The granting of such a licence which involves the allocation of a radio frequency, which is indeed a valuable national resource for exclusive use by an operator within a specified area, bestows on that operator the prospect for considerable revenue earning potential. The primary asset that a new station will have is its radio frequency. The capital outlay and the set-up costs to get on air will be small relative to the earning capacity from advertising revenue. Consequently, it is very important that the licence is awarded on merit in terms of the overall package the company is offering and not because the company have an advantage over another company, by virtue of the fact that they have the ear of the Minister and are in a position to make more effective representations to him. The whole process must be depoliticised. I accept and acknowledge that the Minister has recognised that point and I welcome it. It is not right that any Minister should be put in a position where he can bestow an economic advantage on one company over another company.
There is plenty of precedent for that approach. An Bord Pleanála was established to take decisions of that nature out of the political arena and to make decisions based on what was in the best public interest or in the interests of the community at a whole. A similar type of framework must apply to granting of independent sound broadcasting licences, and indeed to independent television licences when legislation is introduced to cover that area. I understood from the Minister in answer to a question recently in the Dáil that he had proposals to introduce independent television in the near future.
Apart from the granting of licences it is, in any event, more appropriate to have an independent Authority to oversee the orderly development of independent broadcasting and to take over responsibility for many of the functions which the Minister would control if the Bill is not amended. The Authority should be responsible for and address such matters as deciding the ratio for licences in various categories of stations in a given catchment area having regard to the availability of frequencies in that area.
It is very important that community or neighbourhood radio stations, which are non-profit distributing, should be fostered and there should be positive discrimination towards the development of such stations. The suitability of applicants for licences, the valuation of the range and type of services they intend providing, their relevant expertise, experience and financial status, their proposals for handling complaints and all such matters relating to what is best in terms of the development of independent broadcasting should be left to the independent Authority to decide.
The broadcasting review committee which reported as long ago as 1974, was set up to make recommendations in regard to the further development of broadcasting services. One of its main recommendations was that an authority should be established to oversee any broadcasting other than RTE and also to control cable television. In fact, the Minister's recent announcement that he intends introducing legislation for independent commercial television has broadened the debate considerably and underlines further the necessity for having an independent Authority to oversee the whole area of independent broadcasting services.
Independent television will pose a much greater challenge to RTE than sound broadcasting in terms of the effects it will have on their advertising market share. The question as to whether RTE should retain control of Cablelink as Deputy Bruton has said, must be looked at when independent television comes on stream, as the Cablelink company would be distributing independent commercial television signals for the private companies and there could well be a conflict of interests there.
The advisory committee proposed by the Minister in this Bill, would not be adequate in my opinion to deal with all these aspects of broadcasting. Of course, as far as granting of licences is concerned, the proposed committee only had advisory powers which the Minister could have ignored but I accept that now he has altered that situation. The Minister said that the reason he opted for an advisory committee rather than a separate broadcasting authority was that the new Authority would require State funding and would impose unduly high levies on potential radio services simply to finance itself.
I do not accept that the levies imposed on licensees would hinder the development of these services, as a relatively small sum would be required to fund the operations of the Authority and after initial set-up costs the Authority would be self-financing. In any event, I do not think the independent Authority would be much more costly than the advisory committee. As Deputy Bruton has pointed out, the figures are not too dissimilar. There is not a great deal of difference between the funding the Minister outlined in his speech for an independent Authority and for the advisory committee for which he has accounted in the Bill.
The levies paid to the Authority should be graded by category and type of station and based on a percentage of the total projected advertising revenue they would collect. The licence fee should also be graded — I am glad to see that in the case of community radio it will be a nominal fee — and such fees should be paid directly to the proposed Authority. What is being sought then, and what is entirely possible to provide, is a truly independent, self-financing broadcasting Authority which will have a clear mandate to bring onstream new dynamic broadcasting services and which will allow society as a whole to benefit from these services.
It is obvious that there is no shortage of talent and resources in the community to become involved in the provision of independent broadcasting services. The illegal stations have demonstrated that for the past ten years and their illegal status was brought about solely because there was no legislative framework available for any broadcasting station to operate other than RTE.
The function of this Bill, the Sound Broadcasting Bill, and its sister Bill, the Broadcasting and Wireless Telegraphy Bill, 1987, is to correct that situation and allow the talent in society to gain legitimate entry into independent broadcasting. This, as I have said before, is to be welcomed but it must be done in a fair and balanced way in the interests of the community as a whole.
I would like now to turn to the various categories of radio stations the Minister has announced. Section 3 highlights the desirability of having a diversity of services. The provisions of the Bill do not go into any detail in categorising the various types of station. The Minister did so subsequently in the course of his remarks. It is important that we examine this area and that the treatment of the various categories be incorporated in the Bill. It is what is in the Bill that is important, not so much what is contained in the Minister's remarks.
The Bill has been drafted in a very general way. Effectively it allows anybody and everybody who wishes to apply for a licence to be given an opportunity to do so. While this approach could lead to the establishment of many stations initially the failure rate could be quite high. However, it is the only practical course open in that it gives all interested parties an opportunity to apply for a licence. The independent Authority's role will be crucial at this stage in sifting the applications and getting the mix right in terms of what is appropriate for a given region or subsectors within a given region.
The proposal to establish one national station is somewhat surprising. To date proposals for independent radio are based on the concept of commercial, local radio stations for regions and cities, and community radio for more localised, smaller communities. This is the structure that has evolved under the existing illegal stations in the past ten years. I am not aware of any demand for an independent national station. Such a station would compete with RTE on a national basis and, if established successfully, could have a major impact on RTE's market share of radio advertising. While regional and city stations undoubtedly would attract much advertising from their local catchment areas there would still remain a strong, national advertising base at present available to RTE exclusively.
It is important to give careful consideration to what we are endeavouring to achieve under the provisions of this Bill. Our objective is to establish an alternative, viable, independent broadcasting service for which there is demand and, at the same time, ensure that RTE continue to fulfil their obligations as the national, public service broadcasting station. While RTE are capable of dealing with competition from and co-existing with independent local radio, their position could be seriously undermined if a national station comes on stream. This would not be in the public interest.
The proposals for the establishment of city and county-size stations are all right as far as they go. However, I would question whether it is right to have a rigid framework, to adhere rigidly within county boundaries, when licences are being allocated for the proposed 24 stations the Minister has scheduled. There are many locations nationwide where, because of the geographic circumstances or the grouping of certain towns, a county or part thereof has a natural hinterland in an adjoining county. In those circumstances the Authority should take note of those factors and have the flexibility available to them to offer licences on an inter-county basis, or whatever they deem to be appropriate. If the provisions of the Bill seek to follow the granting of licences on a county-by-county basis, that would be too rigid. Therefore, the flexibility I have mentioned needs to be introduced.
I am concerned also about the intention to have different time scales for the phasing in of the various categories of stations. Deputy Richard Bruton has referred to this aspect. The phasing of the franchising will give a larger station a major advantage over the medium-power town stations and the low power neighbourhood stations. If the initial phase of franchising concentrates on the larger commercial stations, the smaller stations will find it much more difficult to develop and get off the ground. The town stations, which are to have a range of eight to ten miles on VHF frequency, could find demand for their services catered for already by the large city and county stations. If they are to develop and survive at all as commercially viable entities, their licence applications should be considered and dealt with at the same time as the larger stations.
I accept that there will be a period of trial and error in establishing what radio services will last in a given area or what is best suited to a given region but town stations would have a unique identity and should not be discriminated against by restraining their development until after the city and county stations are up and running. Obviously it would be much more difficult for them to get on air if that were the case.
The position regarding neighbourhood or community type stations is even more important. The development of true community broadcasting is a very worthy objective and must be encouraged. The provisions of this Bill definitely do not do so. The type of radio service the community stations provide — which is not a commercial service in the real sense of the word — will not develop if there are not certain safeguards included in the Bill to ensure that it has at least a fair chance. It appears to be the intention to cater for this sector by allocating a generous number of low power VHF frequencies to them but the provisions of the Bill need to discriminate positively in their favour. Typically, these stations would be run by a non-profit distributing trust or co-operative. Their commitment would be to the usage of surplus funds from local advertising and other resources generated by their local communities for further community work and development.
The objective of community or neighbourhood radio is to provide access to the communications network for as many people as possible. If given a fair chance community radio will enable this to happen and will give rise to much greater debate within our society. It will facilitate and encourage ordinary people, together with residents' associations, sporting organisations and other community groups to speak out on matters directly concerning them and their communities. This form of radio would allow people access on the airwaves to debate issues of local community interest with their local representatives. That is a highly desirable development. The dynamics of commercial radio are inexpensive, pop programming and maximum advertising whereas the dynamics of community radio are the development and enrichment of the whole community. Such a service provides a means of bringing in the voice of the ordinary people as an alternative to that of the professional broadcaster and commercial popster. A large number of representative groups, properly organised, can participate in neighbourhood radio as the costs of getting established are not prohibitive. A total of approximately £10,000 would purchase a low power VHF transmitter and other ancillary equipment. The total annual cost of running one of these stations should not exceed a figure of £30,000.
I know the Minister is supportive of neighbourhood stations for the reasons I have outlined. I am sure every party in the House would be supportive of them as well. However, I contend that their prospects of development would be very much lessened if we do not positively discriminate in that direction. I do not see that the provisions of the Bill cater for that at all. The provisions of the Bill should include not just a structure for community broadcasting but an outlining of a policy decision by the independent broadcasting authority I am proposing to encourage the development of these stations. Indeed the phasing in of these stations should be encouraged from the outset to ensure they are not overwhelmed by the larger commercial stations operating in their catchment areas. The planning and development of all categories of radio stations will be a complex job, another reason an independent authority is needed to carry out that task in a fair and balanced way.
I accept that there will be possibly several failures after stations have been on air for a while. Market forces and listeners' choice and preference will largely dictate what survives. The important thing is to ensure that there will be a good balance in terms of the size and category of those that do survive.
I should like now to deal with the proposals in the Bill for handling licensing applications. For example, in section 2 the Minister will invite applications for licences in a given area by way of advertisements to be placed in the national and local press. Would the Minister not consider that applicants should be required to publish their intention of seeking a licence, similar to a planning application notice? Such notice would give details of the type of licence sought, the catchment are to be served, the promoters of the proposal and any other relevant data. The public and other interested parties could then go to a public office and examine the proposals in detail and be given an opportunity to raise objections or make comments, which should not be frivolous, and would be based on the content of the application itself.
This practise would provide an opportunity for the licensing authority to get a better overall view of the various interests in that particular catchment area and enable them make a decision on the allocation of licences for the various categories of stations. I would ask the Minister to give serious consideration to this proposal as I feel it would result in a more balanced and more representative framework.
I would like to comment also on the proposed terms and conditions set out for sound broadcasting licences, as detailed in section 5 of the Bill. In subsection (2) it states that the Minister may specify the period during which such a licence shall continue in force.
Would it not be better that every licensee should automatically have to renew his licence after a specified period — say in four or five years with the Authority, of course, retaining the right to revoke or alter the terms of the licence during that period? Under a system where a licensee had to seek automatic renewal of the licence, the Authority would be able to exercise much more effective control as there would have to be a full review of the operations of the station, going into a detailed examination of whether the licensee had complied fully with all the terms and conditions of his licence. This automatic form of examination would be much better than the less rigorous approach which would apply if the renewal date were left open ended.
Licensees should have no grounds for fears that they would not be relicensed if the system were as I have outlined, because it would always be open to them to re-apply for a licence at the end of the period. If they had been running a station in comformity with the regulations they should have no fears about having their licences renewed.
Turning again to section 3 of the Bill, subsection (4) states that due regard will have to be given to the character of the applicant company including, if considered relevant, its members and shareholders. I think it is essential that shareholding should be fully disclosed because if it is not, then a situation could rise where one shareholder or a group of shareholders could control several radio stations in a region and that kind of monopoly would not be in the best interests of the development of this service.
There should be full disclosure of shareholding and that means the beneficial owners of shares should be disclosed if shares are held by nominees because this gets back to who is controlling a company or companies.
I would argue strongly also that each licensee company should issue a report annually to the Minister. Other companies in the State which operate under licence, such as banks, and insurance companies, are obliged to issue an annual report and detail in it directorships, shareholding, finances and complaints etc. The same should apply to independent broadcasting stations, and all these data should be available on a public register.
I would like to return briefly to the position of RTE and how it will be affected by the introduction of independent radio broadcasting. This Bill does not provide for any role for RTE in commercial radio. The argument has been put forward that RTE have had the field to themselves for the past 60 years and have had the benefit of being able to avail of both a licence fee and advertising revenue. The sole income for independent operators will, of course, be confined to advertising only.
I do not hold a brief for RTE and I certainly no not want to perpetuate the monopoly they have had. I welcome competition in this whole area. RTE's role as the primary national station is to continue to provide the excellent public service broadcasting output they have been providing over the years. Many aspects of their programming could rightly be said to be non-profitable and this is necessitated through the obligations they have under the Broadcasting Acts to provide a service which is, in essence, public service broadcasting and not just a commercial service.
The maintenance by RTE of the two orchestras, their commitment in terms of programming content to cultural, educational and current affairs material and the high proportion of home produced programmes, are all part of their public service broadcasting obligations.
These services cost a lot of money to provide. The commercial stations do not have these obligations imposed on them and, with the exception of having to include news and current affairs as 20 per cent of their broadcasting output, the balance of the commercial stations output would be low cost and will almost exclusively concentrate on continuous pop music and advertising.
I would like to take up a point Deputy Bruton made in relation to this 20 per cent. I agree with him in the sense that it is possibly a requirement that should not be as heavily imposed as it is intended from what the Minister has said. Whether it should be confined to news and current affairs only should be questioned. Perhaps these independent stations would be going some way to meet the obligations the Minister is trying to get them to meet if, instead of news and current affairs, they had material on educational and cultural matters included in that 20 per cent slot. It might be too much to expect them to confine their input in that 20 per cent to basically news and current affairs. Perhaps there is scope to broaden that in terms of other material that could be provided.
RTE's financial position has improved considerably in recent years and they achieved profits of approximately £5 million last year. So they are in good financial shape to take on the competition that will emerge with the advent of commercial radio. However, it is important that RTE should be allowed to compete on an equal basis with the competition that will now emerge.
I have already pointed out that the major problem for RTE in terms of market share for advertising will come from the proposed national independent station. RTE should be better able to cope with competition from the smaller regional and local stations. But in order to enable RTE to compete on equal terms the Minister, if so requested by the Authority should give favourable consideration to relaxing some of the restrictions on broadcasting hours and advertising content on RTE 1.
Cork Local Radio will undoubtly be put in jeopardy if the present restrictions are retained on it. At present Cork Local Radio broadcasts for just a few hours a day and obviously this station cannot survive if it is going to be in competition with two or three independent stations, operating in its catchment area, which have freedom to broadcast for up to 24 hours a day if they wish. Either the Government are serious about Cork Local Radio continuing as the only RTE controlled local radio station or they are not. It is unrealistic to expect that this station can survive if it is not given greatly increased broadcasting time given that two other stations will be operating in the same catchment area.
I also feel that RTE have a role to play in the development of the smaller neighbourhood stations. These stations would not be competing with RTE and, as I have said already, their development should be positively encouraged by the State. Are RTE to be prevented from providing what could be a very valuable service to the smaller stations in the form of training and supplying a sustaining service during the hours these stations are not broadcasting directly? I would like the Minister to clarify that matter for me as I feel it could be crucial in terms of the development of these smaller stations. Obviously RTE should charge appropriate fees if they become involved in these small neighbourhood stations.
With regard to the existing pirate stations, the Minister stated that they would not be debarred from making applications for licences. This is as it should be because up to now the illegal status has not been the fault of the stations but the fault of the current legislation which has failed to cater for the reality that the public want a choice of listening service. Every station, other than RTE, is at present illegal. The passing of the Broadcasting and Wireless Telegraphy Bill, 1987, will of course change all that if it is rigorously enforced as I expect it will be and thereby bring an end once and for all to the present unacceptable pirate situation which has existed for over ten years.
The applications from these pirate stations should be carefully scrutinised and this is another reason why a public register should be kept giving full details about all applicants, including disclosure about their previous involvement, if any, in broadcasting.
One of the major justifiable criticisms of these stations up to now by RTE was that they operated in an irresponsible way and were purely motivated by profit. Many of these illegal stations interfered with frequency allocations for RTE and other communications services, including the gardaí and emergency services. In addition many of these stations did not pay royalties, corporation tax, VAT, PAYE or PRSI and they flouted the law in every possible way. Such operators should not now be legalised and licences should only be granted to former pirate stations that can demonstrate from their records that they operated responsibly. A condition of granting licences to these stations should be that they pay royalties and outstanding taxes on the profits they made in previous years. It is estimated in a reply to a question in the Dáil that a minimum of £4 million a year has been earned in advertising revenue by all the pirate stations.
On the question of the participation of newspapers in independent broadcasting, I should like what I am proposing as an independent authority to be looked at closely. While I do not want to debar newspapers from involvement in commercial radio, there is a danger that a media power block could be built up if they become involved in a totally uncontrolled way. That is one of the reasons we need an independent authority to look at all the implications and ramafications of things like newspaper involvement.
In conclusion, I welcome the intention of these Bills in so far as they will regularise the present position with regard to pirate operators and bring about an orderly development of legal independent radio services. However, the Sound Broadcasting Bill, which is very general in its terms, has many defects which I want to see rectified. I shall be very interested indeed to hear the Minister's response to my various criticisms. If he feels that these points can be accommodated, I and my party will have no difficulty in supporting the Second Stage but, as I said as the outset, we shall be putting down many amendments for Committee Stage. I shall go into more detail at that time.
