asked the Minister for Communications the measures which were taken to establish whether or not demand exists nationally for the National Commercial Television Channel, which was announced by him at the Fianna Fáil Ard Fheis; if he has undertaken any research to establish if sufficient advertising would be available to fund the new channel without adversely affecting RTE and leading to a major increase in licence fees; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - National Commercial Television Channel.
1.
The Government are satisfied that there is sufficient interest in the potential for establishing a third television channel which would be independent of RTE to warrant offering a franchise for the service and that at the end of the day this is the most effective way of testing demand for such a service. The Government's intentions in this regard are part of their policy for the broadcasting sector of providing opportunities for greater choice of service and plurality of views and opinions, of exploiting new opportunities created by new technologies, of providing greater competition in the broadcasting sector as in the other areas previously confined to the State, and of offsetting the imbalance which arises from the increasing number of external services becoming available here.
While the proposed new service will undoubtedly have some impact on RTE advertising revenue, I am not so pessimistic as to believe that it will have unduly adverse consequences for RTE, or that it will necessitate the "major increases" in licence fees which the Deputy fears.
I take it that no scientific survey or test of the market has been carried out to see whether it could bear another national commercial channel. The Minister is aware, I am sure, that even at present UTV, for instance, draw advertising from the Republic of Ireland and that any further competition for that type of advertising is bound to have an effect on the revenues of RTE. Does he foresee the effect of that being an increase in licence fees?
No, I do not see that arising. I do not see the major increases referred to in the Deputy's question arising at all. There has not been an increase in licence fees since 1986. I believe that RTE will tackle the competition. They are already responding in a positive way to the potential competition, both in radio and television. I have full confidence in the ability of the management and staff of RTE to respond in a positive way. When the Deputy mentions UTV, that is just one of many stations coming in. The Government take the view that it is important we offset this imbalance arising from the increasing number of these external services becoming available here through satellite and the other channels.
When the Minister speaks about offsetting, what exactly does he mean by offsetting these external stations, let us call them? Is he talking about news, points of views expressed, or what exactly is he talking about?
I am talking about the Irish ethos as distinct from the imported.
So UTV is an imported ethos?
Could the Minister assure the House that there will be legislation brought before us before any change of this nature will be made? Secondly, specifically on the question of advertising revenue, has he estimated the total pool and what will be necessary for this channel?
Yes, there will be legislation and I have estimates of the figures but they are really not relevant, merely estimates. The demand for any new product in relation to advertising potential and so forth is more latent than explicit at this time. While the estimates are there, I am assured by those in the industry that it is more than sufficient to carry a new station.
A Cheann Comhairle——
May I ask——
Please, Deputies, I shall hear a final question from Deputy Pat O'Malley. I want to make progress on other questions.
Will there be any requirement on this new television station to carry public service broadcasting programmes in their schedule?
Public service as distinct from public sector broadcasting, yes.
Could I just——
I call Question No. 2.
2.
asked the Minister for Communications the estimated cost of setting up the proposed new television station, whether it will have a "must carry" status with existing cable companies and the new MMDS; and whether the station will pay for this facility.
The proposed new television station will be established by private enterprise. Until applications are invited and proposals received for the franchise, I am not in a position to give any estimate of the costs that will be involved for the successful applicant.
The station will have a "must carry" status on cable and MMDS systems and at this stage I do not visualise that the station operator will be required to pay for the facility.
Will the fact that the station operator will not have to pay for these facilities conflict with commercial fairness to the bodies distributing the MMDS signal? Further, can the Minister confirm whether the expansion of the MMDS system that he envisages will mean that fees will have to be paid to the BBC which were not heretofore paid? Will he, in effect, become a collector of money from consumers on behalf of the BBC?
As far as the non-payment of royalties to the BBC and ITV networks by the cable companies at the moment is concerned, my understanding is that negotiations have been proceeding for some time about payment of royalties in advance of any proposal for MMDS. MMDS is merely a wireless type of cable system. The introduction or otherwise of MMDS is not relevant as far as the royalties question is concerned. With regard to unfair advantage, RTE, for example, do not pay to be carried on the cable companies and this is the same type of system. MMDS is the same, except that it is wireless as distinct from cable. There is no unfair advantage whatsoever. As a matter of fact, a number of the satellite channels that are now being carried are carried free. One or two of the other channels that were asking to be paid royalties were asking the cable companies to pay them to carry the system, rather than the other way around. They have now been knocked off by the cable companies — CNN, for example.
On the first point of non-payment of royalties, can the Minister confirm the truth of reports that the MMDS is a different system in that it involves rebroadcasting and will, therefore, bring to a head the question of payment of royalties in the way that head end systems that pick the programmes out of the air would not? Would he not, therefore, agree that this will result in the likelihood of payment of royalties having to be made?
I do not want in any way to damage the negotiating position of the cable operators in relation to the dealings with the BBC and independent channels in the UK. It is a fact that the negotiations are proceeding and, as I understand it, nearing completion in relation to the years that they have been operating without paying royalties. I do not want to say anything in the House——
It is a system change.
It is not a variable.
Will the new station which the Minister is proposing be obliged to carry a precise proportion, or an overwhelming proportion, of home made programmes in order to preserve this Irish ethos of which he spoke earlier?
That is the intention, that they would carry at least 40 per cent. RTE are doing an excellent job at the moment. In recent years they have increased their percentage of home produced programmes from a very low level to about 45 per cent now. They are continuing their concentration on this and recognise that in the competitive environment in which they will operate in the future they will need to concentrate more and more on the home production. That is what the people want; it is where the advertising is and where the numbers are. It is intended that the independent station will commission programmes and that up to 40 per cent of their transmission time would be used for home produced programmes.
Will the Minister confirm that the MMDS system, from a technical point of view, is a rebroadcast of a signal? Referring to the point which Deputy Richard Bruton made, would that not mean that there would be royalty implications and that payment would have to be made on the basis that it is being transmitted as a rebroadcast signal as distinct from being transmitted in the normal way through the system that exists at present?
The MMDS is known in the trade as a wireless cable system. I wish to emphasise that royalties will have to be paid to MMDS or cable although for years they have not been paid. It is the subject of negotiation at the moment between the cable operators and the companies, BBC and the Independents, and I cannot say any more on it at this stage.
3.
asked the Minister for Communications the way in which he intends to licence operators of the MMDS system recently announced; the charges which will apply to consumers; and if the scheme will be extended to areas even where a small proportion only of householders are willing to subscribe.
Applications for licences for MMDS will be invited by my Department in accordance with new Statutory Regulations to be made under the Wireless Telegraph Act, 1926. These regulations are currently at an advanced stage of preparation and will be laid before the Houses of the Oireachtas in accordance with the requirements of the Act.
The charges which will apply will be a matter for the licensee in the first place and will depend on a range of factors such as the investment involved in each particular system, market size, take-up of subscribers, etc. The expectation is, however, that charges will be of the order of those currently applying in the more modern and recently built cable systems, about £100 rental per annum. It is expected that a once-off installation charge of about the same amount will be payable.
Applications for licences will be invited in accordance with a frequency plan designed to achieve national coverage. Any householder within the licensed service area of an established MMDS transmitter will be able to subscribe to the service.
In an area where there is not sufficient take-up to make it commercially justifiable for an MMDS licensee, does the Minister envisage that the service will, nonetheless, be provided? Will the charges which he mentioned be standardised across all MMDS providers or does he envisage regional differences in the cost, depending on take-up and difficulties in distributing the system?
There is no question of the State involving itself in the construction of these transmitters. I am confident, having regard to the interest already shown by the cable companies and other commercial interests in the announcement I made at the Fianna Fáil Ard Fheis in relation to MMDS, that there will be no difficulty in securing sufficient operators for the system on a countrywide basis. I do not envisage that there will be geographical variations in relation to the costs.
Am I to understand that there will be a uniform charge across the country or will it be at the discretion of the licensee? If there is not a sufficient take-up from subscribers, does the Minister envisage that the service will not be provided or, alternatively, much higher charges being levied on those regions?
I am much more confident about the take-up than the Deputy appears to be. I have no doubt that there will be national coverage, as that is the intention. The indications are there already from inquiries to the Department about the commercial opportunities that this new system makes available in the improved business environment as a result of the Government's policies. People are looking for investment opportunities and I am sure this will be taken up on a national basis. Of course there are variations in cable systems at present on a national basis between Cablelink, Dublin, Cork Communications, and Westward, Limerick. The same applies to illegal broadcasters who are rebroadcasting. However, I aim to minimise these variations as much as possible.