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Wednesday, 27 Feb 2008

Broadcasting Issues: Discussion with RTE.

I welcome the representatives from RTE, Mr. Cathal Goan, director general; Mr. Ed Mulhall, Mr. Adrian Moynes, Mr. Conor Hayes, Mr. Peter Feeney, Mr. Mick Kehoe and Ms Bride Rosney. I apologise for the absence of the Chairman, Deputy Cregan. I understand he wrote to the delegation explaining the reason for his absence.

The joint committee has invited the representatives from RTE to this meeting to discuss a number of concerns. This meeting is a follow-on of the one held on 18 December 2007 and relates to digital terrestrial television - roll-out and possible implications, the proposed broadcasting Bill, political balance in television and radio programming, the licence fee, the transfer of RTE Radio 1 from MW to FM and LW52 and the RTE superannuation scheme.

Before we begin, I draw attention to the fact that while members of the committee have absolute privilege, the same privilege does not apply to witnesses appearing before the committee which cannot guarantee any level of privilege to witnesses appearing before it. Furthermore, under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. I invite Mr. Goan to make his opening remarks which will be followed by questions from members.

Mr. Cathal Goan

Táimid buíoch as an chuireadh teacht i bhúr láthair arís chun labhairt faoi na hábhair atá ar an clár oibre inniu. Cuirfimid fáilte roimh cheisteanna ó Teachtaí agus Seanadóirí. Go háirithe, cuireann muid fáilte roimh an deis bheith ag caint faoi craoladh digiteach agus na hathruithe móra atá i ndán don chraoladh in Éirinn. I thank the Acting Chairman for giving us the opportunity to appear again before the joint committee and answer Deputies' and Senators' questions. We particularly welcome the opportunity to speak about changes in broadcasting technology and distribution, with particular reference to digital terrestrial television and the major opportunities and challenges this will present for us in the next few years.

Before I open up the discussion to members, I remind them that we have six topics for discussion which we will take individually. Everyone will have the opportunity to discuss each of them, if he or she so wishes. I ask for brevity, as this is purely a question and answer session.

How does the Acting Chairman wish us to deal with the issues?

We are dealing solely with DTT.

I thank the delegation for coming back. I know we planned to deal with many more of the issues involved before Christmas but we were distracted by the issue of cocaine and the "High Society" programme.

I have a number of questions about the potential consequences following the changeover from an analogue to a digital service. Everybody recognises that it would be a positive development if we could provide a digital service in everybody's house to replace the analogue service. However, the changeover period, the cost to households and the need for people to be educated in how to use the new digital service are the social consequences. How is RTE planning to deal with them? A new digital box will have to be installed in every house. What will be the cost of this? Who will pay and will it be subsidised? Those who are perfectly happy with their current service will have no choice but to switch over and bear the cost.

What are the consequences in respect of the channels currently available free-to-air on the analogue system, particularly to people living in Border areas who can pick up RTE but who might not be able to do so under the new digital system? What are the consequences for people living in the Republic of Ireland who are currently able to pick up the BBC, including BBC Northern Ireland, Channel 4, ITV and so on? What will happen to those channels, will they be available on a digital frequency and will they be free-to-air? What channels will be on the multiplex RTE has been awarded? Presumably, they will be RTE 1, RTE 2, TV3 and TG4. Will other channels be available free-to-air?

Mr. Cathal Goan

At some stage throughout these answers, I will ask some of my colleagues to supplement any information I provide. It is important to recognise that the backdrop to this matter is the Broadcasting (Amendment) Act 2007, which directed RTE to establish a national public service multiplex and enabled the Broadcasting Commission of Ireland to license three additional national multiplexes to reach as many people as possible. It is also important to recognise that this takes place in the context of a planned analogue switch-off across Europe, the desired date for which is 2012. While I am open to correction, two countries have not formally committed to a date, namely, Ireland and Portugal. The best example of how the matter is being handled is our nearest neighbour, which has had digital terrestrial television on an ongoing basis for nearly ten years, albeit after a costly initial mistake. Freeview has surpassed Sky as a platform for the distribution of digital television channels in the United Kingdom, which has commenced analogue switch-off in a number of areas.

RTE is only one among a number of players with a role to play, including the BCI, ComReg and other television channels licensed in the Republic of Ireland. A number of different agencies will work with the Department in a way that should maximise public awareness of the switch-off and increase opportunities for people to make a fairly straightforward transition when required.

I cannot give a definitive answer regarding the cost per household because technology, such as digital compression techniques, is changing as we speak. The technique used in the UK to date is being superseded by one that allows a greater number of channels to be carried in multiplexes. As RTE and the other agents have not decided on the ideal set-top box, a price and the technical standard have not been agreed. The BCI has identified a number of desiderata for set-top boxes and compression standards, all of which must be signed off on by the groups. It is RTE's opinion that anything costing more than €100 or that would not allow for the inevitable advent of high-definition television would be a bad idea. We would like to advance a position in which people must make only one purchase that would see them through all of the possibilities of the move into digital television.

We must be clear that one transmission system will not be subsidised over another. Whatever technology is used, be it satellite or digital terrestrial, it will need to be seen to operate on an equal basis. RTE's direct interest is in digital terrestrial television, but if set-top boxes are to be made available to less well-off people or subsidised, it must be done in such a way that they would also be available on satellite and not just for one technology, thereby avoiding any possibility of State aid claims for one technology over another.

I am glad that the Deputy raised the subject of free-to-air channels in Border areas because it is crucial that the North and the South have a joint approach to analogue switch-off. For example, RTE and the other hopeful winners of multiplexes in the BCI project will not be able to power up their transmissions completely until there is an agreed switch-off date in both jurisdictions, thereby enabling the signal to be at a sufficient strength to cover all of the population, otherwise the signals will interfere with one another. It is important that there be an agreed and preferably unified approach to the co-ordination of switch-off North and South.

We have no say in whether the free-to-air channels that are available in analogue will continue to be available. It will depend on the platform.

Will RTE have control over the channels on the multiplex for which it has been granted responsibility? There can be up to eight channels per multiplex.

Mr. Cathal Goan

Yes, but let us be clear - the transmission cost in respect of any channel carried by the RTE multiplex, ours or otherwise, will be paid for. We would not be in a position to carry other channels without the agreement of every party involved, be it the BBC or so on. The BBC is in separate arrangements with other distributors. While we would favour a free-to-air arrangement that would substitute for the current spill-over, it is not an obvious option.

I thank Mr. Goan for taking the time to return to the committee. Regarding the European date of 2012, it would be a matter of some embarrassment were we unable to join our European partners. What are the obstacles to making the commitment and will we make that date? Will Mr. Goan clarify whether the Minister will make the announcement?

When the British switch-off takes effect in Wales, the impact on our east coast will be the denial of services to a certain number of customers. Representing County Wicklow as I do, I am concerned by this. Will Mr. Goan provide the committee with information on this matter? What is the timeframe in respect of digital audio broadcasting and how is it to be managed?

Mr. Cathal Goan

My colleagues should feel free to join in. We are all working on the assumption that 2012 is the switch-off date from a technical point of view. From RTE's perspective as the owner-operator of the transmission network, this does not present a difficulty. We have advance plans on which Mr. Hayes and Mr. Kehoe can elaborate. Regarding the co-ordination between the North and the South in maximising signal strength and coverage for both jurisdictions, I am unaware of obstacles other than those to which I alluded. Does Mr. Hayes wish to add something?

Mr. Conor Hayes

Deputy McManus asked a range of questions and, for those of us buried in the detail, it is difficult to ensure we have relayed all of the information in the correct way. The backstop date for the EU is 2015, but everyone is considering 2012. We would desire an earlier date if possible to encourage better co-ordination with Northern Ireland. Various discussions are occurring at political level in this regard.

With regard to the east coast, our obligation is to roll out one multiplex but another three multiplexes will be licensed by the BCI for commercial purposes between now and 2012. Our approach has been twofold, first, to design the transmission network to ensure we can roll out one multiplex. We tried to approach it from a viewer perspective and decided there had to be co-operation in the form of a platform that might deliver the service to a viewer. Viewers do not care if it is one or two multiplexes or how we struggle to get to that point, they want to watch programmes. Separately, we published notices in the EU journal, asking people if they wanted people to partner us in another form of collaboration where we might apply for the three commercial multiplexes. We did not want to be directly involved in its operation to encourage that form of collaborative approach. We are trying to ensure the DTT gives the best viewer experience as an overall platform. We are still involved in that process but are slightly tentative. The BCI will not advertise its licenses until next month so until that time we are not in a position to say much more.

Other initiatives, undertaken by the Department and others, mean that many other people are interested in applying for those multiplexes. It is important that people co-operate.

Mr. Cathal Goan referred to the boxes. When the BCI publishes its license conditions, it will set out conditions of the minimum technical characteristics of each box. Until that is published we cannot say more. We have an aspiration for compression standards, MPEG-4, of which the current standard is MPEG-2. We know that high definition is coming down the tracks and we would like a box that is capable of receiving a high definition signal and outputting it in both high and standard definition. Not everyone can afford high definition televisions but we do not want to simulcast programmes in high definition and standard definition because the cost of transmission would make the system uncompetitive with other platforms. It would make it prohibitive, especially for poorer people who are dependent on our free-to-air network. Making sure the project is economic is not a matter of profit; it involves designing it in a cost effective way, with components made in an efficient way and representing an attractive offering to people. This is part of our interest in commercial multiplexes.

We are keen to encourage other parties because that will improve the economics of the platform and mean that the form of set top boxes will be of a better standard. The commercial operators must consider subsidising or placing large orders because there is a major difference in price. One pays a much lower price per unit when buying 100,000 boxes compared with 50,000.

It is important to get commercial operators into this area. In earlier times when spectrum planning was being organised, ComReg, the BCI and RTE had the objective, in terms of the way the sites were configured, to maximise the number of houses that could receive a DTT signal without an aerial. Many people outside of urban areas require an aerial anyway but others do not need the cost of putting up an aerial. Many of these factors have been considered to design the system to be as attractive as we can make it to the ordinary punter. It will not compete with Sky Digital or UPC, which can offer 150 channels and a broader service.

Mr. Mick Kehoe will talk more about Wales. The objective is to cover 90% of the country from 13 primary sites.

The Black Valley again.

Mr. Conor Hayes

We had an argument about what I call the Mitchelstown problem because that is where I am from. When examining coverage the spectrum planners in all areas use software that refers to census documents and electoral areas. They did not have access to the geographic spread of houses within an electoral area and made the assumption that everyone, in the case of Mitchelstown, lived in the courthouse because that is where one votes in Mitchelstown. They assumed 3,300 people lived in the courthouse but that building is on top of the hill and all the people live at the bottom of the hill. When examining the ordnance survey map of this area that I know well I pointed out that people would not receive coverage. We have retrofitted to prioritise infield sites to improve the level of coverage from the beginning. By the time we have finished, probably in 2013, we will have approximately 190 sites. In the early stages we will have 44 sites, 13 primary sites and 31 secondary sites, comprising 90% of the population. We are trying to prioritise the timing of this so that we can address the east coast, which will be affected by switchover in England and Wales earlier. Later, we must ensure coverage in Northern Ireland.

Can the delegation give an idea of the extent of the problem of switch-off in Wales? How many people will be affected?

Mr. Conor Hayes

That depends on the coverage. There are 100,000 homes on the east coast. Many of these already have other services and are not dependent on the network. It could be as many as 100,000 people. We can address the RTE part of that, in terms of ensuring these people get public service multiplexes.

As good as RTE is, it may not satisfy the consumer.

Mr. Conor Hayes

We recognise that. In seeking a solution to the platform it is not our function to promote commercial channels. Against that, we recognise that if there are commercial channels on the box it will be a more attractive proposition for people. It will make the overall platform more successful. It enables us to discharge our public purpose if the platform has a wider constituency. The difficulty with the BBC is that there are pre-existing agreements on the distribution of the BBC on Sky and UPC. We cannot break the law. We made a suggestion about reciprocity, such that BBC 1 would be shown here and RTE 1 shown in the North but that will only account for one or two UK channels, not all. The BBC receives substantial amounts of money from UPC and Sky for carriage and rights of BBC television. The commercial operators would have a fair point if we suddenly broadcast this free to air. They would complain we were being anti-competitive. The likelihood is that various operators, many of whom we have spoken to, would seek some level of soft pay, a small level of subscription, to ensure people can receive primary UK terrestrial channels. There seems to be no other way around that problem.

Tá mé thar a bheith buíoch daoibh as ucht teacht isteach arís ar maidin. Gabh mo leathscéal nach raibh mé anseo an lá deireanach ach bhí commitment eile agam. D'éist mé leis an méid a bhí le rá agaibh, go háirithe an méid a dhírigh isteach ar chraoladh digiteach agus leis an míniú a thug Conor Hayes. Caithfidh mé a rá nach bhfuil bealach níos simplí ná seo - I have this nightmare of 190 sites, planning permissions, hearings and appeals with 190 groups writing letters to 166 TDs and it still will not be received in the Black Valley or the lower reaches of Mitchelstown. I raised this matter with Mr. Goan a couple of years ago. Does an easier way exist to do this?

Before we all fall off the table, the Astra satellite is up there along with 24 others, and this answers every issue raised here. I meant to check the legislation prior to this meeting but I did not get a chance to do so. I understand it requires us to have an all-Ireland reach for part of the multiplex. This is also reflected in what is loosely referred to as the Good Friday Agreement and they should mirror each other in some sense.

I want a simple answer to one question. Recently, I walked into a ordinary shop, bought an LNB and inserted it on a dish. I can now get free to air channels including BBC 1, 2, 3 and 4 and ITV 1, 2, 3 and 4. I can also receive Malta and Cyprus television free to air. I can take this as far as the Urals and receive every single station except RTE. We do not need a huge transmission network. Even if we do, if we also had it on satellite, all of the questions about the all-Ireland aspect and the problems on the east coast would be answered. People would be able to receive Welsh television but also Ulster television, ITV and London television along with all of the other channels.

I do not want Mr. Goan to respond to this with copyright issues. If he does I will tell him to let the screen go blank if it arises. It has been done before for football matches. I want to be able to tune in to "Prime Time", "RTE News" and other programmes. The technology is there to allow a switch-off where copyright or cost implications are raised. I want to know, simply and cleanly, why we cannot answer all of the problems raised at this meeting by unencrypting the RTE signal. It is even more irritating because anywhere in Europe one can tune in and see the strength of the RTE signal but one cannot see or hear it, apart from the radio stations. This is because the arrangement RTE has with Sky is to have it encrypted.

I recall ITV had a major court case with Sky because Sky charged more to unencrypt rather than to encrypt. The outcome is that ITV is now free-to-air. This is a major issue. It would deal with the multiplex issue as well as the question of which station it would be on. It would cover the legislative intention, it would get rid of all of the planning permission difficulties, cover everywhere in Ireland and deal with the all-island matter. Whatever it would cost, it would cost less than what we are doing.

I see Mr. Hayes is shaking his head. I will take a lot of convincing that building, maintaining and operating 190 sites is cheaper than the couple of million euro, a cost which is getting cheaper, we would pay each year to rent a couple of channels on a satellite. I have examined the cost of this and if people wish to discuss it we can do so. This is a simple issue. People have many reasons for not wanting to get into it but none of them make logical sense.

Mr. Cathal Goan

The first reason is that we have a legal obligation under the Broadcasting (Amendment) Act 2007 to establish a national DTT--

Sure, and I asked these questions of the Minister when the Act was going through the Houses. I did not get a satisfactory answer at that stage either.

Mr. Cathal Goan

There is another issue which we should not disregard entirely. DTT on 190 sites, and Senator O'Toole will be glad to know the vast majority of them have planning permission, is a national sovereign platform. Whatever else it is, a digital satellite platform is not a sovereign platform. One would have to share by agreement with others in terms of electronic programme guides.

Senator O'Toole is right that many broadcasters across Europe are unencrypted. RTE's broadcast schedules are approximately 45% home produced and 55% acquired programming. Senator O'Toole may dismiss the copyright issue and state we should leave the screens blank. Frankly, it would untenable for us to have a blank screen for 50% of our afternoon children's programmes, and a blank screen for all our sporting activity because we only have rights for the sports programmes we have for this territory.

Of course it would be good to have RTE programming available internationally. We intend to address this separately, through the other part of the 2007 legislation, which requires RTE to set up a television broadcast service for communities living outside the island of Ireland.

Why can we not provide this service now? The question of a sovereign channel is easily dealt with. There are other satellites, including Eutelsat and satellites owned by the European community. I am not interested in paying money to Mr. Murdoch or his like. I agree with Mr. Goan on the sovereign ownership issue but it is not an insurmountable difficulty. How can places such as Malta and Cyprus deal with it? I do not understand.

Mr. Cathal Goan

I do not know how Malta does it because I have not asked the Maltese broadcaster. I am sure the programming they broadcast is only the programming over which they have rights. As I stated, the screen may be blank more often than it is full.

On the issue of why we cannot do this already, we are actively pursuing the establishment of a service for the Irish abroad. I am not committing to a date but we are in active talks with operators of satellite services so a free unencrypted version of RTE, together with programming from TG4, will be available to the United Kingdom.

Could not every one of Mr. Goan's difficulties be dealt with by RTE doing what Sky does? In other words, allowing everybody within the jurisdiction to watch a satellite-transmitted programme from RTE free-to-air but with a card.

Mr. Cathal Goan

It might deal with some of them but again, the legislation is for digital terrestrial television based on a number of sites which have been internationally co-ordinated so we can have a terrestrial television solution in the future. This is what we are legally obliged to do and this is what we will do.

I thank Mr. Goan.

Mr. Ed Mulhall

Another point is that this solution requires everyone to have a satellite dish. A major challenge with digital terrestrial is that we want to have a universally available free-to-air service. This is one of the basic principles of public broadcasting. The real challenge for us is that because of the switch over and the technological change, we face an uphill battle to close the gap on the competition from a strongly embedded satellite system and a long-lasting culture of cable services in the main cities.

Mr. Conor Hayes alluded to the policy challenge in terms of ensuring that if digital terrestrial is the model, it happens in a viable way and all parts of the platform happen at the same time so the consumer is not faced with multiple choices for the basic services or unable to access the complete range of services from the start.

Mr. Conor Hayes

The primary television reception mechanism in Malta is DTT, not satellite. In 2002 we examined the satellite option. The Senator is making a common sense point, in that satellites are already there and can achieve widespread coverage, so why not make use of them? We examined that option but it is much more expensive than one would think, there is not much space available and there are significant costs involved in the encryption technology one must use. For us to broadcast on a continuous basis would be prohibitively expensive. We broadcast "Desperate Housewives" last night but we could not make that free-to-air because we only buy the rights for that for the Republic of Ireland, for 4 million people.

Now, that is a serious matter.

Mr. Conor Hayes

Absolutely. There are 65 million people in the United Kingdom. What we would find, ultimately, is that we would not be able to purchase rights for Ireland.

I accept that point.

Mr. Conor Hayes

It undermines the viability of the overall project. It pushes in a direction we cannot go. The Department and the Minister have decided that DTT is the model and that has been enshrined in legislation. We are working on the basis of trying to put--

RTE could restrict the satellite reception to people living in the jurisdiction. That is not difficult.

Mr. Conor Hayes

Yes, but we would have still have to use encryption technology and we would have all of the same problems. People would have to have satellite boxes and so forth. As for the issue of planning permission, I hope we will not have planning permission problems, but one must bear in mind that we have already got --

Mr. Conor Hayes

We already have 72 sites as it stands. In the main we will place DTT on all the existing sites. There are a small number where we will have to employ different ones. In the 13 primary sites that have been identified, we will have three new masts to erect, two of which will be in an identical position to the current masts and the third might be in a slightly different position, in which case planning permission will be an issue. As far as we know, though, those issues are reasonably well under control.

B'fhéidir go bhfuil mé beagáinín ar leathaobh leis an cheist seo, ach tá sé in am dom dul go dtí cruinniú eile. I may be a little peripheral with my question, but what does all this mean for transmission availability, particularly in Northern Ireland? Given everything that has happened in the peace process, and also RTE's proposals regarding the abolition of medium wave, which will deprive areas of--

Senator, medium wave will be discussed later on.

Unfortunately, I have to leave the meeting and I just wanted to raise the question. Perhaps Mr. Hayes can answer my question later on but--

I am sure we will have a chance to come back to the issue. It is the fifth item on the agenda, but we are still on the first item.

It also relates to the transmission of the television signal throughout Northern Ireland, which is not available. It should be available in every corner of Northern Ireland. In what way will the current proposals contribute towards meeting that requirement?

Mr. Cathal Goan

It is entirely outside RTE's compass to guarantee an analogue, free-to-air signal to Northern Ireland because as Mr. Hayes has already mentioned, we are subject to international agreements. For the purposes of international agreements, Northern Ireland is part of a separate, sovereign arrangement. The agreements are all internationally regulated. We do not have transmitters in Northern Ireland so we cannot get any further than we do, except via overspill. The same would apply with DTT. Unless, as we have already said, there is a co-ordinated approach, both North and South, to making sure that RTE is available in Northern Ireland, it will not happen. Clearly, it is something we would like to happen. We made a submission to Ofcom, the British regulatory body, last month in which we pointed out that there is specific mention of TG4 in the Good Friday Agreement. While there is no similar mention of RTE in the agreement, we made the point to Ofcom that while we agree that TG4 should be available as widely as possible, particularly in the context of supporting the Irish language, the fact is that the English language is far more widely spoken by the Nationalist community in Northern Ireland. Therefore, logically, RTE 1 and RTE 2 should be similarly available. That is what we would like to see happen on DTT in Northern Ireland.

Similarly, we made the point as far back as the time of the New Ireland Forum, of blessed memory, that there should be reciprocity of signal across the island of Ireland. Any communications I have had with the BBC or with interested politicians in Westminster, Northern Ireland and here, has been to the effect that we should have reciprocity. However, as Mr. Hayes has already said, there are issues for other broadcasters that we cannot circumvent ourselves, however much we would like to.

I welcome the representatives from RTE. I am a fan of dates. Does Mr. Goan have any date set for the conclusion of deliberations on the BCI? Is any date set by which RTE will arrive at a final position on the set-top box issue, that is, the type of set-top box and the cost thereof? The sooner such a date arrives, the sooner the system can be rolled out. It is obvious from what Mr. Hayes has said that a lot of the structures to be used are already in RTE ownership. I assume much of the signal will be coming from Mount Leinster type masts. Has RTE spent any further funds on the construction of new masts, if new masts are necessary?

Is there an opportunity for co-operation regarding other infrastructure? We are currently debating broadband services in the Dáil. Is there an opportunity for RTE to engage in some form of co-operation on broadband coverage? Now may be the time to consider that, rather than wondering later why RTE did not do it when it was rolling out DTT.

Mr. Cathal Goan

I will deal with the first question and Mr. Hayes will deal with the issues of costs and the masts. Regarding the dates, the BCI has announced that it will advertise the licences next week, on 6 March. There will be a two-month period in which people can apply. Then the BCI will have a public hearing on the applications and will make a decision on the allocation of the licences in June or July of this year. Clearly, whatever comes out of that process, RTE will immediately engage with the successful companies to do make sure our approach to this is as co-ordinated as possible. The BCI process will be of a kind that whatever the technical standards agreed there will be similar to RTE's ones, so a set-top box arrangement will be arrived at fairly quickly. However, the consumer product will not be launched for at least another year and a half so there is time for people to co-ordinate their efforts.

I neglected to answer an earlier question regarding public information, which also feeds into a point made by Mr. Mulhall. When the public is first made aware of this, it should be made aware of a very straightforward proposition, namely that one buys a box, puts it on one's television, receives a defined number of services and will no longer need any other way of receiving television. That should be a very comprehensive, nationwide campaign, in which RTE will play its part. In fact, we are obliged to do so under the legislation. That is some time away yet, however. The key issue is that the platform is formed, everybody agrees on what is going to be offered, the infrastructure is built and when switch on happens, members of the public know they must go to the shop, buy a set-top box and plug it in to obtain these services. I am confident that by the end of the summer we will be in a much better position to indicate when that date will be.

Mr. Conor Hayes

There have been a number of discussions about boxes but I wish to make it clear that RTE will not be deciding on the boxes. We do not have that power. Most likely, there will be several different boxes. The BCI will conduct its process, run it through and select companies for the commercial boxes on the basis of the criteria laid down. They will then allocate licences and we would expect that part of the licence conditions will set out the minimum technical criteria for the boxes to ensure reception of all channels on the platform. That, of itself, will dictate which manufacturers can comply but RTE will not be able to say people can only use one specific box. That would be completely outside of our power. That being said, one would presume that if a platform is brought together and there are a number of commercial operators, part of what they would seek to do in any launch situation would be to select a number of manufacturers and drive the price of the boxes down to the lowest level possible. They would presumably be willing to subsidise part of that. As matters stand, both Sky and UPC subsidise the boxes in some of their digital packages. Mr. Goan referred earlier to the possibility of a State subsidy. For example, 25% of purchases of television licences are by social welfare recipients who may not be able to afford boxes. As we understand the European rules, if a subsidy is provided for a particular box it must be platform neutral. The Department would have to construct the subsidy in that way and we would have no influence on the matter. It is not for us to say whether subsidies should be provided through vouchers or the purchase of boxes.

In regard to masts, we are currently estimating a budget in the order of €90 million to €95 million for the entire transmission system. This week we will publish on our website indicative pricing for others who want to apply, all of whom will be treated fairly. We already co-operate closely on infrastructure.

Mr. Mick Kehoe

In addition to broadcasting and carrying RTE services, we carry TV3, Today FM, Newstalk and a number of other national, regional and local radio channels. We also have arrangements with mobile telephone and broadband operators. Few broadband operators are not being facilitated by our masts and infrastructure. However, not all of our infrastructure is suitable because broadcasting is done from mountain tops surrounded by sparse populations and we use a long distance signal, whereas broadband requires more localised transmission. We co-operate as far as we can with other operators to provide our mast as a service but there are restrictions in terms of the limited space available on masts. On Mount Leinster, for example, everybody wants to point towards the population centres in Carlow and Kilkenny whereas the other side of the mast is empty because it points towards the top of the mountain.

What has RTE spent thus far?

Mr. Conor Hayes

Relatively little at this stage. The three large masts which have to be erected will cost us approximately €23 million. They will have to be constructed over two summers and a winter because of weather issues. We will commence the first two this summer.

Can licence fee funds be spent on the roll-out or does it come from general funds within RTE?

Mr. Conor Hayes

We spend our licence fee money on programme content. The Deputy might argue that in a Jesuitical sense but we have worked out a particular way of spending and we try to be as transparent as we can.

This is an Oireachtas committee not a Jesuit chamber.

Mr. Conor Hayes

We will seek to include USB ports on set top boxes to make them broadband enabled. That will allow for a degree of convergence between broadband and digital terrestrial television.

I welcome Mr. Goan and his colleagues from RTE and thank them for their presentation. In regard to mast locations and difficulties with planning permission, I am aware as a representative of a rural constituency that people do not want to see a litter of masts across the countryside. The location of the three large masts being constructed might be indicated.

I seek assurance that nobody will be denied services when the switch-over occurs. Can RTE assure us of 100% penetration into rural Ireland? If not, will it be possible for people to continue on analogue when digital terrestrial television commences?

In many cases in rural Ireland, people will be worse off because at present they can receive channels such as BBC and UTV but when we switch over they will only be able to get the package transmitted by RTE. Where will TG4 and TV3 stand? In parts of rural Ireland a special aerial is need to receive those channels.

Mr. Cathal Goan

At present, RTE1 and RTE2 are available to 98.5% of the population. We do not have 100% coverage of the country. RTE spends in the order of €300,000 per year on improving and extending coverage. The purpose of achieving 190 infill sites by 2013 is to replicate the level of analogue coverage. I am loth to offer a guarantee other than to say we will work as hard as possible to ensure digital coverage is equivalent to analogue with the level of investment we propose. Our primary purpose is to maintain universal free-to-air coverage.

The legislation guarantees similar coverage for TG4. In analogue, the channel has a slightly narrower coverage than RTE, at 95%. TV3 has analogue terrestrial coverage of 85%. That channel has the option of applying for its own multiplex but the legislation also allows for it to be carried on the public service multiplex. If it is prepared to pay for it, it will achieve the same coverage as RTE1 and RTE2.

I neglected to answer a question put earlier on the other services to be carried on the national public service multiplex. We assume RTE1, RTE2, TG4 and possibly TV3 will be available. We are also making provision to carry an Oireachtas channel and are considering the possibility of a catch-up channel for people who did not have an opportunity to watch programmes on their first airing. We will refine our services as other proposals arise.

I welcome the delegation members and Mr. P.J. Bradley, MLA, and Councillor Tim Atwood from Northern Ireland. Their presence is a sign that Northern Ireland and the Republic are intrinsically linked when it comes to providing broadcasting services.

Are places which have poor coverage included in the 98.5% coverage figure? The representatives can revert to me with answers because, as a parliamentarian, I find it disadvantageous to put down parliamentary questions only to be told they are not relevant to the Minister concerned. Places like Gortfad, Clonmany, Milford, Derryhasen and Downings have very poor signals. In respect of the remaining 1.5%, what assurances will these people get? I refer in particular to places like Meenletterbale in north-east Inishowen, which not only lacks RTE but does not even have broadband or mobile telephone coverage. What assurances can we give these communities that digital terrestrial television will be the solution to their needs? We often discuss next-generation technology but these are places where people do not have access to RTE. I would be involved in next-generation communications technology. There are examples within our country and society where people do not have access to RTE, so what assurances will be given to such people? Will they be encapsulated in this new service provision, which they ultimately should be as within the Broadcasting (Amendment) Act 2007?

Mr. Cathal Goan

As I stated, it is clearly not in RTE's interest if people who want to watch RTE cannot do so. Our aim has always been to extend coverage and we are doing this currently. There is a very big difference between analogue and digital. There will not be questions of poor coverage or interference and a person will be able to receive the channel or the person will not. That is a difference between analogue and digital.

I will not commit here to the very specific areas mentioned by the Deputy as I am not in a position to do so. If he wishes to engage directly with our network operation, those personnel can answer those detailed questions. Whatever we do about DTT, we are not responsible for mobile phones and broadband.

I appreciate that but I was using that as an example of those who are disadvantaged and would find it ironic that we are even having this debate. They have no access to technology whatever.

Mr. Cathal Goan

I understand that.

I would be delighted to make contact with the network people because these communities have been fighting this battle for a long number of years.

We have given that a fair airing so we will proceed to the proposed broadcasting Bill. I ask members to be as brief as possible.

This is an area in which RTE has a big interest. I will try to keep my questions as focused as possible because there is a range of areas covered by this legislation, which will be quite large.

Is Mr. Goan satisfied with the new structures being proposed for the broadcasting authority of Ireland? There was a concern a number of months ago within RTE that it would essentially be established as a company under the Companies Act, with the Minister as the sole member. Is that still a concern because I know the Department was considering listening to concerns in that regard? I would like an update on that if possible.

With regard to accountability to the Committee of Public Accounts and other Oireachtas committees, we previously discussed whether it is reasonable that when and if RTE is set up as a company under the Companies Act, the board of directors would not be brought in before Oireachtas committees. The CEO could be brought in. I would like the views of the delegation on that, particularly in light of the board within the BCI coming in here to answer questions. The chair of the board of the BCI expressed some concerns in that regard, particularly considering who he is and some of the other jobs he is doing currently.

What are the views on the new role the broadcasting authority of Ireland may have in determining or amending the charter RTE abides by? The new broadcasting authority will essentially be a single content regulator across all broadcasting in Ireland, a principle we all buy into now. Should that content regulator also be influencing RTE's charter or should that be an issue between the Minister and RTE itself?

I have one or two other questions and there will not be as many people posing questions on this issue, so it might not take us as long as the previous matter.

With regard to policy directives, I have a concern there may be too much potential for ministerial interference. I understand this is under head 32 of the Bill and it basically permits the Minister to issue policy directives to BAI. What are the general views of the delegation on the power the Minister could potentially have when this legislation is concluded and is there is a concern that it could interfere with the independence of RTE?

The BCI has raised a specific concern over the role RTE may have on local and community broadcasting. The BCI states:

Commission policy to date has favoured the non-involvement of RTE in the local/regional sector on the grounds that private broadcasters could not compete with RTE, ultimately leading to their dominance of the sector. Furthermore, it is considered that, as a national service, RTE should remain focussed on the development and maintenance of national services and their non-involvement in the local/regional sector would also provide opportunities for new broadcasting companies to develop.

What is the view of the delegation on this? My view is that RTE's decision to pull out of local radio in certain parts of the country is a very negative decision, particularly in my part of the country in Cork. There is an opportunity in this legislation for RTE to reinvest and look at local community broadcasting over television and radio networks. What plans are there in that regard and what is the view of the BCI opinion, as the same personalities are likely to be involved in the BAI?

My final questions relate to paying for the new structures of the broadcasting authority of Ireland. My understanding is a levy will be proposed on all broadcasters. Will that levy essentially be able to come from a licence fee? I know we will come to the licence fee at a later stage but I have another series of specific questions on who decides on the licence fee and increases. I will ask them at a later stage.

The Deputy has done very well with eight minutes of questioning.

It is a serious issue.

Mr. Cathal Goan

To be clear, we welcome the opportunity to engage on this issue. It is 16 months since we last discussed this issue, when the general scheme was discussed and we had the first e-consultation on draft legislation. That was a welcome opportunity for everybody to contribute. I am afraid I am at a disadvantage in that I do not know the overall shape of the new legislation other than that the issues which arose under the general scheme will in one way or another be covered.

To deal with the structure of the BAI, I would reiterate the observation RTE made at the time, which was that it seemed unnecessarily over-representative in that the BAI would consist of an authority and two separate committees, all of which would be directly appointed by the Minister. There would be the possibility of 27 people involved in different ways in the regulation of broadcasting.

A possible approach would be to look at other regulatory functions and simply have an executive regulatory function with clearly defined roles both in the awarding of licences and in the monitoring of compliance with the conditions attaching to those licences, including of RTE.

On the Companies Act, RTE argued there was potential for its independence to be interfered with if there was to be a ministerial shareholding. There would certainly be a perception that RTE would be open to direct political interference, which would not be a welcome change. We also pointed out that if there were requirements on RTE to have better governance, and if that was the concern at the heart of this recommendation, this could be achieved by putting specific aspects of the Companies Acts into RTE's own governing legislation. This is an alternative to changing it from being a statutory corporation.

It is important we recognise that the Broadcasting Commission of Ireland, BCI, has played a vital role in the promotion and licensing of new broadcast services. Whatever the reservations people expressed in the past, the broadcasting environment is now different and there are many players, albeit fewer than there were previously due to a concentration of ownership. We accept that the BCI will become the broadcasting authority of Ireland, BAI, and recognise that it will no longer be simply a matter of the governance and promotion of commercial broadcasting.

RTE, the national public service broadcaster, is a not-for-profit organisation. We are interested in making money and do so effectively but the primary purpose of this is to reinvest in our schedules across radio, television and, hopefully, given new legislation, on-line. Our purpose is fundamentally different from, but not incompatible with, the entirely legitimate purpose of the commercial operators; the BAI, whatever its structure, should recognise this.

Regarding accountability, the chair of the RTE Authority has appeared before this committee in the past and I do not think that there would be any problem in the chair appearing before it in future. Surprise was expressed at the general scheme which suggested that the director general would come before the committee but there was no specific reference to the board, although this may simply be a matter of tightening it up. However, there is a question of duplication of the work of the Committee of Public Accounts and the Joint Committee on Communications, Energy and Natural Resources. I do not know the answer but this may be something that will emerge when the legislation--

We would see a difference.

Mr. Cathal Goan

That is something that may emerge if the Bill is published in the next month.

RTE's position is the charter should be a matter for the Minister and public representatives, rather than the BAI. We believe we should look across the water at the experience of the BBC with its charter and its direct relationship with legislature in that regard. I do not think this position has changed and I do not know what the Bill will say in that regard.

Regarding local services, reference was made to RTE's decision to stop Cork local radio. That happened some time ago and it is easy to analyse how things could have been done differently in hindsight. I believe that, where possible, RTE should be involved in local services but the position taken by the BCI is at variance with this view. We have no specific proposals at the moment but the notion of this possibility being cut off is an unnecessarily smothering prescription for RTE.

Mr. Adrian Moynes

It is important that Deputies and Senators note that RTE radio is already extensively engaged in local and regional broadcasting activities. Half of the radio service is located on the west coast, from Derrybeg, through Castlebar, Galway and Casla to Baile na nGall. Lyric FM has its headquarters in Limerick. More than one third of people working in the radio division are based in the west of Ireland. Raidió na Gaeltachta has the dual role of providing a national and international service for Irish speakers in addition to a constellation of four regional broadcast services in the Irish language. Lyric FM is doing sterling work on local arts in the west.

What happened in Cork occurred seven years ago in very different circumstances. RTE's local radio service there was serially denied an effective transmission frequency to allow it serve the area in which it was set up. I drafted a number of the letters at the time seeking an improvement in the frequency that would enable us to serve the community. We were unsuccessful in this regard and I believe this was because at the time public policy was not disposed towards RTE having a higher profile in local radio services. It is important that we be involved in local radio in future but we must have regard for people in the independent and commercial sectors who are making investments and are licensed under public policy.

We have no careerist ambitions and have no interest in being dominant but we would like to provide a voice in parts of the country where there are inadequacies in the discussion of local public affairs and limits in the capacity of local services to provide coverage of them.

Mr. Cathal Goan

Deputy Coveney also asked about the payment for the BAI and the levy. This is a charge that will apply to RTE and to a proportion of the overall operating costs of commercial broadcasters; there will not be a distinction between the licence fee and commercial revenue in this regard. I do not know the answer and we will have to see what the legislation proposes.

I have nothing more to add as the questions and answers have been comprehensive.

Do any members of the committee wish to comment on political balance in television and radio programming?

I want to be direct on this issue and I will speak for my party. We are concerned that the new mathematics of the Dáil, in terms of Government and Opposition representation, should be reflected in coverage and in the appearances of people on RTE current affairs and political programmes. There are examples where this occurs and examples where it does not. What systems are in place at RTE to ensure consistency and political balance across programming? This applies to the Government, the Opposition and all political parties.

"The Week in Politics" is very careful to reflect in its programming the representation of parties in the Oireachtas. Fine Gael makes up 67% of the Opposition and exactly 67% of Opposition representatives on "The Week in Politics" come from Fine Gael. This is very impressive and might be compared with figures for May 2007 to mid-January 2008 relating to "Questions and Answers". The figures do not reflect in the same way the percentage representation of the Opposition versus the Government. How does the interaction between the producers of individual programmes and the hierarchy within RTE work? Who ensures political balance? Is this decided by the production teams for the individual programmes, or are they given guidance?

My other question relates to qualitative balance within programming. Is it acceptable that Ministers clearly decide at times not to appear on programmes in order to avoid difficult questions, and Government backbenchers are instead made to do the job that Ministers should be doing? Has RTE considered having, for example, an empty chair and saying it had requested that the Minister appear but he or she had not done so? With regard to the incident in which John Crown was essentially no longer invited to appear on "The Late Late Show" because the Minister would not appear--

Mr. Cathal Goan

That is absolutely not true.

Mr. Goan will have an opportunity to answer the question and I would be interested in hearing the answer because it was a controversial matter at the time.

If there is a request from RTE for a Minister to appear to discuss a vital issue of national interest but he or she refuses to do so, does that affect RTE's decision on who should appear to represent the Opposition? My fundamental question is about the structure in place to ensure and reinforce political balance in terms of the representation of the Opposition parties versus the Government parties, the independence of individual programme makers, whether on radio or television, to make that decision, and the interaction between production teams and the hierarchy within RTE.

Mr. Cathal Goan

It is important to distinguish between a period in the run-up to a general election, when we adhere scrupulously to the relationship between the percentages of votes enjoyed by the various parties in the previous election and the way in which we represent them on different programmes - this is done on almost a daily basis throughout the period approaching a general election - and generally, when we exercise no such restraint but rather look to the totality of a programme to judge its fairness. Some programmes require different people in different ways for different purposes. "The Week in Politics", for example, is a programme of a specific type which typically has a Government representative and an Opposition representative. Other programmes such as "Questions and Answers", depending on the topic involved, have a variety of politicians, sometimes from one Opposition party and sometimes from another. The cumulative effect to date was, Fine Gael argued, an under-representation of the party compared with, for example, the Labour Party, which it argued was over-represented. That is the cut and thrust of how people position themselves. Has RTE been unfair with regard to the plurality of voices available to discuss different issues of public interest? I do not believe so. When we are made aware of people's feelings about the preponderance of one voice over another, we listen. We have regular engagements, as the Deputy knows, with the Fine Gael press office, the Government press office and the Labour Party press office. We make ourselves available to discuss people's perceptions of how these matters are managed. In the overall scheme of things we do that job conscientiously and well.

The Deputy asks how we ensure fairness in representation on a regular basis. We do not control individual programmes and stop them moving from the centre because one programme has a preponderance of one side over another. At meetings we regularly query the presence of a certain person rather than another with reference to his or her capacity to speak on a given subject.

On the appearance of Ministers on programmes, obviously we would prefer the principals on certain topics, although we do not always get them. In the case of radio, if a Minister has declined to appear, as Deputies know, we regularly state the Minister concerned was not available for comment. With regard to Deputy Coveney's suggestion of an empty chair, I do not believe that would serve the overall purpose of public debate. It may be that on occasion some people are more knowledgeable and, therefore, serve a better public function in answering questions on certain programmes, but in the interests of fairness, we will accept the person that a particular party, including the Deputy's party, wants to put forward.

I was just asking the question.

Mr. Cathal Goan

With regard to "The Late Late Show", I state again, categorically, that the programme producers made a decision to have one person step down from it. They had had representation from--

The programme producers stated the decision had come from on high. Thus, they did not make the decision.

Let us wait and see what Mr. Goan has to say.

Mr. Cathal Goan

I am very conscious of being in front of an Oireachtas committee. A lot of rubbish was written about this issue and it was blown out of all proportion. First, there was an allegation that I had directly interfered with the programme because I had had a direct representation from the Minister for Health and Children. That was completely untrue and without foundation. On the afternoon of the day on which the programme was to be broadcast, the managing director of television raised queries about the make-up of the panel. His primary concern was that there were four people on the panel, three of whom broadly represented one point of view and one representing the other point of view. He asked that this be addressed and that is what happened. There was no question of John Crown's being censored. He was on the "Saturday View" programme with Rodney Rice the following day. This is, frankly, a concoction.

I did not say he was censored. It is important that I clarify my comments. I said he was no longer invited to appear. He was asked to appear on "The Late Late Show" and then told he could not.

Mr. Cathal Goan

Frequently, people have been asked to appear on "The Late Late Show" and then stood down. That happens quite a lot on programmes. Anyone who has been involved in the broadcasting business knows that panels change at different times. People are invited and then asked if they would mind stepping down because someone else is available or the circumstances have changed. That is routine. In this case, it is regrettable that what happened on that evening became a matter of public controversy, because there were no ulterior motives behind it and there was no political interference in the programme. As the Deputy and his colleagues know, people are invited to appear on programmes and occasionally asked to step down. There is nothing sinister about it. People can make more of it if they wish, but that is the case.

Mr. Ed Mulhall

Deputy Coveney linked the standing down of John Crown with the Minister's refusal to appear on the programme, but there was no such link.

I wish to refer to that case before I ask my questions. Obviously, nobody is querying what Mr. Goan is saying. He has made the statement and we have to accept it. However, it does not explain why a decision was made to drop the person who knew far more about the subject than anybody else. Mr. Crown could be described as the most senior oncologist in the country. He has made strong political statements, as we all recognise, but ones that need to be heard, yet he was dropped rather than somebody else on the panel. That is inexplicable. It is inexplicable why he was dropped over somebody else on the panel. Mr. Goan will come back to that when I ask my questions. Notwithstanding what Mr Goan has said, I still have questions about the decision.

Generally speaking, RTE has been very good regarding political balance. It has a pretty sophisticated approach. However, I recall watching the "Six One News" and seeing three Ministers making announcements, one after the other, without any representative from the Opposition. When it comes to news programmes, balance has been adhered to in the main.

However, a convention has built up. I cite "Morning Ireland", a popular and professional programme, on which it used to be the case that when a Minister was a guest, an Opposition spokesperson was also on and they slugged it out. From my perspective that made for better radio. RTE has now adopted a different convention which I would challenge. I presume it came about because Ministers will agree to go on the programme so long as they do not have to face an Opposition spokesperson. The current practice is that the Opposition spokesperson goes on air at 7.20 a.m., the Minister goes on later, at prime time, and the latter can simply pick off anything the Opposition spokesperson has said. The Minister is in a very privileged position.

According to the books, RTE has balance and takes both sides, but in terms of getting a message out the relationship is quite different. I do not recall an instance where a Minister was on air at 7.15 a.m. and the Opposition spokesperson got a prime time chance to reply.

It is too early.

Mr. Goan has got my point. The convention is there and I suspect it goes back to the notion that if RTE wants a Minister to take part in a programme it must agree to the Minister having right of reply with nobody getting at him or her.

RTE has a professional attitude in terms of news and public affairs programmes but I have concerns about what falls into the entertainment category, particularly "The Late Late Show". I have made my point about Dr. Crown and the treatment he received. A few days before the last election, "The Late Late Show" provided a platform, perhaps unwittingly, for the most powerful paean of praise for the leader of one party. I have concerns about that. I was outside the churches in my constituency on the following Sunday morning and it was quite clear that the programme had made an impact. Again, RTE can say it provided balance but in my view it was not a balanced programme. There are question marks about using what are essentially cultural entertainment programmes in a way that wields political influence so close to a general election. Perhaps Mr. Goan would comment on that.

Mr. Cathal Goan

I will ask Mr. Mulhall to answer the question concerning "Morning Ireland". I do not know what anybody in my position can say to the Deputy at this stage. I have already stated categorically what happened regarding Dr. Crown and "The Late Late Show". I agree with the Deputy that he is one of the country's foremost--

Why was he dropped in favour of the others?

Mr. Cathal Goan

I did not drop him.

I meant RTE collectively.

Mr. Cathal Goan

I am not going to second-guess the individual decision of the programme at the time. With the greatest respect to the Deputy and her colleagues, if we are going to carry out a forensic examination of every editorial decision made in RTE, we should be in permanent session.

Members are entitled to cite examples.

Mr. Cathal Goan

Members are indeed entitled to make a point. Unfortunately, in this case and I have to say, once again, the Deputy has implied that there was interference in which I was involved. I want to tell the Deputy again categorically that it did not happen.

I have never said that the director general was personally involved. I quoted somebody from "The Late Late Show" who said that a decision was made higher than our level.

Mr. Cathal Goan

"From on high" is what the Deputy said.

"From on high", that is it.

Mr. Cathal Goan

Every newspaper that wrote about the matter the following day implied that I was involved in a decision regarding the programme.

I am not implying that today and I have not done so in the past.

Mr. Cathal Goan

The programme team made the decision.

Then why is Mr. Goan saying that it was on high?

Mr. Goan has made it quite clear that he had no involvement and that it was the programme team's decision. We will move to the rest of Deputy McManus's questions.

Mr. Cathal Goan

The committee will appreciate that this is a subject that irritates me perhaps more than it should. I believe it is of absolute importance that people understand that the office I occupy, and the office my senior editorial colleagues occupy, is about independence from any political interference. It is a position that we guard very jealously. If I have overreacted here the committee can understand why.

Perhaps Deputy McManus will remind me of the other point she made about "Morning Ireland".

I was talking about "Morning Ireland" and the influence of "The Late Late Show".

Mr. Cathal Goan

"The Late Late Show" again. A formal complaint was made to the Broadcasting Complaints Commission about that issue. The commission is a statutory body outside RTE's control and its view on that issue was that the guidelines and obligations for balance were not broken. I am not doubting the power of the presentation made by Senator Eoghan Harris but that was the view of the BCC. It is important to say about "The Late Late Show"--

I am not asking about the BCC. I am asking the director general for his view on that kind of event being used again.

Mr. Cathal Goan

I am coming to that. "The Late Late Show" is a remarkable institution in Irish broadcasting. It has been with us for a long time and its success is partly due to its combining current affairs and the topical along with entertainment. I would be loth to say that the programme should not have debates about current issues. There have been memorable shows over the years where issues of real controversy have been explored and the programme has been to the fore in highlighting concerns in society. I do not think I or anybody like me should say that "The Late Late Show" should be restricted from exploring certain topics.

In retrospect, I am not comfortable with this case so close to an election. Inasmuch as people independent of me have adjudicated on the issue, I do not believe there was a lack of balance. I think RTE has fulfilled its statutory duty.

Would it not be fair to say that on that particular night, prior to the programme, nobody knew what Senator Harris was going to say?

Mr. Cathal Goan

I cannot say that. I have not gone into it in detail.

If the director general was from Lithuania he might not have known about it but the dogs on the street could have anticipated what the Senator was going to say.

I do not think so, not based on his past record.

Mr. Ed Mulhall

"The Late Late Show" is an interesting programme because it has become a programme of mythology as much as anything.

Is Mr. Mulhall referring to "Morning Ireland"?

Mr. Ed Mulhall

No, that particular edition of "The Late Late Show". I believe it was Winston Churchill who talked about people writing their own history. That is one of the elements by which that particular programme has gone into mythology. The myth-makers have also added to its myth.

Mr. Mulhall can take my word for it that when one is standing outside a church at 8 o'clock in the morning there is a pretty good feedback that is not mythical.

Mr. Ed Mulhall

I watched the programme that night and, as somebody who is in charge of news and current affairs, I was uncomfortable with it. I would prefer, particularly during a general election campaign, that the main fora for those sorts of debates were within the news and current affairs context. On that particular night, Eamon Dunphy, one of the people associated with the panel in the John Crown affair, seemed to have the audience behind him in terms of his comments against the Government. That was one of the factors involved in the view taken by the Broadcasting Complaints Commission. That is not the view when we look back on it. The Deputy in particular has been exposed to the rhetoric of Senator Harris over a number of years. He is a very flamboyant and dramatic speaker who is now using the forum of the Houses of the Oireachtas to give his views. We do not know what impact it had. I recommend that politicians look at general election campaigns in the round rather than focus on one broadcast as if it was the determining factor in winning or losing the election. On the "Morning Ireland" issue--

I did not say RTE did that, Mr. Mulhall should be careful what he presumes. I said there was a concern about "The Late Late Show", that is all.

Mr. Ed Mulhall

The issues raised about "The Late Late Show" are valid. There is an obligation on RTE when holding a discussion or a debate involving audience participation to deal with public issues as part of a wider debate. One has to look at how those programmes operate in the context of a general election campaign. I agree with the Deputy that those programmes are different.

The issue about "Morning Ireland" was also raised by Deputy Coveney. Our requirement is to be fair and impartial. Our main obligation is to the audience. We often struggle to get the attention of the audience, but our aim is to make good, accessible, understandable and hopefully informative programmes. We want to meet these aims in every broadcast. Part of that involves negotiation with the participants about their involvement. Sometimes it may involve compromise and negotiations to try and get the best participant. There may also be compromise in terms of the duration of particular item and where it will run in a programme. There are people from all sides who place conditions on their appearance. Sometimes they may be legitimate issues of availability or capacity to deal with a particular topic. The wish or otherwise to engage with others in a debate does not come only from one side.

When we put together a programme we would like to have all options open to us and not have any constraints. That is a roundabout way of answering the question. We would always like to be able to make the call about whether we want the programme format to be a debate or sequential or separate interviews, depending on how we are constructing a programme. That is not always possible because participants on all sides can place conditions on their appearance.

With all due respect, that is not the experience I have as an Opposition spokesperson. If I complain I do not get on the programme. If the Minister complains he or she is facilitated. If I was a Minister I would be facilitated. That is the reality. That is not a level playing pitch.

Mr. Ed Mulhall

I am not saying the playing pitch is level.

Mr. Mulhall is not.

Mr. Ed Mulhall

No, I am not saying that. If one is elected to be a member of Government one is not on the same plain, unfortunately, as a member of the Opposition by virtue of the fact that one is a Minister and has a Department. In terms of access to and ability to get on a programme, our choices and obligations are to have variety of voices, a significant part of which involves senior Opposition voices.

The obligation is to have balance not to have a variety of voices.

Mr. Ed Mulhall

No, my obligation is to be fair and impartial.

That means a political balance.

Mr. Ed Mulhall

Balance is one of the possible mechanisms whereby I can be fair and impartial. I am not required to be numerically balanced.

Mr. Mulhall is not doing himself or RTE any favours by mincing words. RTE is obliged to be balanced. There is an Opposition spokesperson on each side of me. Neither are satisfied that if Ministers criticises a programme they get what they want. My colleagues are saying if they criticise the programme they are cut from it.

Mr. Ed Mulhall

Well let us--

No, I just want to--

Mr. Ed Mulhall

Sorry, I did not mean to cut across the Deputy.

There is a perception that the balance is not as it should be. I do not want to labour the point but I point out to the director general that the perception is there. We spoke at a previous meeting of a person who made a poor decision about a crib. I made the point that it was not a bright decision. Equally what happened with "The Late Late Show" was not a bright decision, whoever put the programme together within a few days of hundreds of thousands of people going out to vote. It was not the reason the election was won or lost by any side but it becomes a contributing factor. I say that directly to RTE. Equally the decision in the matter of Professor John Crown was poor, whoever made that decision, and I say that in defence of Mr. Goan. The most experienced physician in the country dealing with that illness was dropped from a programme while other people were left on the programme. It was a poor decision.

It was stated that "Questions and Answers" does not have to be balanced within the Opposition, but there is always a Government spokesperson present. Therefore, the Government has 100% coverage but RTE is not getting the Opposition coverage right.

I welcome the guests and thank them for being so forthright. It is an education to learn how programmes are compiled. I thank Mr. Cathal Goan for his honest answers.

I do not wish to lecture Opposition members but it appears they are trying to replay the election which was over several months ago. This is going on on a weekly basis. They have no reason to complain. I watch these programmes too. I was outside many churches the morning after that show, and I did not even know that show was on. I was in rural Ireland but I do not think everybody was waiting to discuss the coverage of "The Late Late Show". I do not think everybody was listening to Senator Harris.

We speak about empty chairs. No matter what Government is in power "Questions and Answers" is a programme I do not like. I have attended several editions as a member of the audience, not as a member of the panel. I do not think it is a very good or balanced programme because the audience is normally hand picked. However, the Opposition is getting carried away by complaining that there is always a Government person present.

Can RTE deal with the comments and questions from Deputies Mattie McGrath and D'Arcy please?

Mr. Ed Mulhall

I was not trying to mince words when I was talking about balance.

Mr. Ed Mulhall

I was trying to be strictly accurate in terms of our legal obligations, namely, fairness and impartiality when dealing with current affairs. That is all.

That opens up a whole new interpretation of fairness and impartially.

Mr. Ed Mulhall

That is what we are required to do by the Broadcasting Act and that is what we operate to. Fine Gael's argument about proportionality between Opposition parties on "Questions and Answers" is that there are too many Labour Party and too few Fine Gael representatives.

In that particular---

Mr. Ed Mulhall

We have responded to the written complaint on this matter from Fine Gael. As Mr. Goan explained, "The Week in Politics" is concerned with the business of the Dáil and normally only politicians and political correspondents are represented on the programme. "Questions and Answers" has a much broader remit and a much wider panel. The panel is selected with an eye to the current political debate but also in the topics it expects to come up on a particular day. As we are also required to do by the Broadcasting Act, it provides a diversity of opinion on the programme. Sometimes we are correctly criticised for not having a wide enough diversity of opinion. Even if one looks at the "Questions and Answers" panel alongside the rules of the election campaign, where we strictly look at proportionality across programmes, because in the past we have been subject to not just criticism but also challenged on that issue, in terms of the yardstick of the electoral vote, the Fine Gael representation is pretty much on target.

I have two further speakers. I ask our questioners to be brief please, because we have three topics still to cover.

I join in the welcome to the gentlemen from RTE. I would be lacking in my duty as a public representative this morning and lacking in my duty to the personnel in my political party around the country, who raise these issues with me, if I did not say there is a perception among a large section of the body politic that RTE was less than fair in regard to that "Late Late Show", its timing and content. That there is a perception should disturb the delegation considerably and make RTE focus on it. Anybody would have had a reasonable expectation of the line that Senator Harris would take. As both representatives have said they were disturbed by it. It was disturbing. There is a real perception around the country that it was unfair and wrongly timed.

There is also a similar perception in regard to Mr. Crown. There is a perception also, perhaps slightly heightened in recent times, that the Bryan Dobson fireside chat interview with the Taoiseach on "Six One News"was less than investigative or balanced journalism. The perception exists among a large section of the electorate and among political activists that I come across at meetings night after night that there was unfairness.

I accept the bona fides of the delegation and that, individually, they will defend that situation but I wish to alert the delegation of a perception among active political people, sincere committed community activists who work in a political party right across the country, that they were badly done by. They feel they were cheated on the "Late Late Show". They feel similarly about Mr. Crown in light of the cancer debate and the same, in retrospect, about the Bryan Dobson interview.

I indicated I wish to speak just to bring some balance to this side of the table.

Deputy Mattie McGrath and I must be the only two people in Ireland who did not see this "Late Late Show" because we were not in before closing time. My general view, from what I have read about that "Late Late Show", is that it was unbalanced. That is one specific item and I think it would be unfair to deal with it. I strongly believe RTE makes a serious attempt to get balance into its programmes. I recognise that dealing with Government is always the same. Things were no different when other parties were in Government. That is a fact.

Barely within my lifetime.

When Mr. Bruton was Taoiseach I clearly recall him not being available to RTE and RTE being very irritated at the time that he did not make himself available for a programme. I wish to raise one passing question. What is needed are more Independent voices.

They are in Government.

Perhaps Deputy Coveney made this point before I got here and I apologies for my intermittent attendance at this meeting. What I find irritating is not the balance of people on programmes but when Ministers call the shots as to when and where they will intervene in a programme. That is not acceptable. My view is that a Minister may try to produce the programme and say he does not want to spar with Deputy Coveney but will speak for three minutes on his own uninterrupted. If that does not suit the programme the public would like to know. RTE can then say it offered a slot to the Minister but that because he could not engage with the Opposition panellist it dropped the Minister and selected somebody else. That irritates people when it happens.

This is common on "Morning Ireland" where the Minister is waiting in the wings or else goes on first or whatever. He or she listens to what the other person has to say and then has an uninterrupted flow and is not challenged. I have no doubt that people in RTE would share my view on that but it is time somebody stood up to them. This is a clear instance where this kind of format should not be allowed. Otherwise, I believe RTE makes a serious effort to maintain balance.

I would like to comment on the Bertie Ahern-Trapattoni interview if I may and whether he is being lined up as a potential soccer pundit if he decides to leave politics. Unlike some other speakers I believe the format of "Questions and Answers" is excellent for discussion. Our query was about the balance of speakers on the panel.

Before I call Mr. Goan perhaps I can make one small comment in case there is an imbalance here, in that most of the contributions have come from Fine Gael and Labour.

What about Fianna Fáil?

It would be my experience and that of Deputy McGrath - most Fianna Fáil members would say it to us - that Fianna Fáil members are not getting a fair deal on television. It is important to say that. Whatever one does, one cannot win.

Mr. Cathal Goan

I agree with the Chair. I accept that and it is part and parcel of what we do. It is a very privileged position to be in a position to offer a national forum for debate. We know that much of the time people have perceptions around how they are treated as opposed to how other people are treated. It is something we take with absolute seriousness and we exercise our jobs as conscientiously as possible. No more than the Deputies and the Senators, we occasionally make mistakes but most of our efforts achieve their purpose which is to arrive at fair and impartial coverage and, as the legislation requires, over time, not necessarily within time, the kind of balance which is required of us as the national broadcaster.

Mr. Ed Mulhall

I do not want to let lie the comment by Senator O'Reilly about the Bryan Dobson interview. It is, and probably will become, the most scrutinised interview that has been done in RTE in recent years. There are transcripts available if people want to go back over it, because it was read into the record at the tribunal only last week.

Given the circumstances in which the interview was done and that most of the information was being given for the first time, if people go back and read that interview they will see that most of the key questions were asked. How they were responded to is another matter but they were asked.

I wish to move on to the next topic, that of licence fee issues. This has been discussed extensively at this committee in the past. Perhaps we can get through it relatively quickly.

Moving on from the last issue which was a little more difficult, I wish to offer some views on the issue of the licence fee. I want to be as proactive as I can. With the advances in technology, the current system of collecting the licence fee is rapidly becoming redundant. RTE needs to examine and perhaps propose new ways to approach its collection that will guarantee it finance, in respect of the use of which it can make plans. However, such an approach must guarantee no political or ministerial interference that would essentially threaten RTE. I refer, for example, to the Government disallowing a licence fee increase in line with inflation and other costs, if it were unhappy with the service. I would like to hear Mr. Goan's view on the proposed role of the BAI, the new broadcasting authority, in making recommendations on licence fee increases. More fundamental than that, we should examine the putting in place of a new system to publicly fund the section of public service broadcasting through RTE that is currently funded. The licence fee is currently linked to a television set, but many people view television channels from a PDA or laptop. The Senator beside me might be watching a television channel as we speak.

I checked the RTE site a few minutes ago.

However, he has not and will not pay a licence for owning that computer. With the advancement of digital television and the next generation broadband access, is it not appropriate that we explore more imaginative and efficient ways of collecting €200 million? That is the amount we are talking about, which I consider is well spent by RTE. However, it currently costs between €8 million and €9 million to collect. Such expenditure is not as efficient a way as some other method of collecting licence fee revenue. Technology is forcing us to change our ways. The only way we watched television channels in the past is on a television set, but the way we will watch them in the future will be different. Therefore, we need to respond to such change in terms of fairness as to how we charge the public for the television broadcast service they watch.

I wish to add an addendum to Deputy Coveney's question. When the new digital boxes come into use, will the technology exist to prevent a such a box operating if a licence is not linked to it? Mr. Goan might answer that question when responding to Deputy Coveney's questions.

Mr. Cathal Goan

I will ask Mr. Conor Hayes, who is most directly involved in our relations with the Department on the licence fee issue, to respond to questions on that issue.

An Post has an obligation to collect the licence fee. RTE has made it known in the past that it would favour this business going through a public procurement process. That happened in the United Kingdom and arrangements were arrived at there which are different from those here. I am not saying that An Post would not necessarily be the winner of that process, but given that it has had this business for more than 40 years, a procurement process would be beneficial in the collection process being examined.

Of the entirety of the money collected, almost €10 million is involved in costs for An Post and 5% of it is given to the BCI for the sound and vision scheme, of which RTE has been a beneficiary as well as other broadcasters. In respect of the moneys we receive, I am grateful for the members' observations about the way it is spent and hope that continues to be the view of people about the amount of money we have. Mr. Conor Hayes might deal with the specific issues in this regard.

Mr. Conor Hayes

Collection costs account for broadly 6% of the money collected, and, as Mr. Cathal Goan said, 5% of it goes to the broadcasting fund. Therefore, we would expect to receive in a form of grant-in-aid approximately 89% of what is collected. Under the current system, nobody other than An Post is entitled to collect the licence fee, with the exception of the social welfare licences which are now paid - that arrangement having been changed in 2004. They are now paid directly between the Department of Social and Family Affairs and the Department of Communications, Energy and Natural Resources The balance of all licences are paid by An Post and nobody else is entitled to sell the licence here. We do not have any influence or responsibility in that regard. We work with An Post to encourage it as much as we can, but that is a volunteerist approach. An Post has specific statutory responsibility for selling licences and collecting the fee. We have been on record for at least five years in suggesting that this process should be ventilated by way of some form of public process. It is always good to review the arrangement, although we might end up with the same one, and we probably would, but that does not mean somebody would not put forward another approach. Therefore, it is good to examine it.

We have specific concerns regarding the increase in the number of licences in recent years. In the past five years, 219,000 new licences were purchased, but approximately 260,000 new houses were built. While many houses are empty, those figures suggest there has not been an improvement in the underlying level of evasion. Other factors come into the equation. We discussed this issue last year here when views were expressed as to whether a licence should be required for a holiday home and, currently, a licence is required for it. In fairness to An Post or to anybody else, they would face difficulties in the collection of the licence fee, which is why I presume Deputy Coveney asked if there is not another mechanism by which it could be collected.

The licence fee mechanism is used quite extensively in various European countries. We have discussed it internally and are not in favour of a direct grant-in-aid. It could lead to our having a State broadcaster rather than a public service broadcaster and the scope for political interference might well be increased if such a mechanism were used.

Another part of my job in RTE includes responsibility for many technology issues, an area in which I have a keen interest, and one which we discussed here previously. The most practical approach currently is to charge a licence per household. While some people would attempt to view these facilities over a PDA, they number a tiny minority. Even the most optimistic forecasts for broadband penetration over the next ten years do not suggest that we will be able to have IPTV at the level it might be available in certain other European countries because we do not have the underlying infrastructure in place. If broadband bandwidth is used in a particular way, it is questionable as to whether it should be used for television broadcasting and if that is the right kind of service that should be provided.

It is our view that DTT, if taken together with bandwidth, is a potent way of delivering the service. It could turn out to be a much more efficient delivery mechanism over the time horizon we are talking about. Ultimately, if we consider beyond that timeframe, we will be considering that mechanism. I have such a device. A trial is being run on DVD-H, a mobile hand-held device. Only about 500 people in the country would use such a devise. The cost of a device to roll out that technology would be quite expensive. From a practical perspective, I do not envisage there being any better mechanism than the current one in the next five years in terms of collection. There are more pressing issues than that one, on which we should be focused. They include an examination of some of the mechanics of licence collection within An Post.

What about the question I asked concerning a digital box?

Mr. Conor Hayes

Every time an extra functionality is put onto the set top box, it increases the cost of it. We have an obligation to provide a free-to-air service. What would happen in that regard, without being too technical, is that the box would suddenly provide a free-to-view service, therefore it would not comply in that respect. That would change the legislative position. One approach would be to take the view that if the service is free-to-view, if one does not pay a licence, one is not entitled to the service. That would impose a harsh regime and some people simply cannot afford these services. If such a prescriptive approach were taken, we would be here in a few years' time and members would be saying we should not be doing this. We are trying to balance practicality with obtaining the best possible penetration.

Does Mr. Hayes have any idea of the extent of evasion?

Mr. Conor Hayes

It depends on the estimate of the number of houses. We have the strongly held view that the level of evasion in this country is significantly higher than in Britain; we believe it is at least double. That is based on taking the number of houses according to the census, comparing 2002 with 2006, for example, and looking at the actual number of licences. This matter was examined by the auditor general but he arrived at a different conclusion from ours. We agree to differ on the methodology he used. I use the plain common-sense approach that there is a certain number of houses and a certain number of licences. Therefore, explain the difference.

What does Mr. Hayes believe the percentage is?

Mr. Conor Hayes

We think it is 14% or 15%. However, it is dependent on the estimate of the number of houses. There is widespread debate as to whether all of the empty houses are really empty. The actual number of other buildings also presents a difficulty. We have been looking at coverage, for example, and have had access to the number of electricity connections. Sometimes there is a doubling up of connections. There could be phase three or other connections into a premises. However, if one looks at the number of electricity connections and makes due allowance for dual connections, the number of houses, the turnover of houses and empty houses and then one looks at the number of licences, one must conclude there is a patch of evasion. We reckon it is 14% or 15%, approximately double the rate in Britain.

I share Deputy Coveney's view that there might be a more imaginative way of collecting the licence fee. An Post sells licences but who pays for the advertising? There is extensive advertising about evasion.

If Deputy Coveney's figure is correct that RTE is taking in €200 million a year - probably 1.5 million houses multiplied by €150 - it would mean it is losing approximately 10% to 14%, as Mr. Hayes said. The Minister is due to introduce a new postal code system, which is long overdue. That would make collection much easier. What is RTE's view on this? Under the French system, the fee is collected through a tax on houses, an audiovisual tax, which covers Deputy Coveney's point as to whether it is a screen. That might be an option. Is there a better system that could be based on new postal codes and the assumption that every house has a liability for an audiovisual tax? It would appear to be a simpler method. I agree with the point that it should not just be paid by the Government but should be something collectible, for which people see a value. I agree with Deputy Coveney that the money is well spent. I would defend this, whatever about other criticisms I might have.

At the last meeting we touched on how well the money was spent, particularly on the orchestra. However, there is also what I call the "Westlifeication" of media outlets, where average people doing a job well get coverage. It reached a crescendo with "The Late Late Show" special on Westlife. It is relevant in the week that Glen Hansard, 20 years after appearing in "The Commitments", wins an Oscar that there is a section of the music industry that RTE is not covering well. It could try to improve in that regard.

Mr. Cathal Goan

I congratulate Glen Hansard and I am happy to point out that RTE is a minor investor in films. Glen Hansard has often appeared on RTE and appeared with The Frames in a live broadcast from the Mansion House a couple of years ago. Next week he will be the subject of an "Other Voices" special which was recorded before there was any talk of an Oscar. While we are open to accusations of under-coverage and over-coverage, a disinterested examination of how we platform Irish music acts would have to disagree with the Deputy. It is right to celebrate, with most of the young people in the country, groups such as Westlife but we also give appropriate prominence to people like Glen Hansard.

When one compares the Westlife type of group with the Glen Hansard type of musician, I do not believe RTE has the balance of coverage right. That is just my opinion.

Mr. Cathal Goan

I accept that. It is about musical preference.

It is subjective.

Mr. Cathal Goan

I might share the Deputy's view in terms of musical preference but the fact remains that both of us are in the minority.

Mr. Conor Hayes

We were asked about co-operation with An Post whcih has spent a great deal of money over a ten year period on a system called GeoData, whereby it is trying to map every premises in the country with latitudinal and longitudinal co-ordinates. It has had many difficulties with it. It is using it to improve the quality of the television licence database, which is why I am somewhat optimistic that if the licence fee collection system was put out to tender again, one would expect it to be part of what An Post might put forward and it would be very attractive. Senator O'Toole also referred to the position in France and other countries. Our preference would be that there be a licence per household. We do not see any other practical way of doing it.

We will move on to the transfer of RTE Radio 1 MW to FM and LW52.

RTE will be aware that I have expressed concerns about this decision and the way it was made. I found out about it, as did others, as a result of a leak, which was probably not RTE's fault. My concern is that a decision to switch off the medium wave frequency has significant implications on a series of levels. Before that decision was made and certainly before it is implemented on 24 March we, as policy makers and public representatives, should have been consulted and told about it. There was an opportunity to do this before Christmas but it was not taken.

Consider how, for example, we continue to discuss the switchover from analogue television to digital television, of which RTE is taking the social consequences very seriously. We will continue to have an ongoing discussion as to how we can deal with that issue in terms of the State subsidy, potentially assisting people with the cost of buying new sets and ensuring nobody suffers a loss of television coverage in terms of losing the ability to tune into RTE channels. In the decision to shut down the medium wave service, however, RTE adopted an entirely different strategy. It is a fait accompli. We are told it is happening and that RTE will do what it can to try to ensure the consequences are minimised.

It is known that 10% of RTE listeners listen to radio on the medium wave frequency. We must ensure the people in question will continue to have a service. Most of them will be able to retune to FM or long wave frequencies but my main concern is for those who cannot receive the service on the FM frequency and who, perhaps, do not have a radio which can receive long wave signals. RTE currently splits coverage between medium wave and FM. On the weekends, for example, this happens with sports coverage and Sunday mass. If one cannot tune into both wavelengths, one will not continue to have that service. There is also an issue concerning Northern Ireland, which is why we have those public representatives here today. I thank them for their patience. They have been waiting for us to get to this issue. Some 75% of people in Northern Ireland can currently tune in to RTE Radio One via the FM frequency, but the other 25% presumably tune in through the medium wave frequency. How we are to deal with that? There may not be a legal obligation on RTE to provide a service to people in Northern Ireland in the same way it does in the Republic of Ireland, but there is an obligation. In a briefing from RTE we are being told that RTE will work on enhancing the FM signal in Northern Ireland to try to increase coverage there. RTE is doing a report on how that can be done and we will get the details of that before St. Patrick's Day. That is welcome but that report should have been done before the decision was taken to shut off medium wave, instead of making the decision first and then scrambling around to deal with the social consequences of it. That is my concern.

I understand this is a cost-saving exercise and that there is duplication here. If we have the ability to tune into Radio One both on long wave and FM, and that can deal with the coverage issue, does it make sense to spend another €2 million or whatever powering up a medium wave frequency? This is a cost-saving exercise for RTE but there are social consequences in rural areas where many isolated communities rely heavily on their radios for company. I am not saying that in a patronising way but it is a fact. Rural Deputies will understand that is the case. Every time one knocks on a door canvassing in parts of rural Ireland--

We are trying to keep to questions.

Yes, but this is an important issue.

I know it is an important issue but it is not a question.

We need to ensure that those people can continue to listen to RTE Radio One on medium wave, which is predominantly the station they listen to. They should be able to get mass on radio, as they have been doing for years, without a significant cost implication in terms of having to change radio sets. I would also like some detailed answers on the specific concerns about the Northern Ireland issues. If Mr. Goan would comment on the issues concerning people living in Britain that would be helpful.

Mr. Cathal Goan

I agree this is something that has social consequences that have been to the fore in the considerations and consultations with various groups before we made the announcement or, as the Deputy said, before it was leaked. It was intended that it would happen the following week. To be clear about this, RTE signalled its intention to close medium wave in the two successive considerations of its strategic plan, which are on our website and have been there since the beginning of 2006, and in the most recent consideration which I gave to the Deputy last November. I freely admit that, of the many initiatives RTE is taking at the moment to try to improve and rationalise our services, I did not specifically point to that initiative.

Let us look at where all RTE radio services are available. They are currently available on FM, satellite and cable across the island of Ireland. We have decided to shut off medium wave. As somebody with an accent by which it is not hard to calculate where I am from, I have an interest in making sure my relatives, as much as anyone else in the North of Ireland, will continue to receive RTE Radio One, and they will. The long wave is a better way of ensuring consistent coverage across the island of Ireland than medium wave is at the moment. Our medium wave transmitter was put off the air for five months in 2004 for critical maintenance and we had 30 queries from the public about it. The week before last, our medium wave transmitter had a failure and was off air for 16 hours, and we had one query about it. Our position is that this service is less and less utilised by the public. To make it absolutely clear how things work, however, we dealt in advance with a number of agencies, including the churches, to advise them that mass and services - which are also carried on medium wave - would be on long wave. In addition, there is the service on television, which is carried every Sunday, as well as the mass which is carried on Raidio na Gaeltachta every Sunday morning at 11 o'clock on FM across the entire country. We made it clear that the service would continue on long wave. Through agencies like that we arranged that there would be a voucher available for people to procure a long wave radio. My colleague Adrian Moynes has some other points he wants to make about this.

I regret the way this became public but we have drawn attention to the alternatives and to the fact that no one will be disenfranchised. Long wave is a superior way of getting what is on offer on medium wave at the moment. That will be the case from the fourth week in March when medium wave goes off air. We are looking at ways of improving the FM service in the North but, as I have already pointed out, there are internationally regulated frequencies and we are a party to international agreements on these matters. We cannot readily do things here which would cause interference with services that are located and licensed in Northern Ireland. All of that has been factored into what we will propose in the coming weeks. Does Adrian Moynes want to add to that?

Mr. Adrian Moynes

It is important to understand that this is not motivated by a cost-saving exercise. If that were the case, medium wave would have been closed at the beginning of this decade when RTE's financial circumstances were much less favourable than they are today. The reason it was not closed then, however, is that there were not adequate options for people. Today there are adequate options. Mr. Goan has mentioned the various means by which people can receive radio programmes. While I am not advertising, yesterday I went to Argos and bought this FM, medium wave and long wave radio set for €8. The batteries that power it cost almost as much as the radio, which is perfectly reliable and robust. It receives RTE Radio One on long wave, loud and clear, as it will do throughout the country. It will compete effectively with any other distribution system that has yet been invented. If we go into the technicalities of this, there will always be gaps in any distribution system, as Mick Kehoe will explain. It is beyond the power of mankind to come up with a distribution system that will provide universal coverage. This €8 radio set, however, will do the business for anybody who wants to hear mass on a Sunday morning or the liturgy of any of the other churches we broadcast, as well as anybody who wants to hear a football match on a split frequency. That is how we will do it.

Does it give proper balance?

Mr. Mick Kehoe

There is a little volume tuner that does the balance on it.

Mr. Adrian Moynes

It is possible for people to receive the service uninterruptedly. Like Cathal Goan, I come from Northern Ireland. I am well aware of the constituency there. We have written to SDLP Assembly Members, by whom the issue was first raised, to advise them about the work we are doing to improve the FM service in Northern Ireland. I repeat that the long wave service will be available at absolutely nugatory cost. The cost of getting equipped would be 1% of what people are prepared to pay per annum for Sky Television services. Frankly, the costs are silly.

It is also important to record that we have taken the initiative to explain this decision to those we anticipated would be most likely to be concerned about it. Based on our experience, the people most likely to be concerned about it are those working with the elderly and those who represent the churches and are concerned that liturgies would still be available. We have had no response, North or South, to the briefing to which Deputy Coveney referred, other than acknowledgement from two public representatives. No one has engaged on paper or raised an issue about the rationale we set out. Members of the public have not been contacting us about this. There has been coverage of the issue North of the Border in the Irish News and we have engaged with it. We provided a newspaper article and responded to the concerns expressed in the newspaper. The level of traffic about this is low. It may rise when the service is switched off, although it has been switched off in the past and there was not extensive representation about it from any quarter.

I thank Mr. Moynes. That sums it up very well.

I thank Mr. Moynes for his replies. Surely he would have to accept it is a completely different situation if somebody understands there is a breakdown or a temporary withdrawal of a service which will be restored. There is a certain level of trust in regard to RTE or the ESB in that if something breaks down, it will come back.

A decision was made which was sprung on us, because of a leak, and which will have an impact on people. There has not been proper preparation or proper guarantees for people. It may not be a huge population but significant groups of people will be affected. Now that this is out in the open, the service in Northern Ireland has been the subject of much debate and media coverage. There was no consultation with public representatives prior to this decision being made public. RTE has engaged in a type of rearguard action because people have complained. Perhaps it will explain how much consultation occurred in Northern Ireland. This appears to contravene the Good Friday Agreement in terms of cultural links. A link is being broken.

RTE said it is not a cost-cutting exercise but it has not explained what it is. At a time when the range of choice is getting wider, RTE is reducing choice in areas of Northern Ireland in which there is poor FM delivery.

Nobody mentioned the impact on listeners in Britain or in Europe where, I understand, there is a reliance on medium wave. At night-time, long wave suffers interference and medium wave is used to a greater extent. Interestingly, it was said that we cannot interfere with others but it appears an Algerian station can interfere with our long wave service. That is an issue for people in Britain and on mainland Europe. I do not know how big the impact will be on people at sea, namely, seafarers, but it has been raised with us.

No matter how often RTE says it is the intention to do something, there is an issue of trust. If RTE intends to do something, one presumes, because of its reputation and standing, that it will only make a change when it has provided the full service in order that people are not discommoded. As RTE said, there will be social consequences. Those social consequences will occur in Northern Ireland and especially in Britain in a way that is most undesirable.

Mr. Cathal Goan

To reiterate, long wave is a superior medium of transmission to medium wave. Long wave will be available all over Northern Ireland. There is no question of anyone in the North of Ireland being disenfranchised. I do not know how I can say that more clearly.

One cannot have the split at the weekends--

Mr. Cathal Goan

We can.

- -if one does not have FM as well. That is the point.

Mr. Cathal Goan

We cannot have it both ways. If FM and medium wave are the issue and people cannot get FM at present and must rely on medium wave, then nothing has changed in the new scenario. People will be able to continue to receive RTE on long wave in a better way than they do on medium wave.

However, they cannot get FM.

Mr. Cathal Goan

People in certain parts of Northern Ireland cannot get it anyway.

They can, however, get medium wave.

Mr. Cathal Goan

Yes, but the medium wave service which they get intermittently will be received in a much superior fashion on long wave.

Mr. Conor Hayes

Since 2004, RTE has full national coverage on long wave. Medium wave does not access all parts of Northern Ireland.

Mr. Conor Hayes

The point is that long wave has a much greater reach in Northern Ireland and in the UK.

Mr. Cathal Goan

There are issues in certain parts of the United Kingdom. I repeat that RTE radio is available on-line 24 hours per day all over the world. All four services--

That is not the answer.

Mr. Cathal Goan

It is. Our services are available on satellite, on cable and on-line for those who choose to access them. There is a problem at night in south-east England. I suggest people can find other ways to receive our service. The long wave in other parts of the United Kingdom is a much improved service than medium wave.

Advising people, particularly Irish people who live in south-east England, an area that has been populated by Irish people over decades and, indeed, centuries, to use the Internet or whatever is not an answer.

Mr. Mick Kehoe

I wish to clarify that from a technical perspective. There has been much anecdotal evidence from very interested people on coverage of medium wave and long wave into the UK, Northern Ireland and around Ireland, especially in regard to interference. There are sky waves and ground waves and all kinds of frequency planning issues which make long wave and medium wave much more susceptible to interference, and Tipaza knocks out long wave, but there are also other channels which knock out medium wave.

To allay people's concerns, two years ago we decided to go to four different locations: Derrybeg in northern Donegal; Ballydavid in south Tipperary; Evesham in the UK; and Crawley in south London. We set up recording with more or less standard radios and aerials to find out what people could hear. We recorded over 24-hour periods because I had no particular interest in people who run a 200 m cable up the side of a building or who do something specialist. We wanted to find out what the average person could hear with a more or less average radio. Medium wave, bar perhaps two or three hours, does not exist in London. Long wave lasts for most of the day in London. It dies out in the evening but comes back at about midnight.

The coverage of medium wave is fairly okay as far as Evesham but south of it, it is only available for a couple of hours a day while long wave is available for most of the day. That was what we found from recording what was delivered rather than what those with specialist equipment hear. We got a very good measure of what was happening.

Long wave coverage to the UK is far superior to medium wave. It is well above Tipaza and sky wave interference. It is just a recorded, on-the-ground effect.

I have listened to the debate with interest and learned a great deal. However, there are several rural communities about which I am concerned. One of these is that relating to my parish, which is located in the Chairman's constituency, where it is not possible to receive long wave transmissions. It is important that we cater for the 10% of people who cannot receive such transmissions. RTE is doing a good job but this was announced as a fait accompli. I accept that the latter is not the fault of our guests. The people in the area to which I refer pay their licence fees and are entitled to receive long wave transmissions. Perhaps the station could supply them with radio sets which would allow them to do so. In addition, people in the area are also unable to receive RTE 1 and Network 2 television signals. This fact has been ignored for several years.

Mr. Cathal Goan

Rather than getting into specifics, if the Deputy wishes to contact us about the area in question we can discuss the position.

There are similar pockets throughout the country.

Mr. Mick Kehoe

Radio waves are naturally produced by the Earth. We, therefore, tag radio and television signals on to what is a natural resource of the Earth. Unfortunately, radio waves do not go around bends that well and do not dip down into valleys. The typography of the land makes it impossible to reach every house. However, we make concerted efforts to reach as many homes as possible.

Rather than referring to specific areas, perhaps Deputy Mattie McGrath might contact Mr. Kehoe after the meeting to discuss the issue in greater detail.

As Deputy McManus stated, it would obviously have been preferable if the difficulties had been rectified in advance of the change. However, we must deal with the situation as it now stands.

I am concerned about Irish emigrant communities. I accept the point in respect of broadband, new technologies and so on. However, I am particularly concerned about those who emigrated in the 1950s to places such as the Kilburn High Road and who may be living in bedsits. These people may have old radio sets and they love RTE's broadcasts.

Full coverage in respect of Northern Ireland is a major issue. Will our guests indicate when they anticipate rectifying the difficulties in this regard? How long will it take to do so?

It was stated that vouchers could be made available to help people overcome the difficulties. That would be admirable. How would such a voucher system operate? Are there any tentative plans in place? If people receive vouchers, that will be one problem solved. The only issues that will remain outstanding will be those relating to Northern Ireland and England. Many of us have lived among or visited the emigrant communities in London. Access to home means a great deal to people living in bedsits in the Kilburn High Road who only have access to old-style radio sets.

I completely agree with the concept of moving to long wave because the reception is far better. I can receive RTE's long wave signal on my car radio from Edinburgh to Dover and also in areas of northern France. People on the Kilburn High Road will certainly receive--

Yes, I was just about to comment on that.

As I stated at another forum, attempts need to be made to educate members of the emigrant community and to make available to them long wave radios. When people see AM-FM radios, they presume that such sets cannot receive long wave transmissions. I was in someone's car last week and the driver informed me that his radio has only two bands. I pointed out that, in fact, it has three, one of which is long wave. He did not realise that the AM band covers both medium and long wave. We must engage in a process of educating people.

I do not want to repeat what was said previously regarding interference involving Radio Algeria. Is it not the case that there is a vacant slot adjacent to 252 kHz, which is not being used and in respect of which there is not an overlap? The difficulty at night is that Radio Algeria interferes with the long wave signal and transmissions from this station drift right the way up to northern Europe. However, on the last occasion I checked, there was a vacant slot on the long wave band at approximately 269 kHz. If either RTE or Radio Algeria moved to that frequency, the problem would be solved. This would be a good time to move and it would not cause much difficulty to transfer transmission from 252 kHz to 269 kHz or whatever. We should investigate the possibility of doing so.

At the same time, perhaps our guests might introduce emigrants to the concept of using broadband radio, which is easier to use than either of the other to options. One need only press a button and one can listen to either Radio Kerry or RTE.

Mr. Cathal Goan

I thank the Senator for his observations regarding long wave. I do not know what is the position regarding the additional frequency.

Mr. Mick Kehoe

There are a couple of long wave frequencies available. As already stated, however, radio waves are a natural resource of each country. They were allocated in 1961. If someone approached ComReg in respect of a frequency not currently being used, they would face a battle to establish whether that frequency was actually ours.

They could do a straight swap.

Mr. Mick Kehoe

Unfortunately, it does not work like that. We have inquired about two or three different frequencies and engaged in discussions with various broadcasters. We will be obliged to commence the process of undergoing international co-ordination. It could take five or six years for that process to be completed.

Do we still own our short wave band?

Mr. Mick Kehoe


We did have such a band.

Mr. Cathal Goan

I am not aware of such a band. I know there were plans to establish a short wave radio band in the 1940s. However, these were shelved following the election of the first inter-party Government.

Are our guests stating that once access to medium wave is cut off, people on the Falls Road or living in the glens of Antrim will still be able to receive the split wave service to which they have access at present?

Mr. Cathal Goan

The split wavelength service is based on the ability to receive FM and medium wave.

Mr. Cathal Goan

If one only has access to medium wave at present, when one switches to long wave one will receive the equivalent service but with better reception.

Yes, but RTE is planning to improve the FM service in the North and, in particular, to target the Belfast metropolitan area, which has a population of approximately 600,000.

What is the timeframe in this regard?

Mr. Cathal Goan

We hope to be in a position to announce that before the end of March.

What is the position with regard to vouchers?

Mr. Adrian Moynes

There is a voucher scheme available which will allow people who cannot afford to purchase new radios - even though they are very cheap - to do so. We have already discussed this matter with Age Action Ireland and we will discuss it with the Society of St. Vincent de Paul on Friday next. People such as district health nurses, who are in contact with the elderly, and members of the Society of St. Vincent de Paul, who visit people in the community, will be aware of this matter. We have also provided information in respect of retuning to 3,500 parishes and religious communities throughout the country. Extensive information is available. If people contact us directly, we will provide vouchers.

That is a positive development.

The final matter with which we are dealing, and which was raised by Deputy McManus, is the RTE superannuation scheme.

I have three questions. It was explained at our previous meeting that the defined benefits scheme was never closed. When was the scheme opened? I understand that there is a statutory requirement to lay the scheme before the Houses of the Oireachtas and that the Minister must sign it. When was this done? I also understand that there is some sort of proposal relating to a hybrid scheme. What position is the management at RTE taking in the context of providing incentives for people to transfer to this scheme? How much money was saved following the closure of membership of the defined benefits scheme in the late 1980s?

Mr. Cathal Goan

As I indicated at the previous meeting, Mr. Conor Hayes, as well as being CFO, is chairman of the trustees of the superannuation scheme and he will deal with the specifics raised by Deputy McManus.

Mr. Conor Hayes

The defined benefits scheme is called the RTE superannuation scheme and it is enshrined in legislation. There is a trustee but its rules are set out by statutory instrument and each rule is agreed and published by the Minister. I only joined RTE in 2001 and none of us was involved in our current roles at the time. However, circa April 1989, following several years of debate, a conclusion was arrived at that the authority would cease to offer the forms of contract of employment that would entitle people to become members of the RTE superannuation scheme. With effect from approximately 2 July 1989, an employee joining RTE for the first time was offered pension entitlements through defined contributions rather than defined benefits. That was rare at the time.

Many defined benefit schemes have been closed in private sector companies, particularly over the past five or six years, and very few, if any, defined benefit schemes have been set up in Ireland over the past ten or 15 years. It is a rarity other than in organisations such as the Railway Procurement Agency. None has been set up in the private sector. All the major multinationals have chosen to provide pension benefits through a defined contribution mechanism. While it could be said RTE was very much ahead of its time, I am not sure that was planned.

Towards the end of 1989 a deed was drafted and a scheme was opened entitled the RTE defined contribution scheme. It is the principal pension scheme for RTE employees. It has approximately 1,200 members while the defined benefit scheme had approximately 585 active employees at the end of December 2007. The numbers have, therefore, shifted completely.

Mr. Hayes has not answered my question. When was the defined contribution scheme laid before the Oireachtas?

Mr. Conor Hayes

I am not aware of it being laid before the Houses of the Oireachtas. The Broadcasting Act 1960 requires that pension benefits and pension schemes that convey defined benefits be approved by both Ministers. A defined contribution scheme is a different vehicle. Under a defined pension scheme, people remain members until they die because the trust provides the pension to them. Under a defined contribution scheme, a different mechanism is used, which is deeply unfair but which could easily be solved, and we have made representations to the Departments of Social and Family Affairs and Finance in this regard. People who retire from such a scheme have no other possibility other than the trustees take their money, go to an insurance company and purchase an annuity. Very restrictive conditions apply to the purchase of annuities. However, that terminates their relationship with the trust.

I do not mean to be technical but under the legislation it is not at all clear that is what was envisaged or contemplated in 1960, bearing in mind the legislation was considered in the 1950s when defined contribution schemes were not even a sparkle in anybody's eye. The way the legislation was crafted did not contemplate such circumstances. It is not clear there would have been a requirement to lay the deeds before the Houses of the Oireachtas. However, the deeds have been submitted to both Ministers. To avoid doubt, it would be much better if they were approved. We are not in a position to determine whether they are legal but we would much prefer if they went through the appropriate process.

In 2002, as part of the restructuring of RTE, we lifted every stone to establish what needed to be renewed and tightened up and what we needed to get ourselves organised about. For example, as part of the strategy, we considered closing medium wave because we did have an alternative, that is, long wave, which was only launched in 2004. We put it to the side even though it would have saved us approximately €1.5 million a year at the time.

Similarly with this issue, we examined the way pension benefits were provided. We had many issues relating to employment contracts and so on while, at the same time, there was a pressing need to reduce the number employed or change the nature of what they were engaged in, by agreement. Together with the trade unions and the managers' association, we commissioned a firm of actuaries to examine the defined contribution scheme because it was becoming the major scheme. Coyle Hamilton Willis produced a report in October 2003 and RTE accepted the recommendations, which involved significant additional costs and many changes to, and a restructuring of, the scheme.

The unions came back in the middle of 2004. They had varying positions and needed to time to consider the report. They were unhappy with some parts of it and happy with others. The managers' association did not come back at that stage.

In 2005 , the unions, having considered the entire issue, lodged a claim with RTE saying they wanted us to get rid of the defined contribution scheme and confer defined pension benefits on everybody. We went through our normal industrial relations process. Ultimately, that was referred to an internal industrial relations tribunal, which ruled on 31 May 2006 that the union claim did not have merit, and it recommended that the unions should work together to improve the defined contribution scheme. The tribunal made significant recommendations in this regard, which were accepted immediately by the company. Four months later the unions held a ballot and rejected them.

We then went to another stage where we tried to bring in a facilitator between the various sides. In June 2007, the unions decided to abandon the facilitation process and we then sought other means to do it. They then requested that we would go back to the industrial relations tribunal, which we have done, and that is where the matter lies.

As part of the original facilitation, the facilitator came to the company and said our position was that we had a defined contribution scheme, which we were trying to enhance and the original IRT ruling recommended that was the right thing to do. The unions said they wanted everybody in a defined benefits scheme but their concern was that people were worried about the risk.

If one is in a defined contribution scheme, the markets go up and down and the issue of annuities causes huge difficulty, which could be addressed readily by legislation. It is unusual because this is not how it is done in Britain or elsewhere. People are very vulnerable at retirement. RTE has a big problem in regard to defined benefit liabilities. The organisation has approximately €100 million in net assets and it has approximately €1 billion in liabilities in the defined benefits scheme. With the more modern way of accounting for defined benefit schemes, they are considered in the accounting profession to be the equivalent of loans. A company, therefore, must bring it on to its balance sheet and revalue it by reference to the bond markets. Bond market rates change every day and, therefore, there is a big shift. In our case, because the liabilities are ten times greater than the assets, we get a peculiar situation. British Airways probably has a similar scenario, but there is no other company that we know of in the Republic of Ireland that has an exposure of this sort.

The British legislation is different now. It is rebalanced on an annual basis, while the legislation here covers every four years.

Mr. Conor Hayes

It is, but that is not really the issue. The accounting standards that apply are identical. The defined benefit issues, in terms of how pension funds are valued, are different, but that is not what is causing the problem for us. When we try to bring the variable funds into our balance sheet we have the problem that they move up and down. We also have an issue where we as a company have been offering pension benefits in a particular way for 20 years.

The facilitator asked us to find some kind of half-way solution or some way to accommodate people's issues and we came up with a hybrid scheme. The average salary of the members of the scheme is €54,000 per annum and we rounded that up to €60,000 to allow time for negotiation. We suggested the first 50% of salary would go into a defined benefit mechanism and the rest would go into a defined contribution mechanism. Ultimately, that was rejected and we moved back to the industrial relations tribunal. This has carried on.

What would be the outcome of the 50:50 proposal be? What does it mean in terms of pension?

Mr. Conor Hayes

I am trying to provide the details without making a judgment because we are still in the process. All sides are still in negotiations with our industrial relations tribunal. I am trying to provide the information, but we do not want to prejudge how it might turn out.

We would like to understand what is involved. If it is a 50:50 division, half of a salary of €54,000 is €27,000. Therefore, the outcome after 40 years service would be half of €27,000. Is that correct?

Mr. Conor Hayes

The intention was that half of a person's salary would accrue defined benefit pension benefits--

That is 50% of final salary.

Mr. Conor Hayes

Yes, depending on length of service and subject to integration. The second part would give pension benefits through defined contributions. That was the proposed mechanism. We are concerned because some of the hybrid schemes so far suggested, particularly in the banks, are unbelievably complicated. The banks are much wealthier organisations. Also, banks have a different population in terms of the type of people who are scheme members. The pension issue is a more immediate one for us because we have many employees who have already been members of a defined contribution scheme. The banks are talking about people going into a particular type of scheme at some point, but we have had 20 years with people in a defined contribution scheme. Our position is somewhat different to the normal trend.

I was asked how much money we save by moving to defined contributions. It is not a question of money. From 2002 onwards, we have proposed and been prepared to put more money into pension benefits, because they are part of people's remuneration. The issue for us is that if we use a defined benefit mechanism as opposed to a defined contribution mechanism, the volatility to which we as a company are subject, because of the way things are now measured, is extreme and causes us a serious problem. It is not a cost saving we are trying to get. We are prepared to put a significant amount into pensions.

I understand that, but was an estimate made of what would be saved?

Mr. Conor Hayes

I do not think the Deputy heard what I said. We did not save money. It is not a cost-saving device. There is no difference in cost between defined contributions and defined benefit. Just think about it. The investments are made in the same markets over the same length of time. In theory, there should be no difference in the cost, because the investments are being made in exactly the same way. The question is who carries the risk at a certain point, and, from the company's perspective, how does one measure those liabilities.

What Mr. Hayes is saying is that the defined contribution scheme gives the same as a defined benefit scheme in terms of outcome.

Mr. Conor Hayes

No, I did not say that. I am talking about where we use the same assumptions. For example, I have the chairman of the trustees in the defined benefit scheme, so I sit down every month and we look at the asset allocation and what was invested and so on. In theory, over a 40-year period we invest in the same things as the defined contribution scheme. Therefore, there should not be any difference in outcome between a defined contribution and a defined benefit mechanism. The actuality can be different, but in terms of the approach to the investment decision, it is the same. Both contributions are being invested in the same area.

The question may need to be put a different way. If RTE were to offer and pay pensions at the rate of the defined benefit rate as opposed to what it is doing, how much more would it cost?

Mr. Conor Hayes

We make the same contributions. We have been prepared to--

Mr. Cathal Goan

RTE makes the same investment.

Mr. Conor Hayes

What we have been trying to do is encourage people to go along with this. This is not and has never been a cost-saving issue. We are trying to ensure that people have a proper pension and we have encouraged people to make appropriate contributions. We ourselves will also make them. There is not a difference in the contribution currently in the--

What is the difference? Are people getting the same level of pension as they were before this was introduced? My understanding--

Mr. Conor Hayes

The Senator is confusing two things. He is confusing contribution rate and the pension--

I am not confusing them. I am linking them. I am not confused at all. We will get to the bottom of this issue eventually. Up to a certain point, people paid their pension at a certain level and got a defined benefit, namely, after a 40-year accrual period they got 50% of final salary, indexed. That was the situation. If that was the position today, people would receive a certain element of pension. However, some people came and went in the past 20 years. Let us project forward 20 years and assume some of them could have 40 years accrued. Mr. Hayes seems to be saying that the people who left would receive the same level of pension, the cost would be the same to RTE and that there is no imbalance in that. My understanding from the way the market is at the moment, is that the defined contribution will not achieve a 50% pension for somebody with a 40 years accrual period.

Mr. Conor Hayes

I understand what the Senator is saying, but I do not agree. If, for example, one starts now and pays contributions for the next 40 years, we can make some projections. Depending on how the money is invested, one can expect that over time the scheme will deliver the same benefits, subject to the final mechanism. It is really the mechanism that is causing the problem with regard to defined contribution schemes. The annuity mechanism is much of the reason people's pensions are depressed under defined contribution, but there is not enough experience in Ireland currently--

I have discussed this issue with pensions experts in the UK, Ireland and in Europe, but until today I never met anybody who said they would expect to get the same level of payout from a defined contribution as people previously received--

Mr. Conor Hayes

Where does the Senator think the money is going?

To add to that, we can go back over the speeches of Tony Blair and look at the debate that took place in the public service in the UK over the period of discussion. We know about the row that British Airways started when Mr. Willie Walsh went over there last year with regard to the legislation there which required him to balance the pension books on an annual basis. That is a bit of daft legislation which does not exist here. Nobody has ever before indicated to me that the defined contribution will be as beneficial to the person retiring as the defined benefit contribution. Mr. Hayes is going on the record as saying that it is.

Mr. Conor Hayes

May I clarify the issue because the Senator is trying to put words in my mouth? I have a level of financial expertise and will not defer to the Senator on this. I am comfortable with my level of expertise. The Senator is confusing a number of issues. Tony Blair is not a pensions expert.

He has some advisers behind him.

Mr. Conor Hayes

He may well have advisers and may or may not know a lot about pensions. There is no reason that if money is invested in one vehicle, as opposed to another, it will of itself, because of the vehicle, generate a different return. That is not logical. What happens, as I understand it, between defined benefit and defined contribution is related to who carries the risk. There is a presumption among people that if they are a member of a defined benefit scheme - I can name a number of well known companies here where this is not the case - that the company carries all the risk and everything will be hunky dory. I am a member of a defined contribution scheme. When I look at it I see it is down and if I were going to retire tomorrow that would be a problem but over time, there should not be any particular difference from an investment return.

I draw Mr. Hayes's attention to the report of the Public Service Pensions Commission which was published in 2004 or 2005. The commission had access to every pension expert in the country. It examined the cost of a defined benefit pension and stated it was more than 20% and nowadays it would be at 28%. I do not believe that currently in RTE the employees' and the employers' total contribution is much more than half of that. Mr. Hayes is saying that this contribution and the system now in place in RTE does not disadvantage the employees in any way. I cannot accept that assertion.

Mr. Conor Hayes

That is not what we are saying. The Senator is using statistics in a very selective way.

One moment please, we are talking at cross purposes. Senator O'Toole is talking about something completely different from what Mr. Hayes is talking about. He is talking about the start of the scale and the Senator is talking about what is happening at the end of the scale. These are two totally different things. We can go over and back on this issue. As I understand it, people previously in RTE had an expectation they would get a pension of 50% of final salary and the company would have to carry the can for that. One will not achieve 50% in the markets.

One may do but it is highly unlikely.

Mr. Conor Hayes

There are different ways of approaching this. There is no investment reason they should be necessarily different. The problem is to do with who is carrying the risk which is why the issue about hybrids arose.

To deal with the other point, the current rates in a defined benefit scheme being paid in between the company and the member are of the order of 13%. The benefit, if measured today, and bearing in mind that the defined benefit scheme is trying to estimate something over 60 years, would probably be of the order of 25% or 26% because the nature of defined benefit schemes is that they are aggregations. People die and the pot of money that was there for them is kept and is applied to other people.

In defined contribution schemes, that does not work. Frankly, from day one, if one joined the defined contribution scheme and worked for 40 years, there is no logical reason that should cost more or less to generate a particular amount of pension. The question is if one leaves at a particular point or one joins at a particular point or one does not have full service, the differences between the two schemes then become very significant and the risk factors become significant. It is also a fact that if one, for example, joins a defined benefit scheme later in life, one will be significantly disadvantaged or if one is a member of a defined benefit scheme and one transfers, one will be significantly disadvantaged. It is not clear that one mechanism is of itself necessarily better than the other; there are features that have to be assessed.

I do not believe that a level of contribution totalling 13% or 14% will ever deliver at 50% of final salary.

Mr. Conor Hayes

We do not disagree with the Senator. What we have proposed is a situation where the average contribution over a 28 year period for members of the defined contribution scheme between the members and the company, will be of the order of 20%. We believe that will give people a very adequate level of pension. There is one final area which is an issue.

I wish to declare a slim interest in this matter as I have a family member who is employed by RTE. I think it important to make that declaration even though I have not discussed this issue with him.

I agree with Mr. Hayes on one point. This is about who carries the risk rather than about the return at the end of the day. My understanding is that whether it is a defined contribution or a defined benefit, the money invested for a pension return may vary depending on the scheme. It is certainly possible for a defined contribution to produce a higher return than a defined benefit. The problem is certainty for employees. Anyone unlucky enough to be retiring at the moment or at any stage in the past six months, is in real difficulty in terms of their pension whereas somebody retiring 18 months ago would probably have been in a pretty good position. The concern among employees who have entered RTE since 1989 is that they have seen a shift in the risk and they wonder whether it is they or the company are carrying the risk. RTE has decided to shift that risk from the company or the corporation onto the employees. This is where the concern and fear is. People who are retiring at some stage in the future have no idea as to the state of play within the markets at that time. This is the reason the hybrid scheme which is to be proposed and considered, needs to offer some form of risk sharing and I think this would be acceptable to people. I do not think anyone is saying we should reverse the decision from 1989 in its entirety but what employees on the defined contribution pension scheme would like to see is a sharing of the risk burden between themselves and RTE so that regardless of the markets they would have some level of guaranteed income when they leave. I do not think that is an unreasonable request.

Just to save time in replying, Mr. Hayes was about to say there was another factor.

Mr. Conor Hayes

The committee has me under pressure so I cannot remember. The point is this is not my normal format.

I am not trying to be clever when I say that with regard to the vulnerability to the markets, the key issue is the issue about annuities and this is very much within the remit of the committee.

It is an issue to do with legislation.

Mr. Conor Hayes

Yes, I accept that and it is an issue that is well overdue for addressing. There is a tremendous responsibility on trustees for the running of defined contribution schemes. They must try to ensure that people have an awareness and this is one of the big difficulties. There are means by which the risk can be reduced. It is recommended that people change their portfolios. For example, one should never be in a position on the day of retirement where all one's money is in equities. It is recommended that people progressively move funds into bonds. We have had a separate discussion with one of the major providers. It has never yet been done in this country but we have asked them to put together a specific inflation-linked bond for people so that period into retirement would be softened.

Pension-linked bonds are not allowed in this country.

Mr. Conor Hayes

There are ways. One can put strips on it and address it that way. This would soften it out particularly. In any event, even if one did not do a straightforward inflation-linked bond but rather did bonds, the annuity pricing is based on bonds so therefore one would not be subject to market vulnerability on the date of retirement.

The second issue is when we were trying to design the defined contribution scheme we were very conscious of all those issues. We were also trying to take account of the fact that all these people are eligible. Unlike the members of the defined benefit scheme, all our people in the defined contribution scheme are eligible for a State retirement pension so we were trying to construct a means of giving them the best possible mix of pension, given the circumstances they came from. We have offered a hybrid-type scheme which I described earlier and which gives people a choice. One can either stay with the defined contribution scheme which for many people would be by far the smarter thing to do, or else, if one has this particular concern, here is a hybrid scheme that shares the risk on the other side. This is the approach we are trying to adopt.

What is the balance on the hybrid scheme between the defined benefit and defined contribution?

Mr. Conor Hayes

Bearing in mind that the average salary for members of the team is €54,000, we said the first €30,000 would be subject to DB; in which case the other €24,000 would be subject to DC. There have been various levels up and down where we have offered 50% of €70,000, which would make it €35,000. The unions have come back looking for something much more than this, which would have the impact of conveying a defined benefit to such a large number that it would no longer be a hybrid.

Under the rules of its trusteeship, is RTE allowed to hold index-linked bonds by proxy, for example, European indexed bonds?

Mr. Conor Hayes

Yes. That is covered within the defined benefit scheme.

I thank Mr. Goan and his colleagues for attending and replying to the many questions asked by members.

Mr. Cathal Goan

I reiterate the invitation. We expect to welcome members of the committee to RTE next week to see the place and answer any more questions or generally have a discussion on any matters of current interest, including whatever happens on the "Late Late Show" on Friday.

I remind members that the visit to RTE will take place next Tuesday at 1 p.m.

The joint committee adjourned at 12.50 p.m. until 9.30 a.m. on Wednesday, 5 March 2008.