Dáil Éireann debate -
Wednesday, 23 Feb 2000

Vol. 515 No. 1

Privatisation of Transmission Network.

Mr. O'Shea:

The report which appeared in the Irish Independent this morning stating that the Minister for Arts, Heritage, Gaeltacht and the Islands, Deputy de Valera, will bring proposals to Government next month seeking to privatise the RTE transmission network is a matter of major concern. The reasons for this concern are not only in regard to digital terrestrial television broadcasting but in regard to the potential other uses to which this country-wide system of strategically placed equipment could be put.

If the agenda is to remove this important infrastructural asset from public to private ownership, and if that disposal is based on an estimated valuation of £30 million to £40 million, then the Minister must be prevented from doing that. I demand that the Minister clarify if the alleged valuation is based on the broadcasting value only or if it is based on the telephony or technology conversion potential as well.

The Minister in her speech at the commencement of the Second Stage debate on the Broadcasting Bill, 1999, stated that the Bill enabled her to designate a company, which will be licensed by the Director of Telecommunications Regulation, to construct and operate the digital terrestrial television infrastructure. She further stated that RTE will be a minor partner with a shareholding of up to 40% and that the company will be mandated to build and operate the digital terrestrial television structure and to promote the development of multimedia services and the information society. It would appear all this has gone out the window.

The Minister has a responsibility to say what has brought about this fundamental change in direction in regard to the designated company's composition. Keeping the RTE transmission network in public ownership whereby leases can be negotiated which would be commercially attractive but where the State would get the optimum value, should be the policy priority for the Minister. This morning's newspaper report indicates that the Minister is going in the opposite direction. The House deserves a full and frank explanation.

Mr. M. Higgins:

Without discussion on Second Stage of the Bill of the proposal in today's newspapers, the Minister has suggested the sale of the transmission system which carries the national broadcasting system. This is frankly outrageous. The Bill is now on Committee Stage. She has suggested, in total defiance and in opposite of what she announced on Second Stage, that she pro poses a complete change of policy on Committee Stage.

What is being proposed is a blow to the concept of national identity and national integrity. It is a capitulation to the very worst tendencies in international market thinking. Given the convergence in technology to which Deputy O'Shea referred, it fuels the concentration of ownership and it is the commodification of communication. To put it simply, the national broadcaster built the transmission system out of the licence fee. It was not built by direct State funding but by the people through the licence fee. That broadcaster will, effectively, become a tenant on sufferance in a system which it built.

It appears the Minister proposes to instruct RTE, the national broadcaster, to dispose of this asset to, what is called in the newspaper, the highest bidder in the market. Where is the mandate for the sale of an asset bought out of the licence fee paid by the people? In regard to those who advised on the value of the asset, Allied Irish Capital Markets, can the Minister give an assurance that no other part of that company in its extension or in any other form is in any way conflicted by involvement in any potential sport for one of the bids that might emerge should it be sold to the highest bidder? This is a sad evening. The BBC across the water has just got a licence fee increase to prepare it for the digital age. A proposal has been leaked, which the Minister has suggested is substantially true, that this pillar of democracy and diversity and diversity of editorial opinion is now to be huckstered on to the market. It is an absolute disgrace. Committee Stage of the Bill should be stopped immediately. The Minister should come into this Chamber. If she has a proposal for the privatisation of what she does not own, what the people own, she should have the courage to defend it at Second Stage of the Bill.

Minister of State at the Department of Arts, Heritage, Gaeltacht and the Islands (Éamon Ó Cuív):

Ba mhaith liom a rá i dtosach báire go bhfuil an tAire as baile agus murach é sin bheadh sí anseo í féin tráthnóna. Ba mhaith liom chomh maith buíochas a ghlacadh leis na Teachtaí as deis a thabhairt dom cuid de na fíricí a bhaineann leis an rud seo a shoiléiriú.

The Government decision of 22 July 1998 on the arrangements to be made for the introduction of digital terrestrial television provided that the existing transmission function should be separated from RTE. Under the terms of the decision, the entity thus created, in which RTE would retain an equity stake, would be mandated to build and operate the DTT infrastructure and to promote the development of mult-imedia services and the information society. The decision also provided that the manner of the sale, the selection of the purchaser and the criteria for such selection were to be decided by a group headed by the Minister for Arts, Heritage, Gaeltacht and the Islands, including the Ministers for Finance, Enterprise, Trade and Employment and Public Enterprise and RTE. A project management group made up of representatives of the Ministers concerned and RTE was established on foot of the Government decision.

The Government decision of July 1998 also authorised the Minister to have a Bill drafted which, among other things, would provide a statutory framework for the introduction of DTT and the ongoing regulation of indigenous digital television services across all delivery platforms.

Since that time the Broadcasting Bill, 1999, has been published and has completed its Second Stage in this House. In parallel with work on the Bill, the project management group has set about the task of separating the transmission network from RTE and selecting the investor in the new digital transmission entity envisaged in the Government's decision. Given the importance and complexity of the task, the project management group selected a consortium of advisers led by AIB to advise on and manage the project to a conclusion under the direction of the group.

A considerable amount of work has been done in identifying the assets to be transferred. The preparation of an information memorandum was put in train. Arrangements were made to ensure that the decisions of the project management group would be informed by the concerns of the staff in RTE who would likely be transferred to the new digital transmission entity. Considerable work in developing the structure and management of the transaction to select the majority partner in the DTT platform was carried out. The transaction structure had to be such that it ensured that RTE and Teilifís na Gaeilge, now TG4, would obtain fair value for the assets to be transferred to the new entity. In addition to this requirement, it is crucial that the transaction framework satisfied legal and regulatory requirements at national and European Union level.

The development of a transaction process that satisfied all the requirements and the participants on the project management group and met the Government objectives in introducing digital terrestrial television has proved to be a difficult and complex task. The Minister, with the advice of the project management group, has been considering how best to progress the establishment of a DTT platform and has sought the observations of some of her Cabinet colleagues on a possible way forward. If and when the Minister decides that it is necessary to bring proposals to Government to progress the matter further, she will do so. Deputies will be aware that it would be inappropriate for the Minister to comment further on the report in today's Irish Independent at this stage.

Mr. M. Higgins:

She said it is true.

The Dáil adjourned at 11.25 p.m. until 10.30 a.m. on Thursday, 24 February 2000.