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Dáil Éireann díospóireacht -
Thursday, 2 Nov 1978

Vol. 309 No. 1

Ceisteanna—Questions. Oral Answers. - Television Licence Fees.

10.

asked the Minister for Posts and Telegraphs whether the increases sought in television licences were considered by the National Prices Commission; and whether he will arrange that future applications for licence increases will be examined by the National Prices Commission.

11.

asked the Minister for Posts and Telegraphs the reason why the Government sanctioned the recently announced major increases in television licence fees, in view of the already high level of such fees.

With the permission of the Ceann Comhairle, I propose to answer Questions Nos. 10 and 11 together.

The increases were not considered by the National Prices Commission because they relate to charges for a new service namely RTE 2 whereas the National Prices Commission deal with increases in charges for existing services. It would be a matter for the Government to decide on each future occasion whether proposals for increases in licence fees should be referred to that body for their observations.

Surely the Minister does not seriously expect the House to accept the excuse he has given for not submitting this issue to the National Prices Commission, namely, that this is a new service? In relation to an application of this kind which demanded an exorbitant increase of 25 per cent in licence fees, was it not an obvious and appropriate measure to submit it to the National Prices Commission?

Let me assure the Deputy that I was absolutely serious. There is no precedent for the National Prices Commission being asked to recommend a price for the introduction of a new product or service. Since RTE 2 is a new service it is quite appropriate that a charge should be made for its provision and it is not appropriate for the National Prices Commission to recommend any such charge. I am surprised at the Deputy's concern about the levying of exorbitant increases for existing services because in this regard, looking back on the record, the only case I could find occurred in 1974 when an increase of 33? per cent was imposed without any reference to the NPC and without there being provided any change in the service. Therefore, I suggest that if there is any fault in this area, it rests with the last administration of which the Deputy was a member.

Can the Minister say what examination, if any, was conducted by the Government or by the Department of Posts and Telegraphs into the reasons for the high level of the increases? Did the Government merely rubber stamp the application?

I assure the Deputy that that was not the case. Information was requested as to the estimated running cost of the new service and the revenue that would be likely to accrue from such sources and additional advertising. Estimates were prepared of the likely budget situation that RTE will face during 1979 and it was on the basis of that information that the figure was agreed.

The Minister has said that the increases are to pay for the running of RTE 2 but is there any increase in advertising fees?

I do not have before me details of advertising charges but I am aware that there have been increases in charges for advertising in recent times.

The Minister is being precise about the increases in the licence fees but surely he has figures also in respect of advertising. Would he not agree that the people who advertise can better afford increased charges than can poor people who must pay the licence fees?

I am not clear as to what is the point of the Deputy's remarks. Advertising charges are fixed in relation to cost and so on. In that area any increase in advertising charges would be a matter to come within the purview of the NPC who examine charges for advertising services generally, not only in respect of television but of the other media too. Therefore, the level of advertising charges is a matter which falls within the operation of the normal price control activities and there cannot by any question of RTE being lax in that area. Consequently, if there remains a charge to be made, it is appropriate that it should be met by the other main source of revenue, namely, the licence fees paid by the viewers.

Has there been any application by the Minister to the NPC for an increase in advertising fees?

I have dealt with the general question of the manner in which advertising charges are fixed. There is a need to relate that to existing charges. It would not be appropriate for the Government to seek an increase in advertising charges and to advance as a justification for such application the reason that this should be used as a vehicle for paying for a new service. The NPC would be right in disallowing any such application.

Of course they would, and neither is there a case to be made for the increase in the licence fees.

I have drawn attention already to the fact that I find all of this quite hypocritical coming from the other side because the people over there not only increased the charge by a 33? per cent but on a subsequent occasion in 1976 they added insult to injury when, having received a recommendation from the NPC, they ignored that recommendation and proceeded to increase the licence fee by a greater amount. Now they talk about imposing charges on poor people. Where was their concern on the two previous occasions?

I said that advertisers would be in a better position to afford an increase than are poor people.

I am making the point that the increases are being related to an additional service and that it is appropriate that this be so.

Were the projected costs that were used in computing the amount of the increases that were allowed only those that would be allowed as allowable costs within the terms of the price control criteria in use by the NPC?

As I indicated in my reply, since the question of fixing the charge for a new service does not fall within the ambit of the NPC, it was not examined on that basis. To the best of my knowledge a similar format was followed but I would not like to say categorically how each item was or was not classified because, as the Deputy is probably aware from previous experience, items occur in the accounts of any organisation which are a matter of some discussion or occasional difference of view as to whether or to what extent they are allowable for price increase purposes.

Would the Minister not agree that the NPC follow precise criteria as to what are allowable costs, and since he has indicated that these criteria were not applied in this case, will he tell us what criteria, if any, were applied, or if the usual criteria were not applied, why was not independent advice sought?

As I have indicated we sought information on the likely operating costs and on the revenue that would accrue from sources such as advertising. That was the basis for the formation of an estimate of the additional revenue required by way of licence charges. The reason for my drawing the distinction between this and the NPC was that I had no way of knowing the precise manner in which the commission operate their rules in any case. Last week I had occasion to wind up discussing a somewhat similar approach with the Deputy. It is never any part of my intention to endeavour to look into someone's mind or heart.

The Minister can hardly belong to Fianna Fáil and say that.

The Deputy would be surprised. The NPC are not Fianna Fáil. They are an objective and impartial body.

Will the criteria used be published?

The public are entitled to the information.

They have been told that there are additional costs arising from the introduction of a new service and that the increases in the fees are being levied to meet those costs.

That is a simple explanation.

Sometimes the truth is simple.

I am not concerned either with the 1974 or the 1978 decisions, but arising from the Minister's reply in which he has indicated that the provision of a new service is the reason for the increases in licence fees, can he say on which basis any such additional charge can be applied to the Northern half of County Donegal where we have neither RTE 1 nor any prospect of receiving RTE 2?

That is a separate question.

It arises as a result of the Minister's reply. What is the position in respect of viewers in those areas of the country where the service will not be available? Is it not ludicrous to apply an increased charge for a service that will not be provided? If one looks at the maps of those areas in which the new service will not be available, one finds that the Northern half of County Donegal is included.

I take the point that there may not be 100 per cent coverage of the new service, but RTE are endeavouring to provide the service to the maximum number of viewers at the earliest date possible. I do not have precise details regarding a service for the area to which the Deputy refers, but if he wishes to table a question in that regard I shall endeavour to ascertain the information for him.

It is neither projected nor promised that the service will be available in that area. Can there be any pretence either by this administration or by their predecessors that any attempt has been made or is being made to make the service available to the greatest number of people possible considering that the nearest mast is over 100 miles from the northern part of Donegal and that this can only be, at best, freak reception. We are not getting this freak reception but we are being asked to pay for the rest of the country.

Technically the answer is that those people should not have television sets if they are not getting a service.

That is the most fatuous answer one could expect. One expects a little better from the Minister, who understands this business much better than he pretends.

It is not a fatuous reply. I am making the point that——

Those people are not getting the service they are entitled to but they are paying for it.

(Interruptions.)

I am making the point that a reasonable person does not leave himself open to——

The Ceann Comhairle is aware of what I am talking about. I am surprised he has not informed his colleagues where North Donegal is, or perhaps they do not want to know. The Minister says we should not have television sets because we cannot get the service the nation is paying for and for which we will have to pay increased fees. No fees if there is no service should be the quid pro quo in this matter. It is a bloody disgrace.

Is the Minister aware that the only service several hundred thousand viewers will get as a result of RTE 2 being introduced—I am not speaking of people in North Donegal but those living north of Dublin—is a partial blacking out of BBC 2 which they are getting for nothing? How can they be expected to pay this increased fee? Is the Minister further aware that a prominent member of the RTE staff stated on television recently that the increase was not for the purpose of paying for RTE 2?

Let me deal with the second point first. I have no knowledge of any statement made by RTE to the effect that these additional charges were not to meet the cost of the second channel.

The public should not be asked to pay for it.

I have no idea where that statement originated, because the previous Minister for Posts and Telegraphs made it quite clear——

He is an honest man.

I am making the point that this topic should not be used to score party political points. The proposal to increase fees to pay for RTE 2 was made by both sides of the House. If I may go on to make what might be construed as a party political point, the actual increase in the licence fees originating from the introduction of RTE 2 is not as great as was expected. Because of such things as the points to which Deputy Corish was referring, advertising, the revenue from that area has been more buoyant thanks to more buoyant economic conditions.

That is not a party point?

I am still dealing with the two questions raised by Deputy Tully.

I thought the Minister was making a party point.

I am making the point that the increased charge is lower than might otherwise have been expected, and one reason for this is the more buoyant economic situation. The Deputy's second point was that BBC 2 is being blacked out. My understanding is that RTE have gone to great lengths not to interfere with existing reception, and to route the new service in such a manner as to minimise interference with existing reception.

Would the Minister not agree that it is important that the television viewer, like any other consumer, should be assured that price increases will be subject to the closest scrutiny, subject to certain criteria which will be laid down. This being the case, would he agree that an assurance should be given that from now on increases of this nature should be subject to the scrutiny of the prices commission? Would he also agree that the feeling in the multi-channel area is that the viewer is being mulcted? This indignation has increased since the people realised that there will not be a great choice of programme when RTE 2 is introduced. "Coronation Street" will be on both channels at the same time.

As I have already made clear, it is not this Government but the previous Government, who were guilty of not referring proposals for increased charges for existing services to the prices commission. It has been our general approach to endorse the work of the prices commission and to recognise their value by, in all cases, referring applications for price increases to that commission. As I have already indicated, the reason why it was not done in this instance was that it did not apply.

Will it apply in future?

I covered myself by saying that on any future occasions it would be a matter for the Government to decide, depending on particular circumstances. One cannot anticipate every future possible situation, but let me assure the Deputy that it has been, is, and to the best of my knowledge will continue to be the practice of the Government to recognise the work of the prices commission.

Question No. 12.

It would be very difficult for the prices commission to increase——

I have called Question No. 12.

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