Broadcasting (Major Events Television Coverage) (Amendment) Bill 2003 [ Seanad ] : Report and Final Stages.

An Leas-Cheann Comhairle:

Amendment No. 15 is an alternative to amendment No. 1 and both may be discussed together by agreement.

I move amendment No. 1:

In page 3, between lines 34 and 35, to insert the following:

1.–The Minister shall keep the list of designated events under section 3 of the Principal Act under review from time to time and at least every 2 years.

On Committee Stage the Minister gave an indication that he might look favourably on the prescription that "the list of designated events under section 3 of the Principal Act under review from time to time and at least every 2 years." Many Deputies contributed to the debate on Second Stage when the list of events designated was discussed at length and said the bulk of them relates to association football and that only the All-Ireland hurling and football finals, our native games, were included. Despite the developments in the draws for both the football and hurling championships in recent years, frequently there are exciting games which affect teams from different parts of the island and which, conceivably, could be regarded in the future as events of national importance. At the same time the Six Nations Championship was not included in the designations because of the pool system, as the Minister explained. Looking at the situation last Sunday week when Ireland was one match away from an amazing championship win, a Grand Slam title, we could see clearly that this was also a national occasion.

The Minister carried out lengthy consultations for which I commended him on Second Stage. It was a very interesting document which informed our speeches on this side of the House in regard to all the sports and how the decisions were made. We know how decisions were reached on this occasion. Given the general development of sport and culture – culture was hardly referred to in relation to this process – the designation should be kept under continuous review. The Labour Party considers that to place it in the Long Title of the Bill would be the right way forward. The Minister said he might consider including this amendment – he was generous in respect of another amendment from Fine Gael in the name of Deputy Coveney.

I support Deputy Broughan's amendment. The only thing I am annoyed about is that I did not put the proposal forward. The amendment makes sense. I note the Minister is speaking in terms of reviews every three years. He is taking on board the principle that it is proper to review this matter every so often. Perhaps the Minister will indicate the reason he is opting for three years rather than two.

The Minister's amendment is welcome and has been stimulated, perhaps, by Deputy Broughan's request for a review procedure to be put in place. We need to look at golf and key events, such as the Irish Open, as a possible event of national interest, at some stage in the future. Clearly there is a need for a review process every two or three years. It does not make a huge difference whether it is every two or three years. My only concern is that if a sporting body or an event organiser enters into a six-year contract with a non-qualifying broadcaster and in two or three years' time we decide to designate that event, is it the case that contract becomes null and void? There is a concern among some sporting bodies that there will be a lack of confidence among non-qualifying broadcasters to offer substantial sums of money for contracts over a long period when they know there is a danger their event could be designated. This is a genuine concern and I am not trying to be difficult. If the Minister deals with it, that will address some of my concerns.

On Committee Stage I said I would bring forward an amendment, and that amendment is No. 15. I am not in a position to accept the Deputy's amendment although we are not far apart on it. The proposal in my amendment No. 15 will cover the situation. To reply to Deputy Coveney, all the broadcasters and event organisers will have some certainty now because I have already indicated I would embark on a review in two years' time so that the list will be in existence for another two years. At that stage there may be a review. It is possible that other events that are not envisaged may well be designated in the future. I cannot second-guess what would be the policy of a future Government on these issues. Under the directive, which is the basis for this legislation, we are allowed designate. The representations made by sporting organisations would be taken into account in any future designation because there must be a process of consultation and review and, obviously, the matter must come before the House.

There is a long road ahead for future events that may or may not be designated. It is the case -all sides must be aware of this, as were some of the protagonists in this instance – that the 1999 television without frontiers directive allowed nation states to cordon off certain events of historical and cultural importance. In the designation process we looked at the possibility of designating one or two cultural events as well as sporting events. At the end of the day we decided to adopt the approach we did purely in relation to sporting events.

An Leas-Cheann Comhairle:

Is the amendment being pressed?

Given that the Minister has come a good way down the road, it is fair enough. I wish to withdraw the amendment.

Amendment, by leave, withdrawn.

I move amendment No. 2:

In page 5, line 15, after "rights" to insert "and the Court may if necessary set aside any contract which in the opinion of the Court impedes the exercise of rights under the Principal Act".

I tabled the amendment because of the powers the High Court was being given in relation to existing contracts between the event organiser and another broadcaster who was not a qualifying broadcaster, where an event or part of it was proceeding.

It seemed at that stage that we needed to spell out clearly that Part 3 of the directive, the key element on which the 1999 Act was based and on which this amendment Bill is now based, and that it should be completely implemented in spirit as well as in fact. We had a discussion earlier regarding BSkyB in the future and the kind of global network this massive cross-media company has established in broadcasting and all kinds of other media, particularly print media, and how such an organisation can determine the rates to be set for important public events. I agreed with Deputy Ryan the last time this was discussed that the fundamental point in this Bill, which is mentioned again in the Minister's amended section, is the fixing of reasonable market rates.

This Minister faced afait accompli when he took over the Department and found effectively that the 1999 Act had been left in abeyance for two and a half to three years and had not been implemented for whatever reason. We in the Labour Party and on this side of the House are suspicious about the Minister's real reasons for not implementing it and suddenly beginning again the whole process of consulting sports bodies to try to discover what would be a proportionate response in order to protect not just the rights of sporting bodies and event organisers but also those of broadcasters. I am not sure that he succeeded in doing this and that this is why he wanted to give this a further cutting edge. There is provision for varying a contract, which allows for a contract to be set aside if it was in the interests of the cultural and sporting life of the country.

It seems that the last number of games, even of our association football teams, have not been available to every household, which is deplorable. The Government got us into that boat. The Minister's predecessor, my colleague, Deputy Michael D. Higgins, had set in train a development which would have prevented such an event. However, now people are talking about ballpark figures of €8 million in respect of the European Championship games in soccer. I ask the Minister to per haps give the ultimate power to the High Court in regard to such agreements.

If my memory serves me correctly, Deputy Michael D. Higgins did a lot of talking when he was in the Department but did not bring forward much legislation.

He set up the Department.

My recollection is that he introduced only three Bills. I do not know how long he was in the office – maybe three years.

I cannot agree to the Deputy's amendment. Section 4(10) gives the High Court enough power in regard to existing contracts. I do not want to be over-prescriptive. I wish to be proportionate. All we are dealing with is the entitlement of the Irish people to have on free-to-air television certain games of major sporting importance to society. From that point of view it would only mean varying a contract or adjusting the contract regarding either exclusive or non-exclusive rightsvis-à-vis a non-qualifying broadcaster with an event organiser. That it is more than adequately taken care of.

An Leas-Cheann Comhairle:

Is the amendment being pressed?

The Labour Party, Fine Gael and the Green Party have a number of amendments relating to market rates, which is what this really depends on. I will, therefore, press the amendment.

Amendment put and declared lost.

An Leas-Cheann Comhairle:

We now come to amendment No. 3. Amendments Nos. 4, 5 and 6 are related. Amendments Nos. 3 to 6, inclusive, will be taken together by agreement.

I move amendment No. 3:

In page 5, to delete lines 20 to 29.

The effect of this amendment is to delete from the legislation the provision allowing a court to grant to a qualifying broadcaster access to an event without first deciding on the conditions of access and price that will have to be paid. It is farcical that a broadcaster could be allowed access to an event without knowing how much it will cost to cover it and without the event organiser or the sporting body knowing how much they will be paid for it. This level of uncertainty may lead to problems. For example, if RTE goes to the High Court to get access to a match, and the court proceedings go on for some time and a decision cannot be obtained through the arbitration process on the rate that will be applied for the event, would it be sensible for RTE to go ahead and cover it, not knowing how much it was going to cost? It will not have budgeted for it. The whole point of this legislation is that the coverage should be both affordable for qualifying broadcasters and treat event organisers and sporting bodies fairly. Both parties involved, whether they be a qualifying broadcaster or an event organiser, are being treated unfairly by this section of the Bill.

Sections 4 and 5 attempt to do the same and put in place a text that will require the court to decide both on conditions and rates for access up to three weeks before the event. If RTE believes the rate is too high and decides not to cover the event, at least there will be a period of time for the sporting body or the event organiser to get somebody else, probably a non-qualifying broadcaster, to cover it, which is better than having no coverage. On the other hand, the sporting bodies will know three weeks before an event how much they are going to be paid for it.

The Minister was concerned about the possibility of a crisis as a result of running out of time and an event needing to be covered. However, we should not dictate to the court a timetable that cannot be realised.

I have made provision for a lesser period which the Minister directs. If there are exceptional circumstances and a decision needs to be made two days before access to the event, then the Minister can facilitate that if necessary.

We need to have text in the legislation which encourages and, potentially, requires the court to do its business up to three weeks before the event takes place, for all the reasons I have outlined. The Minister, sensibly and I thank him for it, increased the length of time during which people can go to court to get access before the event from 28 days to 56 days. If the process needs to go to the High Court, which it will not have to do in most cases, it will be dealt with between 56 days and 21 days prior to the event. That is a reasonable timescale which treats both the sporting body and the qualifying broadcaster in a fair manner.

I disagree with my colleague, Deputy Coveney. The direction he is proposing is wrong. It shifts the ground away from the public interest towards the sporting bodies. We have already seen one sports body putting the fans and the public interest second and its own bottom line first, by selling broadcasting rights to Sky. I was under the impression that this legislation was geared to protecting and safeguarding the rights of the public more than the rights of sports bodies, which is the direction in which Deputy Coveney is moving.

Flexibility is required where a short period is available to the court for seeing though the arbitration process and the broadcaster needs to plan and make preparations for covering the events. The legislation before us is an admirable, if late, attempt by the Government to put public interest before the vested interests of sporting bodies. On that basis, I will be opposing the amendment.

Before the Minister replies may I raise a point of order? If Deputy Crowe had made the effort to attend the debate on Committee Stage he would have understood—

I was not in the country at the time.

There was a member of his party at the debate on Committee Stage and he made no comment on this. I have made it quite clear on every Stage that the primary purpose of the Bill, which we support, is to ensure that the public comes first. However, there is no reason we cannot also ensure that the sporting bodies and qualifying broadcasters are treated in a fair and sensible manner. That is the balance we are attempting to achieve with these amendments. Of course the public is the priority in this regard.

The amendments proposed by Deputy Coveney are designed to require the High Court to fix terms in sufficient time to allow the event organiser to make other arrangements in the event that a qualifying broadcaster has decided to withdraw its application under section 4(1). We are all anxious to ensure that if the matter goes before a court it will be brought to an early conclusion. That is why the amendment I brought forward and amended to include the 56 days, as was proposed by Deputy Coveney on Committee Stage, is sufficient to catch what we are all trying to do.

I disagree with Deputy Coveney's approach for a number of reasons. Deputy Coveney's amendments propose that the High Court would be bound to make a decision on reasonable market rates at least 21 days before the date of the event. This would have the impact of removing, as an option for the court, the possibility of fixing the rate after the event had taken place. It is not unusual for a court to make a decision regarding terms and conditions after an event. It is to be expected that the court would endeavour to reach a speedy decision but I am strongly of the view that the hands of the court should not be tied. I discussed this with officials of my own Department and from the Attorney General's office. It should be left to the High Court to decide when it is ready to make a decision on reasonable market rates.

Amendment No. 4 provides that the High Court should fix reasonable market rates less than 21 days before an event takes place, provided the court has the permission of the Minister for Communications, Marine and Natural Resources. I am of the view that this would be a gross intrusion in the independence of the court. Once the matter is before the court I do not see a role for the Executive or for ministerial involvement. Full discretion should be left to the courts. The Bill, as drafted, provides that the High Court could fix reasonable market rates after the event has taken place. The effect of amendments Nos. 3 and 6 would be to remove this option and I disagree with the objective of those amendments.

The first thing to get clear is that allowing the High Court to fix the rate after the event has taken place is not bad for the event organisers. Where the High Court route is used to agree terms the event organiser will be paid a reasonable market rate. The event organiser has no choice but to accept the court's findings. Accordingly, the event organiser will get the same cheque, whether the court fixes the rate ten days before the event or ten days after.

There would, of course, be a risk for the qualifying broadcaster. So, if the qualifying broadcaster accepted rights on the basis that the rate would be fixed after the event there would be a risk for the broadcaster that it would end up paying a price to which it would not have agreed had the rate been fixed before the event. The real issue, however, is that it is for the court alone to decide when it is ready to make the decision as to what constitutes reasonable market rates. One of the options open to the court must be to make an order granting a qualifying broadcaster access to the event while, at the same time, deferring, if necessary, a decision on the price until such time as the event had taken place. If the court does not have this option it would be faced with taking a decision on reasonable market rates before it is ready to do so, which I do not think anyone here would want, or not granting access to the event to a qualifying broadcaster on the grounds that the court had insufficient time to reach a fair decision on a reasonable market rate, which it would be obliged to do if it could not come to a decision regarding reasonable market rates.

While agreeing with the principle that an early decision would be best, I think the court must have flexibility in dealing with any application under section 4(1). The amendments proposed by Deputy Coveney may, by removing the flexibility allowed to the court, prevent the court, in certain circumstances, from facilitating the broadcasting of designated events on free-to-air television. For those reasons I oppose amendments Nos. 3, 4, 5, and 6.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 4:

In page 5, line 50, after "issued." to insert "The High Court shall fix reasonable market rates, or an arbitrator shall issue an award undersubsection (4) and the High Court shall make a final award in respect of the application at least 21 days prior to the event commencing, or such other lesser period which the Minister directs.”.

Amendment put and declared lost.

I move amendment No. 5:

In page 5, line 55, to delete "or" and substitute "and at least 21 days prior to the event,".

Question, "That the word proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Amendment No. 6 not moved.

I move amendment No. 7:

In page 6, line 30, after "broadcaster." to insert "The High Court may, if adjusting an existing agreement, made prior to the passing of this amending legislation, award compensation to the relevant party or parties, if it is deemed that the adjustment for broadcasting rights has made a financial impact on the parties concerned.".

If a sporting body does not have a designated event and decides to enter a contract with a non-qualifying broadcaster for five years, and the Government decides to designate its event causing a serious financial impact on the body, it would be appropriate that the High Court has the power to compensate that body for a significant loss in revenue. There is a difference in the market between selling an event to all broadcasters, qualifying and non-qualifying, and to two potential buyers, TV3 and RTE, the only qualifying broadcasters in Ireland. I am not referring solely to the FAI deal with Sky, I want the general principle to exist in the Bill. This is not an effort to get compensation for Sky or the FAI, it is merely an example of what can happen. If a sporting body or broadcaster suffers significant financial losses where an event is designated, the High Court should have the power to award compensation to the body if it is appropriate.

Amendment No. 7 seeks to provide the High Court with the power to award compensation to a non-qualifying broadcaster and-or an event organiser where the Government has adjusted the existing contract under subsection (10) and this has a financial impact on either party.

As I said on Committee Stage, the whole point of this Bill is to look after the public interest. There is a case that designation could impact on the ability of an event organiser to maximise resources from the sale of television rights and could also impact on broadcasters. By accepting the amendment, however, a non-qualifying broadcaster who has entered into a contract prior to this legislation could be compensated for a situation where it was clear that there was a move towards designation and it entered into the contract in full knowledge of that.

The television without frontiers directive allowed intervention to protect these events. Because of the scenario we faced, we included sections 4, 9 and 10 in the Bill. Section 10 relates to the adjusting of an existing contract and there is no need to put in a reference to compensation for the event organiser or the non-qualifying broadcaster because in the scenario we are dealing will that has caused the difficulty. We would be awarding compensation to a satellite operator who would not get exclusive rights under this designation, something it wanted at the very start.

Amendment, by leave, withdrawn.

Amendment No. 8 arises from committee proceedings. Amendment No. 9 is related and they will be taken together by agreement.

I move amendment No. 8:

In page 6, to delete lines 50 and 51.

Amendment No. 8 is a technical drafting amendment that does not change the effect of section 5. I am advised by the parliamentary counsel that subsection (3) is not required as the matter is already dealt with in section 48 of the Arbitration Act 1954. On amendment No. 9, section 5 of the Bill deals with the concerns expressed by event organisers that qualifying broadcasters would use event designation to drive down the price for access to such events in the future. The arbitration mechanism was called for during the consultation process and it was warmly welcomed by the sporting organisations.

The Bill provides for a situation where there is an agreement to have an event broadcast by a qualifying broadcaster but not on what constitutes a fair price. The amendment would mean that the arbitration finding would not be binding on either the event organiser or the broadcaster so it would not be helpful to the event organiser. The Bill, as drafted, provides that the finding of an arbitrator is binding on the event organiser if the qualifying broadcaster accepts the finding within 21 days. A qualifying broadcaster is therefore required to make a definite decision after an arbitrator has issued its findings to pay the price or withdraw.

Without this mechanism negotiations could go on and on, frustrating the situation. This would not be in the interests of the event organiser who would still not know if the qualifying broadcaster is prepared to pay reasonable market rates for acquiring rights to televise the event. The arbitration mechanism will not only determine reasonable market rate but will help to bring negotiations to a successful conclusion. A completely non-binding arbitration mechanism, as proposed by Deputy Coveney, would not be of assistance in bring negotiations to a conclusion and would probably only lead to the case ultimately arriving in the High Court. The High Court could then ask why the matter is before it when it has already been decidedres judicata. It would say the fee has already been set by another body.

This legislation is geared to ensure that events are broadcast on free to air television and any movement in this section would weaken the effort we are making to protect the public interest.

I welcome the fact that, following consultation, the Minister included an arbitration process because it was not originally in the Bill. If we are putting an arbitration process in place, however, the whole point is to treat both sides fairly and come up with a compromise. That is what arbitration means. The current wording means that all the cards in negotiations are held by the broadcaster. If the event organiser and the broadcaster cannot agree a price and they go to the arbitrator, once the arbitrator makes a ruling, if the broadcaster does not like the price he can say it is too expensive and go to court. If the sporting body does not like it, that is tough and it must accept it. That is not arbitration.

The purpose of this Bill is to get a fair price to ensure the event is covered and the public has the opportunity to see it. I support that principle, but if there is an arbitration process it must be binding on both parties and that is not practical here because the broadcaster cannot be forced to pay the money. The alternative is to have an arbitration process like the Labour Court where neither party is obliged to accept the ruling. In this instance the sporting body is obliged to accept the price decided by the arbitrator and the broadcaster is not.

If the broadcaster turns down the arbitration rate and the dispute goes to court, I accept the need at that stage for the broadcaster to make a decision on accepting or not the court decision and to decide whether to cover the event.

Where an arbitration process can include court proceedings, the event organiser must accept the ruling of the court because of the need to guarantee that the event is covered. However, at the earlier stage, when both sides volunteer to go to an arbitrator, the legislation would be more balanced if the arbitration process was binding on only one party. The sporting bodies are being treated poorly in this regard.

I return to the premise on which this legislation was introduced, namely, to protect for the public interest a limited and specific number of events. If an unbinding arbitration process was to be imposed on both parties, they would effectively use it. I hazard a guess that event organisers in particular would use it to bring to the wire, or frustrate, the televising of the event. I do not mean that to be disrespectful to the event organisers, but they would try to prolong the process for as long as possible with the result that the qualifying broadcaster could well have to go to court. That is not what we wish to achieve.

The arbitration provision was originally based on the premise of an agreement to broadcast, but if the amendment is accepted it could happen that the event broadcaster could decline to cover the event. The provision allowing the qualifying broadcaster the option to decline an award was inserted for good policy reasons as without it, a large onus may be placed on either of the country's two broadcasters to accept a figure they could not afford. They may wish to have the option to decline, in which case the event organiser could reach an agreement elsewhere. The event organiser will know within 21 days if there is a deal, which is the way it should be.

Amendment agreed to.

I move amendment No. 9:

In page 7, lines 6 to 9, to delete all words from and including "concerned" in line 6 down to and including "broadcaster's" in line 9 and substitute the following:

"or the event organiser unless, within the period of 21 days from the date of issuing of the award of the arbitrator undersubsection (4), the qualifying broadcaster and the event organiser have reached agreement on”.

Question, "That the words and figure proposed to be deleted stand", put and declared carried.
Amendment declared lost.

Amendments Nos. 11 to 14, inclusive, are related to amendment No. 10 and amendments Nos. 10 to 14, inclusive, may be considered together by agreement.

I move amendment No. 10:

In page 7, between lines 12 and 13, to insert the following:

"(a) the needs of free to air broadcasters,”.

Most of those who spoke on Committee Stage considered that the criteria laid out in section 6 were perhaps among the most important aspects of the Bill. The 1999 Act refers to a fair market rate and reference has been made to reasonable market rates. The word "reasonable" has legal connotations in the history of jurisprudence.

The Labour Party considers that the fundamental needs of broadcasters should also be included in these criteria. Section 6, paragraph (f), refers to, “such other matters as may appear to be relevant to fixing reasonable market rates.” Deputy Coveney has referred to the fears and concerns of the sporting bodies, but the other side to the equation must also be considered.

I am pleased that my distinguished colleague, Deputy Michael D. Higgins, is beside me in this debate because he played a heroic and fundamental role in having this legislation introduced. The European Union directive,Télévision Sans Frontières, also seeks to ensure that European Union member state citizens will be able to view great sporting and cultural events as a fundamental right and to resist the attempts of organisations such as the Murdoch and Kirch media conglomerates to turn these events into commodities.

A number of months ago, RTE unions and management appeared before the Oireachtas Joint Committee on Communications, Marine and Natural Resources and a delegation from TV3 appeared before it recently. Some people considered that I was somewhat harsh on the TV3 delegation, but my purpose was to get TV3 to compete strongly and begin to provide good programming across the schedule, something it is not doing at present.

The committee engaged in lengthy debate on the different financial needs of both broadcasters. As the national broadcaster, RTE has a great national task in transmitting the core values of the nation in areas such as music, language and the other high national tasks accorded to one of the country's oldest semi-State bodies. The Minister addressed some of the issues raised, especially with regard to an increase in the television licence fee. The committee also considered the concerns of TV3.

The purpose of the amendment is to secure a level playing pitch for both sides in this area and to ensure that the spirit of what my colleague intended is met. This will mean ensuring that in the process provided for in the legislation, the needs of free-to-air broadcasters will be considered. There may be additional such broadcasters in the future.

The key aim is to ensure that the public will not be prevented from viewing an event because of the kind of market that appears to have been created by the deal reached between the FAI and BSkyB. A price of approximately €8 million appears to have been agreed between the FAI and BSkyB for the latter's right to the exclusive broadcasting of the FAI team's qualifying games in the European Championships. The concern that this may be used as a benchmark for future transactions must be addressed and I propose this be done by way of this amendment.

Deputy Broughan is correct to identify this section as the crux of the Bill, certainly from the perspective of the Opposition. We are concerned that in not amending the Bill in some way, as proposed by these amendments, the Minister will ensure that the legislation will produce an effect that is counter to the stated intention. The key issue centres on the definition of the term "market rates". The Minister maintains that section 6, paragraph (f) will be sufficient to ensure that in the case of dispute, the High Court must take, “such other matters as may appear to be relevant to fixing reasonable market rates”, and that this will be sufficient to ensure that it takes account of the concerns raised by Opposition spokespersons. The Minister said he would be willing to accept amendments which were supported by genuine arguments. In view of this it will be disappointing if he does not accept one of these amendments in an attempt to ensure that the legislation does not produce the opposite effect of what he intends, and which we fully support.

Following Committee Stage, I redrafted amendment No. 11 in my name to try and take into account comments made by the Minister. I took him at his word when he indicated that he might consider an amendment that will deal with non-exclusive or free to air coverage rights for particular events.

If "non-exclusive live coverage" is the wrong phrase and the Minister prefers the term "free to air", I am happy to accept it. However, it is important to indicate to the High Court what we are looking for. When we refer to market rates, we should point out that we mean the market rates for free to air programming rather than market rates as set by exclusive broadcasters.

To reiterate one of the main points I made on Committee Stage, if market rates are not set on that sort of limited basis, the High Court will have to take into account the market rates that apply to broadcasters like Sky. In that regard, we are not talking about a fair and free market because, under present arrangements, Sky is able to insert into programmes advertising which is directly targeted at the Irish market. It gets significant revenues from this advertising without being subject to the requirements imposed on free to air broadcasters here and without any regulation and control from the Minister, nor does it have increased incremental costs.

We have one broadcaster which is able to draw significant revenues from the State, but is under none of the restrictions other free to air broadcasters must observe. Sky has a well known, worldwide strategy whereby it purchases sports rights as an introductory tool to access a market and builds up a customer base. It is willing to set far higher rates than can be afforded by any terrestrial broadcaster for high profile national sporting events.

If the Minister does not accept the point and is happy to allow the High Court to set the market rates, I cannot see how the court will do other than interpret the Bill as obliging it to take into account what satellite broadcasters are willing to pay. In such circumstances, the arbitrator will set a rate which the terrestrial broadcasters may have to refuse to pay unless the Minister is willing to allow a further increase in the licence fee to enable them to budget for such prices. The Bill provides, rightly, that the satellite broadcaster can mop up in regard to events where the market rate is set higher than the terrestrial broadcaster can afford, because Sky has done these deals already. Unless the Minister is willing to accept or formulate an amendment to provide the High Court with a clear indication that the market rate is not simply what any other broadcaster can pay, the Bill will be fatally flawed. On Committee Stage, the Minister came close to accepting such an amendment when he said he might consider a wording which takes into account free to air or non-exclusive live coverage. For that reason, I amended amendment No. 11 to incorporate the wording the Minister used on Committee Stage and I hope he will accept it.

Amendment No. 13 addresses a key issue. It is perfectly legitimate for legislators, who are responsible for broadcasting policy in the State, to make a condition or provide a reminder for the High Court which informs it that we want year-round sports coverage to bring us the everyday drama and excitement of Irish sporting life. We do not want to see cherry-picking of major sporting events with a large commercial revenue potential. To their credit, TV3 and RTE cover, week in and week out, the Eircom soccer league which we know from Committee Stage is of great interest to the Minister. Does he wish to promote coverage of that sort or is he happy to sit back and fail to use his legislative role to provide for it? If he wishes to promote sport by legislating for the everyday rather than just the major events, it would be valid to accept this amendment. I have tried to move towards the Minister's position by including the wording of paragraph (f) rather than provide for a separate clause as I did originally.

My last amendment is not as important, but it is valid. If the Minister is willing to steer the High Court in the direction of considering the time of day the event occurs, the period for which rights are offered and the revenue potential, it is valid to ask the court to consider how much coverage will be given to the sport and what the production costs will be. As I said on Committee Stage, such a clause might benefit sporting organisations which cover some of the broadcaster's costs by providing facilities for it.

To address the concerns of sporting organisations which feel they may be losing out, we still have a competitive process in free to air and terrestrial broadcasting. The two primary channels, RTE and TV3, would provide a competitive bidding system as they are not great friends and I cannot see them working in a duopoly. If they talked to each other, it would be a major achievement. As anyone who has been to a house auction knows, all you need are two bidders to hike up a price. If sporting bodies are concerned, they should note that there will be a genuine market in terms of the very limited number of events under discussion. The broadcasters in place and possible broadcasters to come would provide sufficient competition to establish an appropriate market rate. If we leave the Bill as it is and the Minister does not provide some wording to steer the High Court, the court can only understand market rates as those which have been set by satellite broadcasters. The Minister will have failed to achieve his stated goal of protecting the right of Irish people to see on free to air certain key sporting and cultural events. I hope the Minister will see his way to making some changes.

Through amendment No. 12, I seek to make the provisions Deputy Broughan seeks to make in amendment No. 11 while addressing Deputy Eamon Ryan's concerns also. I am of the opinion that the Minister agrees with us with regard to the essence of the issue. There is a difference between the two market places, one of which is for the two qualifying broadcasters – TV3 and RTE – and one of which is an open market where non-qualifying broadcasters will compete. The High Court will be obliged to look at the guidelines we provide and the very first one it sees will require consideration of previous fees, if any, for the event or similar events. In the case of the FAI, the High Court will have to consider previous fees of €12 million for an event. Was that the figure?

It was €7.5 million.

On a point of information, €5 million should be added for the right to broadcast the same game to the UK, which comes to €12 million.

It is very substantial.

That is not relevant to this Bill.

It is the market rate.

Let us say it was €7.5 million, although my understanding was the same as Deputy Eamon Ryan's – I am using the example only to make a point. Deputy Broughan has said that I have been representing the interests of the sporting bodies, which I have, unashamedly, but in this instance I am concerned that qualifying broadcasters will not be able to afford the rates set by the court if the primary focus is previous fees, if any, paid for the event or similar events. My wording seeks to recognise that we should only consider previous fees paid in the market place of free to air television. If amended, the Bill's provisions would refer to previous fees, if any, designated previously for free television broadcasting or similar designated events for free television services.

We are asking the court to consider previous fees within the market place of free to air television as opposed to considering the other market place which grossly distorts the price. My main concern is that if the court decides on too high a rate, the free to air broadcaster will not cover an event and what Deputy Broughan warned against will happen.

The qualifying broadcaster will not cover it and what Deputy Broughan warned against will happen. Sky Television will cover it and people will either have to pay to get the service or they will not be able to access it.

I have two suggestions. Either the Minister accepts one of the amendments or else deletes section 6(a). I would not have a problem with that. If it were done, it would be self-evident to the court that it must take into account previous free-to-air television rates for events.

I can understand the Minister's concern about being too prescriptive to the court. There is a danger of us trying to be too prescriptive because what we are trying to achieve could be distorted by a clever barrister. If the Minister wishes to be less prescriptive, were he to get rid of section 6(a), I would have no problem with the rest of the section. However, if he insists on section 6(a), the requirement that the court must consider previous fees for the event or similar events is a misrepresentation of what we are trying to do, which is to get a sensible market rate based on previous experience within the marketplace of free-to-air television.

I do not think anyone is trying to be political. There is a genuine concern that qualifying broadcasters will not be able to afford the rates set if they are set on the basis of previous events outside the free-to-air marketplace. We either need to get rid of section 6(a), remove the previous fees from the equation and assume it will come under section 6(f) where the court is required to consider such other matters as may appear to be relevant to fixing reasonable market rates. Previous fees are an obvious matter that would come under section 6(f). It is a case of either doing that or amending section 6(a) and trying to be more prescriptive about the marketplace at which this is aimed.

I am in favour of Deputy Broughan's amendment which adds the words, "the needs of free to air broadcasters", to the list of items the court must consider when setting a fair market rate. I know the Minister will quote section 6(f) but it is important this amendment is included. It copperfastens the direction of the Bill.

The legislation calls on the High Court to take into account previous fees for the rights to an event when setting its judgment. Deputy Eamon Ryan's amendment No. 11 specifies that the previous fees, if any, for non-exclusive rights to the event would be a determining factor. I am not sure about this. Had I been present for Committee Stage instead of being in Colombia looking after the rights of Irish people, I might have had more of an idea. Deputy Coveney's amendment No. 12 is better, is more clearly defined and I will support it.

Deputy Eamon Ryan's amendment No. 13 is good. It requires the High Court to take into account when making its determination on the size of the fee the amount of coverage given to the event by broadcasters generally. My understanding of that would be that TG4, which shows more GAA coverage, would get a better deal than TV3. It is a good amendment and I support it.

I will be brief. I wish to make one point in support of amendment No. 10 and the other amendments, especially Deputy Eamon Ryan's.

I urge the Minister to accept the amendments for the following reason. I remember when theTélévision Sans Frontières directive was being negotiated that the tension within the college of commissioners was between the competition commissioner and the cultural commissioner, which was then DG X. It arose because the defence of the qualification of the market contained in the directive was based on the term “event”, a term the Minister uses in the legislation. The competition commissioner was inclined to view something shown on television as a commodity. Therefore, the issue was whether competition was present in regard to something generated in a commodified market. The approach through DG X and our negotiations when I was Minister with responsibility for this area was that we were talking about an event. Therefore, it was necessary to consider the rights of viewers as part of a public watching something that was put on in the name of the nation. It was that view which prevailed.

If the Minister wants the spirit of those negotiations to be carried through, it would make sense for him to arm the court and bodies which view these matters as events, for example, national broadcasters, by giving them something on which to latch their arguments. There is no question that there is a different relationship in the bidding process between those who carry the burden of a national orchestra, commitments to broadcasting in both languages, the operation of schedules across different networks, an obligation to the community and so forth, and those who are free, as Rupert Murdoch classically put it, to use sport as a battering ram through which to establish the type of monopoly he has in television.

The Minister could strengthen his intention to preserve events for free-to-air television for the public by accepting the two crucial amendments Nos. 10 and 13. It is a valid point that, if soccer and sports at different levels are covered by a national service as part of the nation talking to itself, it is unreasonable that this would be impeded because of the cost of bidding in a pure market sense for a significant sporting event with a high advertising take. If the Minister does not accept the amendments, he or a future Minister will find themselves in the position of having to increase the licence fee to enable the national broadcaster to compete with the pure market operator or make subventions to enable it to bid. This is an entirely unreasonable expectation.

The other point validly made is that we do not have an alternative to the qualified market as proposed in the amendments. We do not have a pure market. We have a market that is monopolistic in tendency. This effectively broke the ability of the European Broadcasting Union to offer significant events of a world kind, such as the Olympics and so on, for which the Kirch corporation effectively bid, acquired a monopoly and then went broke.

I understand what Deputy Coveney says, namely, that if we want to allow any space to the court, the Minister would be better off without section 6(a) which steers it in the direction of an established benchmark. If the Minister will not accept the amendments, the least that he should do is drop section 6(a). If that is not possible, all the amendments tabled will improve the legislation and keep it true to the principle of what the directive sought to achieve.

From day one in all the negotiations, and I can only speak for the time when I had responsibility and the officials negotiating reported to me, the entire intention was to protect events for the public and to preserve the right of the culture commissioner to argue to the college of commissioners that this was not a matter of pure competition with a commodity. The outcome of the negotiations was to accept the principle that there could not be purely market considerations.

Section 6(f) is not sufficiently strong. It states: “such other matters as may appear to be relevant to fixing reasonable market rates”. That does not take into account the burden that falls on free-to-air broadcasters, especially national broadcasters. Such issues would be language, general coverage and commitments to covering sport throughout the year. I strongly urge the Minister in the interests of the public and transposing the best intentions of the directive into Irish broadcasting legislation to accept these amendments.

I thank the Deputies for what they have had to say about their amendments.

I do not doubt for one minute their bona fides on their respective amendments. I thank Deputy Michael Higgins for giving us a flavour of the type of scenario under which the directive came forward. Listening to him copperfastens my determination to proceed on this basis in that I can skew the market in favour of qualifying broadcasters in Ireland. I have legislative backing in this respect and I have justification for doing so because of the EU directive. That is where it should stop, however.

The Deputy is pushing, by way of his amendment, the determination of what is a fair price in a particular direction. It is skewing it away from the event organiser in the direction of the qualifying broadcaster. That is why I said on Committee Stage that when one is giving a job to the High Court or an arbitrator, the broader and less specific the issues referred to, the better. If one puts down specific issues one will be favouring one side or the other. That is exactly what would happen if I were to accept any of the four amendments.

The first of the four amendments refers to the needs of free to air broadcasters. Would the FAI not make the case in court? What about our needs? In effect, the Deputy is trying to intervene in a decision of an independent body as to what is a fair price and, at the same time, saying that the court or the arbitrator must take into account the needs, whatever they are, of the free to air broadcaster. What are those needs? If RTE was in a financial strait-jacket in years to come, would the court have to take that into account in determining a fair price? We are asking the court to determine not what is a fair price for RTE but a fair price given the conflicting issues.

That is just one consideration.

It is just one but the fact that one is being prescriptive means that the court has to take that into account. It would be obliged to accord it much more weight than the needs of the event organiser.

Some of the other amendments are not necessary because the legislation is dealing with free to air issues. The fair market price would be based on non-exclusivity on free to air television so the previous price that Sky and the FAI had put in place would not come under—

Can one not say that—

Allow the Minister to speak without interruption.

It would not come under section 6(a) because previous fees for events or similar events, based on free to air broadcasting, would have to be taken into account. That is what this legislation is about.

Amendment No. 14 refers to the estimated production costs for coverage of an event. If other broadcasters were also getting rights, one might as well include that other broadcasters may be making a contribution to the qualifying broadcaster. One would have to take into account that a feed might be provided to other broadcasters outside the State for some of the games, which is normal international practice. If one accepted amendment No. 14, all those additional factors would have to be provided for.

We are far better to put down broad principles and allow a court to come up with what is a reasonable price for all concerned. I accept the Deputies' bona fides, but they are, in effect, tying the hands of the adjudicator, the High Court or the arbitrator, in one direction as opposed to another. This would be unfair and probably open to challenge.

I can intervene under an EU directive to say we are entitled to skew in favour of free to air broadcasters. However, if one is intervening to skew the determination of fair price in favour of one broadcaster over another, this is open to challenge and would possibly lead to legal action, which we would not want to happen.

The Minister removed the references to the Arbitration Acts because he felt they were unnecessary. It still goes to the core of the matter that the fundamental right of people to view the events in question will be exercised through free to air broadcasters. It is a basic right of communication. The events, from whatever sporting or cultural tradition, go beyond the province of the activities themselves and they become part of the cultural spirit of the nation.

Listening to the debate we feel it would make more sense to remove paragraph (a), but if we are to be prescriptive – the Minister has been in respect of some points – why not accept the needs of the broadcaster? We need to take that into account if we are to ensure that the botched legislation of 1999, which I hope this Bill will correct, will work to the benefit of our national life.

We made a very general provision because we felt it would give the arbitrator and the High Court the greatest range of action in relation to what might happen.

The Minister has said repeatedly that we are dealing with free to air, non-exclusive live coverage. By way of amendment No. 11, I do not wish to steer the High Court in any direction or influence the arbitrator too much. It merely states exactly what the Minister has stated repeatedly. On Committee Stage he said the wording in question might clarify exactly the intention of the Bill.

It already states that it meets the purpose of article 3a of the directive.

The Minister will have an opportunity to respond.

As the Minister has said, the directive allows us to say what we are concerned about in our national legislation, namely, non-exclusive rights. I do not see why the small amendment, which the Minister mentioned as a possibility on Committee Stage, cannot be accepted. I would happily withdraw amendment No. 14 if he felt we were meddling too much with the High Court's thinking.

I would like to hear the Minister's response to amendment No. 13. Broadcasters that give a week in, week out commitment to national sports should be taken into account in some way when setting the rate for the once-off, more prestigious events. I am interested to hear the Minister's arguments against that principle. If it is not included in written form, as presented, I do not see how the High Court could possibly agree on the matter.

It is not in the Council directive.

Would the Deputy give way?

The Minister will get a chance to respond. There is a procedure.

I will give way. They were the only points I wanted to make.

I agree with everything the Minister has said regarding these amendments but the problem is that what he has said is not reflected in the wording of the Bill. I do not like to disagree with Deputy Broughan but I would have some concerns about putting in a specific section saying that the court has to take into account the needs of free-to-air broadcasters and not balancing that with the needs of the sporting bodies. That is what I have been trying to do all the way through.

I agree with what the Minister has said but the wording of section 6(a) can be read in a different way and a case could be argued strongly in court. Let us take the example of the FAI again. The first thing the courts will look at when deciding on rates is previous fees paid for an event or similar events but there is no clarification in the Bill of what is meant here. The Minister has said, and I agree, that of course the courts are going to take previous events into account and will do so in the context of free-to-air television coverage of events. One could, however, argue the other case in court because of the lack of clarity in section 6(a).

What is the Minister's problem with deleting section 6(a) entirely, for example, if he does not want to be overly prescriptive? Alternatively, my amendment No. 12 does not skew the decision process in favour of the broadcaster, or the event organiser for that matter. It merely clarifies the market in which the courts have to consider previous fees paid. That is all it says. It does not skew the decision-making process in favour of either side. The wording as exists at the moment is open to ambiguity, which could lead to problems.

I never conceded that the rights that would be argued for in arbitration constituted a property right. While sticking with this Bill tightly, the Minister could go some way towards meeting the spirit of the amendments by even agreeing to changes regarding section 6(f), which states, “such other matters that may appear to be relevant to fixing reasonable market rates.” If this had stopped merely with the words, “such other matters that may appear to be relevant,” it would give some force to the case that the Minister has argued regarding article 3a of the Council directive.

The difficulty the Minister has in his argument about section 6(e) is that when one takes into account the purposes of article 3a of the Council directive, the courts might well argue that the Minister had the opportunity to legislate under the directive, and in particular under article 3a, but chose not to do so and is now limited to that for which he has legislated. If section 6(f) had been shorter than it is at present, the Minister would have been free to draw on section 6(e) in a court case. In limiting section 6(f) by saying, “to fixing reasonable market rates,” the Minister has so circumscribed it that he has cut off all the ground available to him in section 6(e), and I ask him to give consideration to that point.

I do not want to repeat myself, but in general, in giving a job over to the High Court or an arbitrator, we have to be balanced and to allow them to get on with the job and determine matters as they see fit. I could not agree to delete the words "previous fees" from section 6(a). As regards the point Deputy Coveney and, I think, Deputy Broughan were trying to make about non-exclusivity, that is taken care of in section 6(e), which states that account must be taken of the purposes of the Television Without Frontiers Directive.

I do not see the point that Deputy M. Higgins is making in relation to section 6(f) but nor do I think that the words, “to fixing reasonable market rates”, are that relevant. Thus, I would be prepared, if you will allow me, a Cheann Comhairle, to agree to delete the words, “to fixing reasonable market rates”, from the end of section 6(f). I do not think they are relevant. I do not think they should go for the reasons Deputy M. Higgins has outlined, I just think the words are superfluous.

It helps regarding section 6(e).

It probably generally helps because the start of section 6 says that in determining what constitutes reasonable market rates or terms, one must then take into account the six following factors. The sixth factor, section 6(f), in effect covers other matters that may appear to be relevant to the court. From that point of view, I could agree to make that change if that is acceptable.

Deputy Ryan made a point about the level of sports coverage provided by the broadcasters as a whole. Let us take an example where RTE has broadcast the entire championship leading up to the all-Ireland final and TV3 comes along and says it wants access to the all-Ireland final. By including Deputy Ryan's provision we would, to a certain extent, skew the process in favour of one of the two broadcasters in the determination of a fair market price, and the GAA would be the determinant as to which of the two organisations would get the event. The price would be fixed and the GAA could then determine that there would be exclusive rights for one of the organisations only. To a certain extent, therefore, putting that provision in would skew the process in such a way that we could not have fairness, particularly regarding the amount that a broadcaster might be required to pay.

Surely it is fair that an organisation that has broadcast every round will have that taken into account when the arbitrator comes to deciding the price for the final. Is that not fair?

Is the Minister proposing an amendment?

Yes, I propose to delete the words, "to fixing reasonable market rates", from section 6(f), line 14, page 7.

Is that agreed? Agreed. As the proposer of amendment No. 10, Deputy Broughan is entitled to respond.

The Minister has come part of the way to keeping the remit of the arbitrator or the High Court as wide as possible. However, I would still like to have a reference to the free-to- air broadcasters and am still pressing the amendment.

Amendment put.

Boyle, Dan.Broughan, Thomas P.Connolly, Paudge.Cowley, Jerry.Crowe, Seán.Ferris, Martin.Gilmore, Eamon.Gregory, Tony.Harkin, Marian.Healy, Seamus.Higgins, Joe.

Higgins, Michael D.Howlin, Brendan.McGrath, Finian.Ó Caoláin, Caoimhghín.O'Shea, Brian.Pattison, Seamus.Penrose, Willie.Ryan, Eamon.Ryan, Seán.Upton, Mary.

Níl

Ahern, Dermot.Ahern, Michael.Andrews, Barry.Ardagh, Seán.Aylward, Liam.Brady, Johnny.Brady, Martin.Browne, John.Callanan, Joe.Callely, Ivor.Carey, Pat.Coughlan, Mary.Cregan, John.Curran, John.Dempsey, Noel.Dennehy, John.Devins, Jimmy.Ellis, John.Fleming, Seán.Gallagher, Pat The Cope.Glennon, Jim.Grealish, Noel.Hanafin, Mary.Hoctor, Máire.Jacob, Joe.Keaveney, Cecilia.Kelleher, Billy.Kelly, Peter.Killeen, Tony.

Kirk, Seamus.Kitt, Tom.Lenihan, Brian.Lenihan, Conor.McDowell, Michael.McEllistrim, Thomas.McGuinness, John.Martin, Micheál.Moloney, John.Moynihan, Donal.Moynihan, Michael.Mulcahy, Michael.Nolan, M. J.Ó Cuív, Éamon.Ó Fearghaíl, Seán.O'Connor, Charlie.O'Dea, Willie.O'Donovan, Denis.O'Keeffe, Ned.O'Malley, Tim.Parlon, Tom.Power, Seán.Ryan, Eoin.Sexton, Mae.Smith, Brendan.Smith, Michael.Treacy, Noel.Wilkinson, Ollie.Woods, Michael.

Tellers: Tá: Deputies Broughan and M. Higgins; Níl: Deputies Hanafin and Kelleher.
Amendment declared lost.

I am now required to put the following question in accordance with an order of the Dáil of this day: "That the amendments set down by the Minister for Communications, Marine and Natural Resources and not disposed of, including amendment No. 13a, are hereby made to the Bill, that Fourth Stage is hereby completed and the Bill is hereby passed.”

Question put and agreed to.