders? What type of numbers are we talking about, year on year?
Mr. Michael O’Keeffe
I would make a general point that compliance with obligations is very high across the broadcasting sector. There is a culture of compliance within the broadcasting sector and it is important to put that on the record. In terms of tracking, we have a public file system in place which developed the compliance plan I mentioned in my opening statement. That included the development of a public file and any breaches of programming or advertising that occurs by stations will be recorded within that file. Members of the public have access to it.
The obligations of different stations are contained in the schedules to their contracts. Any programming obligations of stations are included.
Compliance is very high.
Mr. Michael O’Keeffe
It is important to say it is a compliant sector and I emphasise that point.
The sound and vision funding scheme was covered by Mr. O'Keeffe and I agree with him. I commend him on that because a number of the programmes he mentioned, such as "The Running Mate", were watched by many of us. I do not know who wrote that programme because it was not very far from the truth. The Irish language side, with programmes such as "Aifric", has been very successful in allowing independent programme makers to air their talents.
I am interested in 2008. Last year, 2007, €18 million was allocated to 100 new television programmes and €2.8 million was allocated to radio programming. What was the position in 2008?
Mr. Michael O’Keeffe
We did not give out as much money.
I did not think so.
Mr. Michael O’Keeffe
We had been spending the backlog, which almost came to an end in 2007. That was a very good year where we gave out a very high proportion of money. We gave approximately €10 million in 2008. Television probably got a better deal and more money in the early years. That ratio has changed.
It got six times more in 2007.
Mr. Michael O’Keeffe
Yes, but the ratio in 2008 will probably be 80:20. The cost structure for making programmes would be 85% for television and 15% for radio. In the early days it was probably skewed too much to television. We have tried in recent years to bring it back to give radio a fairer proportion. Last year €2 million was allocated to radio and we will run two rounds on radio this year and will allocate more or less the same amount.
It will be €10 million in 2009 as well.
Mr. Michael O’Keeffe
That is our plan. We have some backlog.
In 2009, and subject to whatever else happens, the Broadcasting Commission of Ireland, BCI, is considering similar funding of €10 million. Is that correct?
Mr. Michael O’Keeffe
There is a proposal in the broadcasting Bill to increase the percentage from 5% to 7% which will increase the funding to approximately €15 million per annum, if that is accepted.
We have met other agencies which have given extensive training in radio and television production. Does Mr. O'Keeffe know how many people are employed in the independent radio and television production sector?
Mr. Michael O’Keeffe
I do not have that figure. The independent radio production sector probably did not exist before this scheme. This was the forerunner to the development of the sector which has been growing significantly. The Bill also contains a proposal to require RTE to provide a particular allocation to the independent radio production sector. This scheme has been of great benefit to both sectors.
That is what I am getting at. The sector has been very successful. I would like to see that continue. If it was possible, without imposing too much work on Mr. O'Keeffe and his organisation, could he give a note to the committee quantifying the levels of employment? It would be useful to let people know this is happening.
Mr. Michael O’Keeffe
Yes.
The Broadcasting Commission of Ireland, BCI, and the Broadcasting Complaints Commission, BCC, exist now but when the Bill goes through, which should be in approximately ten minutes' time, there will be a broadcasting authority. Will the two existing bodies be subsumed into the new body?
Mr. Michael O’Keeffe
That is correct. The two existing bodies will be subsumed and the broadcasting authority of Ireland will be the policy body with two statutory sub-committees, the contracts awards committee, to award licences and the compliance committee which will effectively take on the role of the Broadcasting Complaints Commission and elements of our work.
The BCI has approximately 42 staff.
Mr. Michael O’Keeffe
Yes, 32 full-time and ten part-time.
Will that become the staff of the new authority? Will it also provide the administration and management of the two sub-committees? Will there be any increase in staff numbers?
Mr. Michael O’Keeffe
We will staff the new authority. We would argue that there is a requirement for some increase but we will have to discuss that with the Department.
More in hope than expectation.
Mr. Michael O’Keeffe
We live in the same world as the Deputy.
What is the overall funding?
Mr. Michael O’Keeffe
The Exchequer funding up to this year was €6.4 million or €6.5 million. This year we have been cut by 25% because it was envisaged that the levy would be in place for the final quarter.
Will it disappear entirely from 2010?
Mr. Michael O’Keeffe
Yes.
Then it will be an independent body.
Mr. Michael O’Keeffe
Yes.
Where will the percentage come from?
Mr. Michael O’Keeffe
For the commercial sector it will be a percentage of advertising revenue.
I see.
Mr. Michael O’Keeffe
Whatever way we work it out, it will be a percentage of that. For RTE it will be part of the advertising revenue and part of the licence fee.
I note that the BCI had a performance-related award scheme. Does that still exist or is there a new approach to that?
Mr. Michael O’Keeffe
It has come to an end.
The BCI is not unusual in that. There are two boards with 11 members on the board of the BCI and nine on the BCC.
Mr. Michael O’Keeffe
There are ten on the BCI and nine on the other.
Does that number include the Chairman?
Mr. Michael O’Keeffe
No, the ten includes the Chairman.
I see 11 on a list here but I assume there is some crossover or duplication, one for the beginning of the year, one for the end.
Mr. Michael O’Keeffe
One departed.
Ten sit on the board of the BCI. How many sit on the board of the BCC?
Mr. Michael O’Keeffe
I think there were nine but it is down to approximately seven.
What will happen to the boards?
Mr. Michael O’Keeffe
The current BCI board was due to expire last December. That has been extended until the establishment of the authority. It will cease to exist as a board then. The same applies to the BCC. It will continue until next year but the Bill effectively knocks the board out of existence.
I note that the BCI board cost approximately €100,000 in fees and expenses and the BCC board cost approximately €75,000 for 2007. What will happen in the new system?
Mr. Michael O’Keeffe
Effectively there will be ten members on the broadcasting authority, and eight members on each of the statutory committees, four of whom will comprise two members of staff and two of the authority's board. In effect, the authority will have ten members and there will be four on each of the committees, making a total of 18, so it will be fewer than on the BCI and the BCC together.
Does Mr. O'Keeffe anticipate the board costs will be greater or less?
Mr. Michael O’Keeffe
I do not imagine that they would be unchanged. The Department will set the fee for the boards and we will not have any input into that. I imagine it will not be dissimilar to the current arrangement.
Who appoints the members? Will some be staff members?
Mr. Michael O’Keeffe
It is envisaged that the board of the authority will appoint two people to each of the sub-committees.
Who appoints the authority's board?
Mr. Michael O’Keeffe
The Minister appoints six and the Oireachtas Joint Committee on Communications, Energy and Natural Resources will nominate four whom the Minister must approve.
In the year under review the BCI's expenditure was only 90% of its original estimate. My initial response is, "well done".
Mr. Michael O’Keeffe
I thank the Deputy.
That indicated that the original forecast was high. Was there any reason for that?
Mr. Michael O’Keeffe
One of my objectives, under the performance-related award, was to control expenditure to 90%. There are certain costs that exist at all times but there are others on the operational side on which we kept a close eye with a view to keeping them to that level. As a matter of policy we looked to keep costs down in certain areas.
I concur with Mr. O'Keeffe's view and hope he continues that policy.
Mr. Michael O’Keeffe
We will certainly do that.
Do the general public and the operators in the business generally accept what the two commissions do and are they satisfied with it?
Mr. Michael O’Keeffe
I would think so
Are there any complaints about the commission?
Mr. Michael O’Keeffe
There will always be complaints. To back that up, we had a strategic plan running from 2004-08. We recently reviewed that and looked at the key performance indicators. That has been positive.
Mr. O'Keeffe mentioned €10 million under special programme funding. What percentage of that money is spent on RTE television and radio stations?
Mr. Michael O’Keeffe
RTE radio would be quite low because it did not take part in the scheme to any great extent for the first few years. Television would be significant, with perhaps 30% or so.
A big chunk of the licence fee money still goes back to RTE.
Mr. Michael O’Keeffe
Yes. On the television side there are RTE, TG4, TV3 and Setanta, so they get a fair amount.
What does Mr. O'Keeffe say to criticism of Newstalk and Today FM which are now part of the same organisation? There is now cross-ownership of the major newspaper group and the major radio stations in the country. Is there any policy on that? Another Dublin station, 98FM, is part of the same stable. Newstalk is upstairs from Today FM, both national stations. The major newspaper group and many local and regional broadcasters are owned by the same organisation. Is that a concern?
Mr. Michael O’Keeffe
There is an ownership control policy which requires us to look at the number of stations a person controls, particularly in the communications media area. We have a cap of 25% of the total. A person can go as high as 25% but the Communicorp group would be under that percentage.
We look at control of communications media in the context of the entire media. We would have evaluated Communicorp owning both Newstalk and Today FM in the context of market share. It was not an undue amount when we looked at that.
In terms of editorial content, both stations have programme policy obligations within their contracts. There are certain things we require — editorial independence and separation of different sections. We have permitted some sharing of correspondents in the recent past but the editorial decisions of each of the news teams are separate and the operation of both stations is separate also.
When the takeover by Communicorp of Newstalk occurred, did you investigate it or refer it to the Competition Authority? What did the commission do to prevent this sort of concentration of power?
Mr. Michael O’Keeffe
In the case of radio, we investigated if it would give the group an undue share of the communications media from a national perspective and we found it did not. The Competition Authority looks at things from a different perspective but it also investigated at the time and found the same thing. At the time, the original plan was to buy Today FM and FM104, another Dublin station, and we refused permission because the group already owned Spin 103.8 and 98FM in Dublin.
Would Mr. O'Keeffe take it seriously if this dominance in radio and other media was extended?
Mr. Michael O’Keeffe
Clearly, that is something we look at. If that happened both we and the Competition Authority would examine it under existing policy.
My colleagues referred to the accounts. The future is digital and the commission is in charge of licensing. Is there not an outstanding case for this committee to recommend that the new broadcasting authority and ComReg would be integrated so that the State would have a more powerful and efficient regulator, particularly given how digital will develop?
Mr. Michael O’Keeffe
I will deal with this in a number of ways. ComReg looks at market issues while we look at social and cultural issues. We are concerned with programme standards.
Who is in charge of content on my mobile phone, for example?
Mr. Michael O’Keeffe
If it is an Irish service, we are. That is the difference. ComReg is responsible for the phone, but the content on it is where a broadcast content regulator comes into play. That is the fundamental difference.
If somebody is running a radio station that is accessible on a website that can be received on the phone, who regulates content in that case?
Mr. Michael O’Keeffe
We do, but the audio visual media services directive in Europe recognised technological developments and the ability of people to broadcast in different ways. It will introduce the requirement that for all content services there must be a basic form of regulation. That would to the content regulator.
Given the convergence of systems and that anyone at this table could start a radio station tomorrow, broadcast it on-line and have it streamed to telephones, are we entering an era where content regulation is almost impossible? Is the commission's function obsolete?
Mr. Michael O’Keeffe
I do not agree. There is always a requirement for standards. We do a great deal of consultation and look at people's views on issues such as programme standards and if there should be a body in place to look at those. The consistent response is that there should be. A regulator like ComReg does not look at those issues, a content regulator is in a better position to look at them.
In the neighbouring state there is a single regulator that does all of that.
Mr. Michael O’Keeffe
Ofcom, which is a large organisation, has areas that look at content.
The commission has granted many licences. In terms of public affairs and news, it is a major concern that many broadcasters have blatantly not fulfilled the news content requirement. Does Mr. O'Keeffe have any view about the fact that recently TV3 slashed its workforce and in the process slashed a number of major news programmes? I understand its politics programme and its excellent sports programme have been dropped. We knew Mr. McRedmond in another life when he was with Eircom. One of the main purposes of setting up a rival national station and a number of rival radio stations has been defeated. Any of us could set up a television station and broadcast reruns, imported programmes and so on but to broadcast real shows it takes investment, initiative and a competitive nature, yet TV3 is slashing key news, current affairs and public affairs programmes. Does Mr. O'Keeffe have a view on that and in regard to other stations where it is argued that they have not reached anywhere near the percentage in terms news and public affairs programmes for which they got the licence?
Mr. Michael O’Keeffe
In the case of radio I have talked about the public files we have on the compliance and the monitoring we undertake. The is evidence is that local news and current affairs is very strong across the country. The strategic review we undertook recently examined people's views on the sources of news and there was a high response to news being provided on the radio as opposed to other media. Radio was the highest response in terms of——
Quite a few channels do not fulfil the statutory obligation Mr. O'Keeffe is supposed to invigilate.
Mr. Michael O’Keeffe
I do not agree. Ms Tumelty has kindly given me this document which proves the case. We examined the breaches of news and current affairs regulations in the past five years and the number of breaches in 2004 was two, it was three in 2005, two in 2006, one in 2007 and one in 2008. A total of 8,000 hours of broadcasting was monitored. That dispels that particular argument.
Did the commission do a whole-station evaluation of a particular station——
Mr. Michael O’Keeffe
Yes.
——say, 98FM or FM104 in our region to determine if they were doing the business?
Mr. Michael O’Keeffe
Absolutely. It is important to emphasise that we monitored 8,000 hours of broadcasting in the most recent year and there was one breach of the 20% requirement in that 8,000 hours of broadcasting. That dispels that argument.
In the case of TV3, in the past two years it has dramatically increased the number of its Irish programmes from the previous regime. In terms of the recent decisions it made, it has dropped the "Sports Tonight" programme but it is putting resources into other sports programmes and running sports bulletins through the other news programmes. In the case of the politics programme, it has extended the Vincent Browne programme from 40 to 60 minutes. That is an extra 20 minutes of current affairs per night. The ratings for the Vincent Browne programme, whether one likes or dislikes it, are quite strong. In terms of the provision of current affairs, therefore, it is delivering more than it would have done from that. It has retained the person who was involved in that, and I understand it is examining other ventures for her.
In terms of TV3's obligations to the commission, it would have increased those significantly in recent years and what it has done in the recent past would still be within its contractual requirements.
On the national broadcaster, given the development and the fact that we are in the digital era and that we will go deeper into that, and that in other jurisdictions people have asked whether a TV licence should be applied to just one country, has the commission done any studies or examined any analysis in terms of the future of the TV licence? I accept it is a huge part of RTE's income, given that we are moving into a digital area. Regarding the BBC, there are ongoing discussions, of which Mr. O'Keeffe will be aware, on whether the case can be made for continuing the licence in a digital era where in central London there might be 300 TV stations and one group of stations would have a particular state subsidy. Is there any examination of that in terms of the future of RTE?
Mr. Michael O’Keeffe
We have not done it as of now. I mentioned the media research system we operate. It is a topic that would be of interest in the future. With the way matters are developing in the digital era, it would be worth pursuing doing some research on that but we have not done it to date.
There is only a small fund currently, and Mr. O'Keeffe said it will increase to 7.5%.
Mr. Michael O’Keeffe
Yes.
That will be allocated to the independent broadcasters.
Mr. Michael O’Keeffe
The argument has been that for smaller countries, unlike the United Kingdom, such a mix of funding is needed. Public services will not be sustained at a particular level unless there is that mix of funding which comprises State revenue through the licence and commercial revenue. Any evaluation of this area would have to examine that and what that would leave us with——
Mr. O'Keeffe mentioned radio. Is there real competition yet in television broadcasting here? There was coverage recently of the astronomical salaries the RTE stars earn, and one or two of them considered the proposal for a long time before they acceded to a cut in salary in the current economic crisis. It is often said that those astronomical salaries are paid because TV3's performance so far has not been strong enough and that there is not real competition in the TV medium.
Mr. Michael O’Keeffe
I will not get into the question of the RTE stars' salaries but on the key question about competition, when TV3 was set up it said it had a number of objectives, one of which was that the majority of viewing in Ireland would be of Irish services. The majority of viewing currently is above 50%. That is RTE1, RTE2, TV3, which for a number of years has had a higher rating than RTE2, TG4 and the smaller channels we have licensed in recent years. That objective has been achieved in that the greater number of people are viewing television services but television is very different to radio. A total of 85% of people are listening to Irish radio services. In television, all of the UK channels are coming in with their various concepts. It is a different dynamic but from an overall objective competition point of view, that percentage has increased in the period they have been on air.
I have two brief supplementary questions on the issue Deputy Broughan has raised. On the local radio front, this year is the 21st anniversary of local radio. It has been most successful but I put it to Mr. O'Keeffe that it has been more successful in areas outside the capital, and particularly the greater Dublin region. Listenership of local radio in some parts of the country is up to 70%.
Deputy Broughan's point was on the public service element for Dublin stations, with which I agree. We previously had stations such as Sunshine, Nova and others, which were community related, but it is my firm view, on not only anecdotal evidence, that while Dublin is served by stations such as FM104, 98FM and other stations, which are predominantly music stations, it does not have a community focus. I have nothing against those stations. They do their job well but the capital is lacking in terms of proper local radio stations. There is LMFM, which half of listeners in north County Dublin would listen to but it does not relate to them. There is a lack of service in the Dublin region for local news. When Newstalk went national it was a big loss in terms of Dublin radio news coverage. Is there a view within the commission as to how that loss will be addressed? Approximately 2 million people live in the greater Dublin area, including in the city, and they are not being well served by local radio in terms of issues that are specific to them.
Mr. Michael O’Keeffe
I have sympathy for the Deputy's point. When Newstalk began it was designed to be a Dublin local station that had a news focus. Clearly that is not the case now in that it has a national focus. I understand that. There is also Dublin City FM, which is run——
There is Raidió na Life also, which is a much smaller one.
Mr. Michael O’Keeffe
There are approximately five or six community radio stations.
And Near FM on the northside.
Mr. Michael O’Keeffe
Near FM is one of the finest radio stations. Ms Margaret Tumelty started her career in Near FM. It had a positive influence. Listeners in Dublin are different from listeners in other regions and there is a range of regions in Dublin. It is difficult to set up a station there on a commercial basis.
Was it not the case that the evidence of broadcasting experience in London was that often small community stations were not able to do the business and that a station needed regional coverage? In other words, if Fingal had a licence for a radio station to broadcast from Swords or Malahide, it probably would have a listenership of 300,000.
The Deputy and I could have regular slots on it.
Proper coverage of politics.
Mr. Michael O’Keeffe
The current licensing plan is at its conclusion. When the new board is set up, we will examine the next phase of licensing. I would be conscious of there being a gap.
Highland Radio serving areas of Donegal is a strong station because it has a focus. Swathes of areas in the capital do not have such a service. I am not talking about the city but about areas such as Fingal and south County Dublin. I am not being parochial but I ask Mr. O'Keeffe to genuinely examine that aspect.
Death notices are read out on Tipp FM at tea time, which is informative for listeners.
Mr. Michael O’Keeffe
That is a legitimate point.
Could Mr. O'Keeffe flesh out the Irish language initiatives and outline their purpose?
Mr. Michael O’Keeffe
A committee has been set up for the past eight or nine years that operates with Foras na Gaeilge and its membership includes representatives from the commercial and community sectors. The initiatives are primarily related to promotion of the language and training, which can involve bringing a group of Irish language presenters together and providing them with training and the opportunity to meet one another. Initially, we had a small allocation for programming initiatives but that has now been taken over by the sound and vision fund. More than 25% of that fund must be allocated to Irish language programming which has helped to develop such programming across the sector. We meet quarterly and examine ways of further developing the use of Irish across the sector. This is done with our fellow regulator, Foras na Gaeilge.
I invite Mr. Buckley to respond to what he has heard this morning during this long session.
Mr. John Buckley
We have dealt with four public bodies, Tourism Ireland Ltd., Fáilte Ireland, Waterways Ireland and the Broadcasting Commission of Ireland. In terms of public accountability issues, they can be considered from two perspectives. On the input side, each of the bodies has got clear certificates on their accounts in recent years. Any recent public accountability issues that arise in the bodies are at a low ebb and were dealt with by management letter. In the early years of the two North-South bodies a range of issues presented but they were quickly dealt with.
The other thread running through most of the discussions with each of the bodies was around the area of effectiveness. In the tourism area, from the audit point of view, the issue of independently validating or reviewing the monitoring and effectiveness of overseas marketing arose. A question of duplication was raised, but it was more a question of how to dovetail the product and regional development activities of Fáilte Ireland and Shannon Development with the marketing of the Discover Ireland brand by Tourism Ireland Limited.
The effectiveness of expenditure on our waterways was raised in terms of the use of the facilities and their contribution to tourism and leisure. An interesting point was raised in the area of project management, namely, the idea of an affordability cap, an issue with which we have been dealing over a number of sessions, or the notion that somebody would intervene and say that a project could not be proceeded with because it was too dear. An affordability cap tends to exist in public private partnerships and so on. We heard of a good practice initiative or opportunity that arose in the case of Waterways Ireland where when a limit was reached in a bridge-building project, the project did not proceed further.
Reverting to the effectiveness of the bodies, in the case of the last session, we will have to examine the effectiveness of the broadcasting fund in the long term. A study has been done on it already, but in terms of future work the question arises whether the organisations we discussed need to have some independent validation of their systems, procedures and practices to evaluate the effectiveness of their operations. So the thread of the discussion on the output side of government was around the area of effectiveness and independent validation. That thread ran through the discussion in all three sessions.
I thank Mr. Buckley for that input. I also thank Mr. O'Keeffe and his colleagues, Ms Fleming, the representative from the Department of Communications, Energy and Natural Resources, and Mr. Keane, the representative from the Department of Finance, for their attendance.
Is it agreed that we dispose of the accounts examined today? Agreed. Is it agreed that we note the special report of the Comptroller and Auditor General. Agreed.
Our agenda for next week is that we will have a private meeting to consider the draft annual report and we will also do preparatory work for our meeting with the Health Service Executive. The meeting is adjourned until 10 a.m. on Thursday, 9 April 2009 when we will meet in private session.
The witnesses withdrew.
The committee adjourned at 2 p.m. sine die.