The joint committee has invited representatives of RTE and the Broadcasting Authority of Ireland to speak about digital terrestrial television. I welcome from RTE Mr. Conor Hayes, chief financial officer, and Mr. Rory Coveney, senior communications manager, and from the Broadcasting Authority of Ireland Mr. Bob Collins, chairperson, Mr. Michael O'Keeffe, chief executive officer, Ms Celene Craig, deputy chief executive, and Mr. Neil O'Brien, director of engineering. I draw their attention to the fact that, by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give to the committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person or persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they 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 now invite Mr. Hayes to make the presentation.
Digital Terrestrial Television: Discussion
Mr. Conor Hayes
I thank the joint committee for inviting us to come here today for a discussion on the current position and the plans for the future post the switch-off of analogue television services in Ireland. We have distributed documentation to committee members which explains in detail how RTE is preparing for the switch-off in 2012. I will speak about some of the key steps and issues laid out in the documents.
I do not propose to outline today the history and current state of play regarding commercial DTT or what is called pay TV, as this is a matter for the Broadcasting Authority of Ireland, BAI, rather I would like to look forward and focus on how RTE will meet its requirements under the Broadcasting Act 2009 and to address the very significant challenge presented in ensuring licence fee payers will be able to continue to enjoy the best free-to-air television services post the analogue switch-off.
An important point to make is that we are all working against the clock. In compliance with EU policy, decided a number of years ago, the switch-off of the existing free-to-air analogue terrestrial television network is planned for 31 December 2012. In February this year an interim deadline was set by the Minister by means of Statutory Instrument 85 of 2010 — by 31 October 2010 RTE is required to have a national television public service broadcasting multiplex operational and capable of being received free to air by approximately 90% of the population from that date. All of RTE's plans are designed to ensure we will meet these deadlines and that we will have in place a replacement digital terrestrial television, DTT, system that will replicate the current level of coverage under the existing analogue terrestrial television, ATT, system, while providing licence fee payers with the additional services and enhancements offered by digital technologies. Under the current ATT system, RTE One and RTE Two are available to approximately 98% of the population. TG4 is available to approximately 95% of the population and TV3 to approximately 85%.
The scale of the task to be addressed is substantial. RTE has a number of business units. RTE Networks Limited, RTENL, is a wholly-owned subsidiary company of RTE which operates the transmission and distribution network for television and radio. As an ancillary, it also sells mast services to other users. It is a substantial piece of national infrastructure. Some one third of all television sets in Ireland and almost one quarter of all domestic households in Ireland rely on RTENL's free-to-air analogue terrestrial network as their primary source of television reception. In substantial parts of the country the reliance on RTENL's network is of the order of 50% as the primary source of television reception. This is particularly the case in western parts of the country in which roughly one third of the population lives. The actual percentage in these areas is of the order of 50%.
The documentation provides a detailed analysis of the current television reception sources in domestic households. This analysis excludes places such as holiday homes, pubs and hotels. There are approximately 1.6 million domestic households in the country. The salient point is that approximately 1 million people in every part of the country are likely to suffer some level of disruption to their television service in 2012 as a result of the analogue switch-off and they will need a new digital reception source. That new source is DTT and satellite systems. RTE wishes to make two complementary digital transmission systems available to replace the analogue terrestrial television network, the first of which is digital terrestrial television, DTT, with which people are familiar, as it has been discussed for a long time, while the second is an RTE free-to-air satellite service, the first time such a free-to-air satellite service will be offered in Ireland. The combined offering is designed to be the most cost-effective solution for viewers and broadcasters; to offer for the first time 100% coverage of free-to-air public service television services in the Republic of Ireland; and to provide full national back-up coverage on satellite in the event of an emergency or catastrophic failure of the DTT system. Earlier this year, terrible disruption was caused by all sorts of unusual and unpredicted events, such as the eruption of a volcano. That made us realise we needed to consider these issues. The combined offering will also encourage the possibility of bundling free-to-air public service television and broadband services.
Some members of the committee will be aware of the Freeview service in the UK. The equivalent service in Ireland will be called Saorview. RTE Network Limited, on behalf of RTE, has designed and is in the process of constructing the infrastructure required to enable two free-to-air national public service DTT multiplexes to be available to support the switch-off of analogue services. A multiplex is simply a slice of spectrum, in digital terminology. I will set out RTE Network Limited's current predictions for population coverage of the first free-to-air national public service multiplex, which will be operational from October 2010. The company predicts that by that month, the system will have been installed on 28 sites nationally. We reckon we will have approximately 94.5% population coverage. Members should bear in mind that our statutory remit is to provide for 90% coverage. We would exceed that from the outset. Our level of DTT coverage at that stage would exceed TV3's current level of analogue coverage, which is 85%. By the second quarter of 2011, we predict we will cover 97.2% of the population from 49 sites, which would be approximately the same as TG4's current level of analogue coverage.
We will continue to install more sites from the fourth quarter of 2011 to the third quarter of 2012. As these sites will interact with each other, the overall level of population coverage will not materially alter. By the fourth quarter of 2012, we estimate we will reach the statutory requirement to have approximately replicated our current level of analogue coverage, which is 98% of the population. The equivalent population coverage for the second national DTT public service multiplex will be achieved by the third quarter of 2013, and possibly earlier. The delay in that regard can be attributed to the fact that one cannot achieve that until after the analogue switch-off. In addition, there are power restrictions in how the South of Ireland interfaces with the North of Ireland and with the UK, in terms of spectrum and planning. All of these things have to be co-ordinated.
Another innovation by RTE is promotion of its satellite option, Saorsat. Some members of the committee will be familiar with the equivalent UK service, Freesat. The BBC, ITV and a number of other companies have put their services on one of the wideband Astra satellites. The services are broadcast unencrypted, or "in the clear" as we call it. The trouble with those wideband satellites is that they have a very big footprint. If RTE were to be put up on a wideband satellite, its services would be in the clear to the UK, France, Holland and many other countries. One might ask why that should not be done, to which I would respond that we do not have the resources to purchase the rights to enable us to broadcast into those countries. We buy programming that allows us to broadcast to 4.5 million people. We do not have the money to broadcast to 100 million people. Therefore, the option taken by the BBC when Freesat was launched is not available to us.
The current analogue system has never been capable of providing 100% population coverage in Ireland. Twenty years ago, the level of coverage was between 80% and 90%. It has been increasing incrementally every year. It is not static. Wind turbines and other new forms of construction can have an effect on coverage. Aldi is constructing a large building in Mitchelstown that will have a significant impact on coverage. We will have to take account of that, as we do every time a new development, such as a shopping centre car park, affects the level of analogue coverage. It is not a fixed thing — it moves on a continual basis. A certain proportion of the population has never been able to avail of public service television. That is where the satellite option comes into play. The board of RTE has recently approved a unique satellite based approach, developed by RTE Networks Limited, that will enable Irish public service channels to be made available free to air and unencrypted, for the first time, as a means of covering the last 2% of the population. We anticipate that the Saorsat satellite service will be available from the second quarter of 2011. We are taking advantage of a new form of technology that operates in much the same way as UHF and VHF, with which members will be familiar. We will operate in a different frequency band on this satellite to allow us to broadcast unencrypted. A spot is being dedicated exclusively to Ireland.
I wish to speak about the proposed digital free to air channels. We are still finalising the channel line-up, which we hope to make available on the DTT and satellite systems. I emphasise that this is a tentative proposal because RTE will not decide what is on this platform. It is very much a ministerial decision RTE proposes that RTE 1 and RTE 2 will be carried on the service. RTE Two will be carried on what is known as "high definition light". For example, we would be able to cover the GAA championships of the summer of 2011 in high definition on a whistle to whistle basis. We do not have all the infrastructure at our studios to show the rest of the coverage in high definition. We propose that the high definition services should be offered on DTT only, thereby giving people an incentive to switch to DTT. Obviously, under the legislation TV3 is entitled to be carried on the free to air digital service, at the discretion of the Minister. TG4 will obviously be there.
Some members of the committee will be aware that two years ago, we launched a service called RTE News Now, which is a channel being transmitted on the Internet. We propose to make it available on DTT as well. There will be another channel stream on which we propose to mix a number of channels. For example, we might carry Euronews on the stream overnight, with RTE Children's being shown during the day. We hope that RTE Children's will be an advertising-free zone. Therefore, there will be no advertising on this channel at certain times of the day. Parents will be able to let their kids watch it without being exposed to any commercial activity at all. The same channel will be used in the evening as an RTE One "+1" service, which would allow people to watch the "Six-One News" at 7 p.m. We have suggested to TV3 that it should apply to the Minister to allow its sister channel, 3e, which is currently available on cable and reaches approximately 65% of the population, to be carried as a digital free to air channel. We also propose to carry RTE's digital teletext on the service. The committee will be aware that RTE has 12 digital radio channels. They will also be carried on this platform. Therefore, nine television channels and 12 radio channels will be available as part of the first public service roll-out.
Many outstanding issues in this regard have to be resolved. We have described RTE's proposals, which have been submitted to the Minister for his consideration. Analogue switch-off is a complex process to implement and to communicate clearly to the public. A significant number of remaining issues require co-ordinated decisions and input from RTE, the Department, ComReg and the Broadcasting Authority of Ireland. I have listed a number of those issues in the documentation I have provided to the joint committee. I will be happy to go through them with members. I hope this brief overview of the challenge presented by analogue switch-off has helped the committee's understanding of the tasks we face if we are to ensure licence fee payers continue to enjoy the best free to air television services in the years ahead. I anticipate that members will ask questions. I will be happy to do my best to answer them.
Mr. Bob Collins
I thank members for the opportunity to attend this meeting and discuss digital terrestrial television, which has been a long-standing public policy issue in the development of broadcasting in Ireland. It has been a clear objective of public policy that digital terrestrial television would be introduced in the State as early as possible. Alas, the development has not proceeded with the pace that had been envisaged when it was first discussed more than a decade ago. The reasons there should be transition to digital terrestrial television, DTT, are clear and in some respects, self-evident. Mr. Conor Hayes has identified some of them from an RTE perspective. The most fundamental one is that this country cannot be a digital-free zone. The State must be part of the process of transition from analogue to digital so that the potential of the technology can be realised in the interests of citizens and viewers and listeners to television and radio services.
There are a number of subsidiary reasons it was important that this country should make the transition. The first is that digital, of its nature, gives an opportunity for the carriage of a greater range of channels than is possible within an analogue environment. That, in turn, can provide the opportunity for an increased range of competitive offerings so that there is a greater range of choice available to viewers and listeners. It also has the potential, which was always seen as an important element within it, to enhance the number and range of domestically originated services or at least content, and there is a pluralist character to that, namely, that the process of enhancing the range of services would be contributed to by public services broadcasters and commercial broadcasters and those from outside the State as well as perhaps others within the State.
It is not necessary to rehearse the past in any detail, certainly not the end of the 1990s and the early part of the current century, but it is useful to briefly reflect on the process which gave rise to our being where we are currently. Members of the committee will recall that in 2008 the then Broadcasting Commission of Ireland launched a process whereby a public competition was held to identify those who would be interested in operating DTT commercial multiplexes. The three consortia, Boxer, One Vision and Easy TV emerged from that competition. The beginning of the process was one of those accidents of history. Awarding of the contract to Boxer, which won the process, coincided with the economic downturn about which nothing more needs to be said other than to record that coincidence. Boxer eventually withdrew from the process, principally because of economic circumstances but also citing its inability to negotiate a satisfactory transmission with RTENL. The commission then having satisfied itself that One Vision remained interested invited it to engage in the process. The discussions went on for a great deal longer than any of us would have wished. The ultimate outcome was its inability to negotiate a satisfactory transmission arrangement. One Vision could not satisfy the Broadcasting Authority of Ireland, which by then had been constituted from 1 October 2009, that it had the transmission arrangements in position which would enable it to proceed to the development of the multiplexes. In those circumstances the authority took the decision to withdraw the invitation from One Vision, which cited in particular the difficulties it had in its negotiations with RTENL.
I do not propose to enter that arena other than to say that the authority found itself in a difficult position because the statute permits the authority to engage with the consortium to whom it had awarded the contract in principle to develop digital terrestrial television. On the other hand, it does not give the authority any formal opportunity to engage with a potential transmission provider. In this instance it was and probably could only realistically be RTENL. That meant that the triangle between the authority, the putative contractor and RTENL could never be closed. That is an issue that merits some reflection in terms of any future approaches to such competitions and in any future review of statutory provisions. It meant that there was no formal engagement. I hesitate to use the word "leverage" but if I can use it in a modified way, there was no formal docking mechanism between the authority and RTENL. The authority believed that was a weakness or at least it was regrettable and in lieu of that we attempted to introduce a mediation process but that was not agreeable to all parties. I make that point simply to note it in passing.
In the event, the authority withdrew the offer from One Vision and invited the third qualified consortium, Easy TV, to talks, but it decided it did not wish to engage with the process at that stage. Consequently, as far as the authority is concerned it has discharged its statutory obligation. It is reviewing the experiences of all those who reached the qualification stage and their view on the potential for commercial DTT in the current environment. It will be in continuing contact with the Minister, the Department and other interested parties in that respect. Given that we are where we are the authority has identified a number of key priorities that it sees as essential. The first of these is that there would be security of transmission in a DTT context for the domestic channels. The second is that there would be security of access to the domestic services and such other Irish channels as may develop for households which have the capacity to currently enjoy them. The third is that at a minimum there would be no diminution in the range of services currently available to households.
Two other issues arise that are important and in which the authority will take an interest. One is the cost of transmission, especially in the simulcast phase between October of this year and the end of 2012 when analogue switch-off will take place, for TV3 and TG4 in particular, because they are in a qualitatively different position from the RTE channels given the nature of their relationship between the transmission network and RTE the broadcaster. The second of those issues is the cost of access to digital terrestrial television for households. It is clear that it has been, if not an article of faith, a clear priority of public policy that there would be a transition to digital. It is as Mr. Conor Hayes has said a European standard, in effect, a requirement. The Broadcasting Authority of Ireland shares that view. It also shares the view that, in the interests of securing the most effective range of services, protecting the possibility of developing the competitive provision of services and ensuring the opportunity for the emergence of new providers of services in a digital environment, the capacity for the provision of commercial DTT multiplexes ought to be retained, including in terms of bandwidth, and that decisions on the transmission arrangements for the public service multiplex should not operate to an enduring disadvantage, either in terms of significant delay or extra cost.
There are strong arguments that the transition should take place at the time identified, namely, at the end of 2012. It is clearly a matter of public policy and is not without a challenge to a range of interests. There are serious discussions to be held. Clarity and crispness of decision-making will be of the essence. The authority wants to be certain that the priorities I have identified will be reflected, that the relevant interests will be protected, that the prospect of choice will be preserved and that the opportunity to return to a competitive process to identify a commercial operator will be constantly available, notwithstanding the priority embedded in SI 85 in terms of the public service multiplex. The authority will have discussions with all concerned in this regard. There is no point in returning to the marketplace if no one is expressing an interest. It would not be to anybody's advantage, certainly not viewers or listeners. It would not be of advantage in the development of an additional range of multiplexes.
There is a need to consider the implications of a changing set of circumstances or pattern of transmission arrangements, as has been proposed, for the operation of the current tariff model. It may be necessary to consider whether it is desirable, appropriate or imperative to review it.
Even within the context of the operation of an exclusively public service multiplex of the kind envisaged within SI 85, one must consider and grasp, if appropriate, the opportunity to allow for the plurality and diversity of service providers. This is a matter the authority will have to consider further. There may be a need for discussions between the Department, the authority, RTE-RTENL and perhaps ComReg. These are issues for another day.
The emergence of digital broadcasting is strategically important for Ireland. It is important, in the view of the BAI, for the development of broadcasting and broadcasting policy. The analogue switch-off will be a reality and clarity on the issue will be an important determinant. Whatever decisions are taken need to be such as not to make more difficult the development of a more diverse, pluralist provision of services. Every opportunity must be availed of to ensure existing services and audiences will not be disadvantaged and the opportunity to allow for the emergence of new, competitive offerings and choices for audiences will not be lost in the process.
I will be happy to answer questions. My colleagues will answer some, if necessary.
I thank Mr. Collins for his presentation. The circumstances are very disappointing and we are all concerned about our position. At least some of the uncertainty is being removed. Many of us have been asking parliamentary questions on DTT but not getting very far.
I have a couple of questions. DTT offers an opportunity for Ireland. The concept of releasing spectrum and space for digital services is positive. While we are not in circumstances of our choosing, it is not just a question of the European Union simply forcing us to do something. While I acknowledge this is not what Mr. Collins is saying, it is important to see our circumstances in the context I describe. There are opportunities available.
My mind was wandering ever so slightly when Mr. Collins referred to the difficulties associated with the docking mechanism. I apologise for this. What can be done to solve the problems? I do not refer to addressing the problems of the past but to learning lessons. Will Mr. Collins comment on this?
We all share a commitment and central purpose in ensuring public service broadcasting is available free to air. I was very struck by the statistics. Reports suggest Sky, for example, is taking approximately €500 million out of the country. This must be taken extremely seriously, as it creates difficulties.
With regard to the RTE proposal, Mr. Collins has set out certain criteria, including in respect of the security of service transmission and costs. Is the BAI stating RTE's plan has its full support? Is it the way forward? I am not clear from what Mr. Collins is saying that this is the case or whether he has concerns.
I would like details on the cost of the proposal because it entails significant investment. In the past we had some concerns about the situation in RTE. I am sure Mr. Hayes is very much an expert on the issue at this stage. He has been through a lot. A parallel system, involving DTT and satellite options, is being proposed. Will Mr. Collins advise us on the cost implications? The satellite option is a new factor. We need to consider the point made by Mr. Collins on the cost to TV3 and TG4. I understand analogue services and the development of DTT will run in parallel and that this will result in costs.
I seek clarification on satellite system provision. I believed Mr. Collins was saying such a system would be available as a backup in emergencies, but it appears it is to be used to reach the viewers who would not have a service otherwise. It is somewhat similar to broadband provision in that there will be satellite system provision for the small percentage of people who cannot obtain broadband by any other means. I am not clear on the two purposes of the measure in question.
With regard to the estimated take-up, we need to know what the cost of a box will be. For how many of the 1 million people mentioned would this provision be suitable if the cost was reasonable? What is the estimated take-up figure of the offer by customers?
I have a very simple question that I wish Mr. Collins would answer today. I do not have a sense that there is a project that is being managed. When we want to call, whom should we call? It has been a criticism for some time. I know the difficulties leading up to it but, while we now know we have to proceed and there is a project in hand, it is not clear who is running it. As I said, that is not a criticism of anyone but I am just stating it needs to be in place. There needs to be some kind of forum or chief executive officer to ensure that what will affect 1 million people and possibly more, in a good way I hope, can be driven in a way in which people have confidence.
I am not a technical person in any way — that can be taken as a given. However, the impression I get is that digital radio has not caught on, even though the infrastructure is quite elaborate. As far as I can gather, the reason the infrastructure is not fully used is that it can create overspill and, as a consequence of it not being fully used, there are parts of the country where digital radio does not apply. I am concerned about the technicalities of this matter, so a similar situation does not arise.
The other question is in regard to the choice of channels. I can see that efforts are being made to try to make it as attractive as possible. Two provisions in the legislation are not mentioned, the Irish film channel and the Oireachtas channel. I quite like the idea of an Oireachtas channel but my understanding is that perhaps it does not make sense and cannot be justified in terms of viewership. The witnesses might comment on that.
There was a particular issue in regard to Mount Leinster. While this may not be the correct time to raise this, it affects counties Wexford and Wicklow and is an issue in the area around Mount Leinster where houses with Welsh aerials are unable to receive anything on channel 45. Perhaps I will raise this issue later as it is quite specific, but it is something that has been raised several times with me. It is the kind of issue I cite as an example. We need to have a clear line of command in terms of how this project is developing. Naturally enough, people will have queries and concerns and we will need to be able to direct them a certain way so they can, as I said, trust the process. It is not the one of our choosing but it is the one we have got, and we have to proceed on that basis. I wish the delegation luck.
I welcome the Broadcasting Authority of Ireland and RTE and thank them for coming in to brief us on their proposals. We may have lost one Coveney from the committee but I am glad he has a replacement on the other side of the fence, so I extend a special welcome to him.
Mr. Rory Coveney
Nothing changes.
It is only for today.
When we were first told about the switchover from analogue to DTT, it was launched with great fanfare and we were told especially about the commercial aspect whereby people could look forward with confidence to a choice of anything up to 40 channels. From the presentation, I seem to detect that the maximum we can now look forward to is nine channels. Mr. Collins says it is an accident of history that we do not have Easy TV, Boxer or One Vision. Is the way this switchover has been handled a disaster? It seems there is something very strange about the whole situation. When we hear Mr. Hayes using terms such as "we are working against the clock", it seems we are almost in a panic situation. I would like Mr. Collins to expound on why he thinks it is only an accident of history that these companies are not involved. Other issues spring to mind. In the conditions laid down by the BAI, perhaps it expected too much of the companies or was too demanding.
It is simply not good enough that this has happened given the amount of time wasted since negotiating with Boxer. We tabled questions to the Minister and were assured at various stages, including at Question Time, that everything was proceeding according to plan. Suddenly, this proposal finds itself without a commercial backer, which has a major effect on the service. Will Mr. Collins explain the exact number of channels that will be available? Is this the specific reason we will not have the originally proposed 30 to 40 channels, or will we have those channels?
I want to hear more on the statement that it will cause disruption to more than 1 million people. What level of disruption are we talking about and for how long can we expect this disruption to last? Mr. Collins stated he was concerned about the cost of transmission, especially for TV3 and TG4. Can he give members some idea of his concerns and what he believes those costs will amount to? Will he explain in simple language the average cost facing a household in the changeover from analogue to DTT? Mr. Collins referred to his concern that there would be a review of the tariff model. What type of review is this and to what extent will it apply?
We have received a categoric assurance here today that the changeover is going ahead as planned and on time, irrespective of the problems that exist. The main problems causing concern to people are the cost, the number of channels and the disruption to service. Mr. Collins suggested 90% coverage is available across the country but 2% is missing. What is the future for that 2%? RTE has said it can service these people through the satellite system. I would like to hear from the BAI as to its concerns regarding the people the service is not able to reach.
I do not want to go over ground that has already been covered. One of the issues I have always felt is vital in the development of DTT is the ancillary service. I am glad Mr. Hayes has touched on this in regard to broadband. Are those figures factored into what is happening for October 2010 so that we ensure this once-off opportunity is taken to provide broadband?
Considering the area of coverage, it was suggested that analogue is the primary source of reception in 50% of the area, for example, in certain areas such as the western corridor. This is the opportunity to provide broadband on this occasion to 95% of the population, which I assume will happen via those 28 sites. If there is a cost, that cost will have to met. This is infrastructure and it is as important as motorways, railway tracks or Terminal 2, so the cost should be met.
My colleague touched upon what I sense as nothing short of dissatisfaction from Mr. Collins about how we have got here in terms of the structures in regard to commercial entities, the public service providers and possibly the Broadcasting Authority of Ireland. Mr. Collins used the phrase "no docking mechanism". I get the impression there was not even a dock let alone a docking mechanism. Mr. Collins might expand on this.
I need clarification from the BAI on one other issue which I believe is its responsibility. What contact has the authority had with the industry, by which I mean the people who will erect aerials and those who will be going into households? When people buy a box, I assume they will need an aerial. I spoke to a person whose job it has been for a long time to erect aerials of the type one sees throughout the country. He knows as much about this as he does about rocket science because there is a complete information blackout on the part of the Broadcasting Authority of Ireland, RTE, One Vision, Boxer or whoever, and the people who put up the aforementioned aerials know nothing about what is going on. If this is the case, the BAI's level of communication with the industry has not been acceptable and I seek the reason for this.
I welcome all the witnesses and will be brief. Although I am not into technology in a big way, if I understand this correctly, the stopping of analogue transmission, which is one system, will result in its replacement by two systems, namely, DTT and satellite. The advantage of using the latter is to cover the 2% to 3% who will not be covered by DTT. Why not simply use the single system of satellite transmission to provide 100% coverage? Why must one go down the DTT route? Second, I refer to a question that has been asked by other members. Ultimately, the public is interested in cost and the witnesses should outline exactly what will be the cost to the public. Will they be obliged to get new television sets or new boxes and will they be obliged to accept an increase in the licence fee? Third, Mr. Conor Hayes noted that were satellite transmission to be used, it would provide cover to 100 million viewers rather than providing dedicated coverage to Ireland. Is there an additional cost involved and, if so, what is the reason?
Before reverting to the witnesses, I note that Mr. Collins outlined difficulties with the commercial operators and their relationship with either the Broadcasting Authority of Ireland, BAI, or RTE regarding the provision of a DTT service. What is the relationship between the BAI and RTE with regard to this problem? In the past Mr. Hayes has outlined to the joint committee in great detail the commercial reality of the finances of RTE. He might remind members of the impact on RTE of its obligation to roll out DTT, especially now as none of the commercial operators intends to take up its particular piece of the cake. As the national broadcaster clearly has gone to great expense to roll this out, Mr. Hayes should elaborate a little on this particular aspect. Mr. Collins suggested that this might indicate a legislative shortcoming and that he would have welcomed the inclusion in previous legislation of a provision on how to deal with the unfortunate situation that has come to pass. How does he perceive this particular impasse panning out? What person or organisation does he identify as the appropriate entity to sort out this matter? I ask Mr. Hayes to respond first.
Mr. Conor Hayes
I will respond first to Deputy McManus who asked a question regarding cost, and perhaps I should deal with the overall cost of the project. RTE has discussed DTT at previous appearances before the joint committee. Since 2005, it has been envisaged that DTT and its infrastructure would consist of six-multiplex integrated pay TV and a public service MUX platform. That was the vision.
Mr. Hayes should explain the word "multiplex".
Mr. Conor Hayes
A multiplex is a slice of spectrum.
It is a what?
Mr. Conor Hayes
When one moves from an analogue technology to a spectrum of radio waves——
It pertains to a spectrum of waves.
Mr. Conor Hayes
Basically, there are naturally occurring radio waves and with analogue technology, one can view the transmission as a boat that rides on top of the wave. However, digital transmission uses the wave more efficiently and consequently one can squeeze a lot more onto it. I look on it as the equivalent of a canoe down the Shannon versus a large ship on the ocean. One simply is able to cram much more capacity into the manner that one uses the wave. In digital technologies, multiplexing means to combine and so one takes various streams and combines them together and therefore one is able to use the wave in a different way. I apologise for not explaining this.
That is fine.
Mr. Conor Hayes
We are operating in an environment in which all this must be co-ordinated internationally under what is called the regional radiocommunications conference, RRC, as spectrum is part of an international convention administered by the International Telecommunications Union. Ireland has gone through all those organisations as the Department has been leading this for quite a long time. When one designs a particular network, it must be designed around a certain number of sites. Consequently, we designed our network around a core of 13 sites, with a considerable number of ancillary sites that go on top of it. This was done at a time when we thought there would be a six-multiplex commercial and public service MUX system. Our proposition always has been that it does not make sense for Ireland to start to build networks everywhere but that we should try to use the resources we have by trying to squeeze as much as possible through them. Therefore, RTE Transmission Network Limited, RTENL, always took the view that had it the funding and capability, it would be willing to try to construct the infrastructure that would enable the digital television system to be put in place.
One is not simply replacing analogue transmission but actually putting in place something that is much better because it has wider capacity. If one thinks about it, at present there are four channels, namely, RTE 1, RTE 2, TV3 and TG4. This service could have been replaced by six public service multiplexes with a probable capacity of 40 to 45 standard definition television channels. In addition, a further two multiplexes of capacity were to be released by what is called DVB-H, which pertains to digital video hand-held technologies. This is quite a lot of spectrum and were it all to go to television, it would make available 60 or 70 channels where previously there were only four. This gives some idea of the importance of the fact that the spectrum is being used for other purposes, such as the digital dividend and so on. As a country, it is very important for us to try to use our natural resources, which include spectrum, as efficiently as possible.
That was the thought process and, as an organisation, RTE decided to try to use its existing sites and to offer this infrastructure to people. Originally, when we first considered this matter in 2005, we submitted a proposal to the Department to the effect that RTE would construct the whole thing and thereafter would contract or sell off that unit later. At the time, we estimated that it would cost approximately €150 million to do that. This was not accepted and legislation was produced in 2007 that placed an obligation on RTE to roll out a public service MUX and which placed an obligation on the BAI to hold a competition to generate a further three commercial multiplexes. We always have likened that to asking us to build one lane of the M50, while asking the BAI to find someone else to build the other three lanes. There is a significant co-ordination that poses a challenge to everyone when one tries to approach it in that manner. This was the context for the competition that took place. Prior to that competition, we carried out a detailed costing and came up with a projected cost to build this infrastructure of €120 million. As RTE does not have that kind of cash lying around, obviously the issue would always arise whereby we would be obliged to borrow moneys. As we designed the project and got into greater detail about it in respect of procurement and many other matters, we have been squeezing down the cost and have got to a cost of approximately €111 million.
Separately, we developed what was called a tariff model because we always had the view that it would be necessary to charge other customers using this infrastructure in a fair and transparent fashion. Moreover, that probably would be the law anyway as there was a strong possibility that such pricing would become regulated. In such a scenario, RTE would be charging itself in exactly the same manner as it would charge all its customers. Consequently, we invited a group of regulatory experts, including economists, lawyers and whatever, mainly from the United Kingdom, to put this RTE tariff model together for us. In advance of the competition, we provided that tariff model to the BAI in order that it knew the costs. We also provided it to ComReg and to each participant in the competition. Consequently, any entity that participated in the competition run by the BAI knew in advance exactly what would be the cost, how the mechanism would work, how the invoicing and the charging would work and so on. Everyone was on the same page.
Subsequently, the process did not work. Approximately one year ago, we believed there would be delays and grew worried, given that we had started spending a considerable amount of money. By the end of June 2010, we had spent €40 million on putting infrastructure in place. We cannot afford to squander money of that kind. Nor was it squandered, but we delayed and re-organised the way we were doing the project to provide time for a successful applicant to emerge from the Broadcasting Authority of Ireland, BAI, process. Unfortunately, none did. If we were to meet analogue switch-off by 2012, we needed to give the go ahead to certain physical decisions in June of this year irrespective of whether there was a commercial multiplex, MUX, operator. When the process did not succeed, we went back to the drawing board and quickly drafted a two-MUX public service digital terrestrial television, DTT, proposal.
In recent months, we have also been developing the satellite option. This is not only an answer for the 2%, but also for a situation in which the service to the 98% collapses for some catastrophic reason. We were asked why we did not pursue the satellite option from the beginning. I proposed the same solution in 2002, but it did not find favour because the technology did not exist to implement it in the same way. The satellite option now would require 1.6 million homes to put satellite dishes on their roofs, so the consumer's cost would be far greater than it would under DTT. Some 50% of houses will need nothing more than a set-top box, not even a rooftop aerial. It is a clean and neat technology that can cover many people.
Will the 2% or 3% of households not covered by the DTT be required to erect satellite dishes?
Mr. Conor Hayes
Currently, 2% of households cannot get terrestrial television. They could be in the same position in January 2013 as they were in December 2012. If they would like public service television, for the first time we will be in a position to offer it to them, but it would be via the satellite option. This is the best we can do, given the economic issue that arises.
What will that provision cost RTE?
Mr. Conor Hayes
A limited amount, which is detailed in the document we have supplied the committee. It will cost us approximately €1.5 million per year. We can manage it. As other channels come on board, part of the cost will be defrayed. In light of the security this option provides and the ability to supply to the 2% of the population who do not currently receive public service television, the cost can be adequately justified. We might have a different take on the situation were the cost €20 million or €25 million, but the actual amount is appropriate and reasonable.
Mr. Hayes mentioned how it would be useful in an emergency situation. If people will not have satellite dishes, what usefulness will it have?
Mr. Conor Hayes
It gives us an option to provide a service. There could be a catastrophic failure of the network for all sorts of reason. For example, no one anticipated the Icelandic volcano. I ran an airline and understand the matter. I contemplated such developments, but it never occurred to me in my wildest dreams that the entire air industry would be grounded by a volcano. Strange events have occurred in the past two years. No one believed Lehman Brothers would collapse. Events of the past two years have made everyone question the things we have taken for granted for a long time. RTE has been lucky; for 40 years, we never had a backup. We now have one.
What will happen if RTE collapses?
Mr. Conor Hayes
That will not happen.
On the cost, is Mr. Hayes stating that the provision of the service via satellite will cost €2.5 million?
Mr. Conor Hayes
No. It will cost RTE €1.5 million.
Per annum.
Mr. Conor Hayes
Yes. The past year has seen extraordinary weather circumstances and there were more weather disruptions last winter than there were in the previous ten or 15 years. In such circumstances, something could be out for two, three or four months. With the satellite option, one would have another way to try to meet people's needs. It might not be a perfect way, but it is a way.
Forgive my ignorance, but is the service provided by satellite as good as the service provided by DTT?
Mr. Conor Hayes
I am biased, as I have been trying out different technologies at home. I have a high definition television on which I watched some of the BBC's coverage of the World Cup, although I turned down the volume. I swapped between it and our test DTT service and the quality of the RTE picture on DTT was better than the BBC's high definition picture. The satellite picture will be good, but it will be better on DTT.
How much will the DTT option cost? RTE has chosen to use two multiplexes.
Mr. Conor Hayes
We revised all our proposals and arrived at a total cost of €70 million. When we negotiated with the commercial operators, the cost would have been €111 million, of which we would have needed to borrow €75 million.
That was for the provision of six multiplexes, but €70 million will provide two.
Mr. Conor Hayes
Instead of spending €111 million, we will spend €70 million, a reduction of €41 million. It also means——
That includes the €40 million.
Mr. Conor Hayes
Yes. We have spent €40 million already and will spend a further €30 million. We committed €40 million up to the end of June, paid €32 million, €3 million has been invoiced and a further €3 million is in invoices not yet received. In cash terms, we have another €37 million to pay. We are negotiating a loan of €30 million to €35 million with our lenders. Previously, our difficulty with the commercial operators was that they never seemed to grasp the concept that we needed to borrow the €40 million or €45 million we were spending, seeing as how we do not print money. If we must borrow money for them, they must pay commercial terms for it. This is not rocket science.
Is it correct that the €111 million was for six MUX platforms and the €70 million is for six platforms?
Mr. Conor Hayes
Yes, as one must erect a common infrastructure irrespective of what occurs.
Does the €70 million include a calculation on the utilisation of broadband?
Mr. Conor Hayes
No. DTT will not be able to provide broadband per se. We always argued with the commercial operators, such as the One Vision consortium, which included Eircom, that DTT allowed a triple play option. For example, the operator could go to my mother in Mitchelstown and provide her with telephone and broadband via landline, stick in a DTT box for television services and provide triple play on the one bill. This would have allowed commercial operators to compete with the satellite operators or UPC in Dublin.
Our satellite option would operate on the Ka band as opposed to the Ka band. The Ka band is typically used for telecommunications purposes or contributions between broadcasters. The Ka band is used by the single largest pay television operator in the US, DirecTV, which uses it to deliver high definition television. It works on a consumer basis and is a proven product in weather conditions.
People are offering satellite services over broadband. If one has a broadband service over satellite, one is capable of offering telephony or voice over IP, VoIP. If we are up there in the clear, some bright spark might offer people broadband, telephony and Irish channels — RTE, TG4, TV3 and so on — without their needing to spend much money.
We are getting a much scaled down version of what was originally promised, namely, two multiplexes instead of six. What are the consequences? Are we actually discussing an upgrade of the current system?
Mr. Conor Hayes
We are focused on analogue switch-off. It must occur on 31 December 2012. We are all getting geared up towards it. I have laid out for the committee the content for the first public service MUX. This is our proposal to the Minister, but he has not made his decision. It is not ours to take and all we can do is make a proposal. For example, Deputy McManus referred to the film channel. We support the idea and wrote to the Irish Film Board, but it does not have detailed proposals ready. Were I to promote the idea, the board would need to be ready by October. It will not happen in that time, but this is not to say there will be no film channel or space for it created over time. There are two public service MUXs and we have only made a proposal for the first. The film channel is certainly not dead and gone, it is a positive idea. We wrote to the Clerk of the Dáil about the Oireachtas channel but there is no detailed proposal on who will pay for it. We are not against it but we recommend the Oireachtas and film channels be considered for the second public service MUX. There are alternatives to have streams within this. The news channel on the web breaks over and we feed in coverage from committees and other sources. We are starting to develop this and increasing investment in the web-based products. When I became involved in RTE publishing we had 1 million hits per month. We now have 90 million hits per month and this is becoming another way of looking at this. There may be cost-effective solutions for Oireachtas television that will merge with this. We totally support it but our focus is to have a bunch of channels for the first public services MUX so that we can organise this.
Set-top boxes are a major issue. If one wants to use DTT, one must either have an ITD television, which is one of the newer, integrated digital televisions that many people bought for the World Cup, or one must have a set-top box. A major objective for us is to work with the BAI, ComReg and the Department to reduce the cost of set-top boxes. We have put an enormous amount of work into this but we have not seen all the work at this point. Much work must take place in the next six to nine months. RTE has appointed a new head of digital television, Ms Mary Curtis, who is a senior manager in the company. She was deputy head of programmes in television and understands television and audiences and what people like. She will act as the co-ordinator at the front of house.
Mr. Hayes is talking about October 2010.
Mr. Conor Hayes
October 2010 is the switch-on from a technical basis. The date for the public national launch must be decided by the Minister but we recommend the second quarter of next year.
What will be the cost to the average citizen?
Mr. Conor Hayes
There will be no cost for many people because they will not use it. At this moment some 22% of households in the country rely on the system and 78% do not, although one third of televisions rely on this as their primary source. Most people will have to get a set-top box and our estimate for the maximum price of a set-top box is €100. In Italy, one can get set-top boxes for just over €20 so we hope to drive down the figure in Ireland. It is possible to drive it down and there must be an organised campaign to do so. Much work remains to be done by the BAI, ComReg, the Department and RTE. We have collaborated through a series of meetings and the Minister has been pushing it hard. Over several months we will see an output on this side.
We estimate 10,000 out of 1.6 million households have VHF aerials that must be replaced and cannot be used. Those in the UHF bands can be reoriented and another 7,500 people with UHF aerials must be reoriented.
Regarding the point on reception, we have the list of 450,000 retailers and installers around the country. We are in constant communication with them. We receive reception queries from Oireachtas Members weekly and from installers and retailers daily. We are designing a set of videos to help people to install correctly, to orient the aerials correctly and to know what cable connections to use. This training must take place and separately, there will be a public information campaign to be delivered.
Will Mr. Hayes consider going to Italy to buy the set-top boxes for €20 and bringing them to Ireland?
Mr. Conor Hayes
No, because they are MPEG2 boxes and we are on MPEG4. It would take some time to get there.
On that point, who is the project manager? The idea that everyone must sit in a room and meet and then go away does not sound like the way to manage the project. There must be a clear structure so that a question about DTT can be put to a certain person. Do I ask the Minister, the BAI or RTE?
Mr. Conor Hayes
It depends on the question.
That is not the right answer and that response pinpoints the problem.
Mr. Conor Hayes
With respect, it does not.
Maybe I can explain my point, Mr. Hayes. I refer to customers, public representatives, aerial installers and local communities. All of these groups must be able to pinpoint how to get information on DTT and what will happen relatively quickly in a way that is manageable for the public. Saying it all depends on the question is the kind of comment that drives people absolutely crazy. I may telephone RTE and be told it is the responsibility of the BAI, who will tell me it is the Minister's responsibility. That is exactly the problem. When I want to phone about DTT, who do I call?
That is the point I made earlier. There is a black hole with regard to information on this matter.
Mr. Conor Hayes
One must be fair to all the people involved. Until May of this year, we had six MUXs, including integrated, digital television, pay and PSV MUX platforms. Everyone operated according to the legislation. The BAI process did not work and we found ourselves without it in May. We had anticipated this and we have made proposals to the Minister, which are now under consideration. I am conscious that he is giving full consideration to the issues referred to by Deputy McManus. She will have a very formal response with formal structures within a matter of months. At this moment, if one has a question for the technical sides, the people dealing with it could be RTNL or the BAI because we are in the pre-planning phase. There is no point in setting up information campaigns for installers because we cannot give them definitive information until we know the deadlines. Some serious work has been undertaken in the Department, in the BAI, in ComReg and in RTE. One needs a certain level of co-ordination because there are four agencies involved. I am not opposed to the notion that Deputy McManus suggests but it is not fair to expect it to be in place at this point. It will have to be in place shortly.
Sweetness and light will reign between the groups.
People are under the impression that they will be able to receive every channel because there are two multiplexes. What channels will be available under the proposals outlined by Mr. Hayes? Will these be the eight or nine channels listed here? Will the UK channels be available?
Mr. Conor Hayes
The UK channels are available under an approach called Freesat, which is broadcast by a company owned by the BBC and ITV. They broadcast these channels in the clear over Ireland using a wide-band satellite operating in the KU band. RTE's satellite option is a narrow-band satellite operating in the Ka band. One cannot get them on the same satellite. In the US, there are hybrid dishes available and householders can receive Ka band and Ku band signals. That is technically feasible and there are some 22 million households in the US using it. The cost of the dish is approximately $65.
Deputy D'Arcy will have to go to Italy and I will have to go to the US.
Mr. Conor Hayes
We are doing our best to identify solutions.
Will people have to get a box for Sky and a box for the UK channels? These are not readily available. People are under the impression they can do this once they switch over.
Mr. Conor Hayes
If people want to stay with Sky and keep paying money, one does not need anything else. The alternative we are providing does not involve pay-TV.
The Deputy's question is whether one can get BBC and ITV.
Mr. Conor Hayes
If one has a satellite.
What about the new regime?
Mr. Conor Hayes
We have no plans, but Mr. Collins will discuss the matter. Under the previous system and if there was pay television, UK channels would be delivered to——
One is commercial.
Mr. Conor Hayes
Yes, but on a free basis——
It is not available now.
Mr. Conor Hayes
No.
According to Mr. Hayes, a system in the US could be——
Mr. Conor Hayes
If one was on holidays in Florida, one could buy a dish and bring it back with no problems. I am sure some innovative installers and other people will see the opportunity.
They will get dishes on the black economy.
We will allow Mr. Hayes to continue answering questions.
Mr. Conor Hayes
I am somewhat lost. I do not know whether I have answered everything.
Mr. Hayes has been distracted.
He is on the wrong multiplex.
Mr. Conor Hayes
We are not making a comment on the previous process. Mr. Collins will discuss that issue. RTE is designing a serious information campaign and will provide retailers and installers with extensive training. We were asked why we cannot simply use a satellite. I have answered the Chairman's question on costs. As far as I know, I have covered every topic. If I have not answered every question, members should ask again.
I invite Mr. Collins to answer some of the questions.
Mr. Bob Collins
I will take them in the order they were asked, beginning with Deputy McManus's questions. The development of digital terrestrial television, DTT, is a good move and the genuine opportunities it presents are the reason it has been a clear priority for 12 years. It allows a wider range of services, is modern, delivers a digital dividend and the space being used can also be used for other purposes, which will be of benefit to the State. This has been the constant position adopted by public policy and everyone engaged in broadcasting. The opportunities digital presents comprise one of its virtues.
This is not the first time the State has engaged in a change of transmission mode. In radio, the move from medium wave to VHF receivers was significant, but it was accomplished effectively. In television, the change from 405 to 625 transmission evoked many of these issues. In some areas, the change from VHF to UHF transmission required new aerials and so on. In some respects, this change is more radical because of its consequences and potential. As indicated by Mr. Hayes, however, it has a narrower focus, since it will only affect those who are dependent on the current transmission system.
It is too early to engage with the public, although that will need to occur soon. When it does, a one-stop-shop will be required to provide a clear point of information for the resolution of any DTT-related issue. This will be the responsibility of everyone engaged in the process.
When I mentioned a docking mechanism in the context of the recent competition for the commercial DTT multiplexes and given what might be desirable in any future such arrangement, I meant that the Broadcasting Authority of Ireland, BAI, which was in a position to run a competition and award a contract for commercial multiplexes, would have had a formal statutory relationship with the entity, be it Boxer, One Vision or so on. That entity dealt with the transmission authority, RTENL, but the BAI has no formal link with the authority. Therefore, the BAI was not entitled to ask both parties to engage in discussions and reach a conclusion. I do not want to be misunderstood, as RTE openly provided the BAI with information on its position, but it would be desirable if some entity, be it the BAI or something else, engaged with the two parties likely to be involved in the transmission contract so that the range of services could be provided. That this ability was not available was a weakness and would be a strength were it included in any future process. This is what I meant by a docking mechanism, an issue raised by Deputy D'Arcy. There is no sanction.
Deputy McManus asked whether the RTE plan had the full support of the BAI. It does in principle. RTE was placed in a difficult position, in that it needed to abide by the requirements of the statutory instrument where the provision of public service multiplexes was concerned. Identification of the narrow-band satellite service is an ingenious and innovative way of dealing with households not covered by a DTT transmission system.
Throughout the debate on this issue during the past eight or ten years, a key underlying point of public policy has been that the State should have an Irish-owned transmission system to carry the four national channels, one that would not be dependent on external economic circumstances or an external force. Hence the necessity of a domestic transmission system. The satellite option does everything mentioned by Mr. Hayes, namely, extending coverage and providing a back-up, but one could not dispense with DTT by virtue of the availability of satellite because, in the last analysis, the satellite option is not within the control of the State.
For the BAI, the issue is that the dramatic change in the configuration of the transmission arrangements proposed for DTT compared with those contemplated previously alter substantially the context within which DTT will emerge and commercial DTT can be brought into existence. A second concern is that taking the system back to the drawing board, as Mr. Hayes stated, will have an impact on the application of the tariff model in future, although there are no questions about the application of the tariff model used in the recent application process. The BAI and the applicants were aware of that model, although the latter were not aware of other elements at the time of their applications. However, this is a separate issue.
I used the term "accident of history". I did not mean that the commercial applicants could not develop the system, but that the award by the then Broadcasting Commission of Ireland, BCI, of a contract in July 2008 coincided almost precisely with the economic downturn and everything that was occurring in the US and Ireland. This significantly altered the environment in which people were contemplating the development of commercial DTT and is the "accident of history". The process whereby people engaged in attempting to develop commercial multiplexes in the State was partly influenced by economic circumstances and the inability of the applicants to reach satisfactory transmission arrangements with RTENL. We were not party to the negotiations for the reasons I mentioned and I do not propose to rehearse them, as I am not sure it would serve a useful purpose. It was, of course, a disappointment to everybody. The BAI was becoming increasingly impatient with the length of time involved in the process and when it came to the end, the third consortium invited by the BAI to state whether it still had an interest — the consortium that involved RTE — did not wish to take advantage of the invitation to take up the multiplex contract.
Characterising the transition from analogue to digital, that is, the switching off of analogue transmissions at the end of 2012, as being a disaster is a long way short of an accurate description. It will happen and it will be effective, although it presents a considerable challenge to everybody concerned. The real challenge is not to the BAI but, principally, RTE and RTENL, the transmission company within RTE, which must secure development within the timescales explained.
In the absence of the three commercial multiplexes, there will be fewer channels available until such time as they are developed because two is less than six. What if we reach a point at which commercial DTT is unlikely to be available? We should remember that in 2000 or 2001 — I cannot remember which — when the Department invited applications to operate commercial multiplexes, there were no applicants. At least on this occasion there were applications from three qualified consortiums which were all serious in their intent.
The issue of cost for TV3 and TG4 was mentioned. There is a qualitative difference between these and the two RTE television channels. Simultaneous transmissions which are, to a certain extent, test transmissions will take place until the switchover, encouraging people to become accustomed to DTT while the information campaign is proceeding. The cost, for no real return in terms of access to additional viewers, is a consideration, to which some attention will be given. The cost of access for households has been well covered in the responses to subsequent questions, as has the issue of broadband raised by Deputy D'Arcy.
There has been contact between the BAI and the industry, about which Mr. O'Keeffe or Mr. O'Brien might want to say something. It is not formally the role of the BAI, but there has been contact. This re-emphasises the need for a one-stop shop at some stage in the future.
The Chairman asked about difficulties in the relationship between the commercial operators and RTE. I have said as much as needs to be said in that regard. Others who were directly involved know a great deal more about it than me or the BAI. He also asked about the relationship between the BAI and RTE. It is professional, good and open. The chief executive of the authority and I have met the chairman and director general of RTE and participated jointly in a number of meetings convened by the Minister in the last five or six weeks. There is continuing contact between the BAI and RTE at executive level, as there always has been. This is a changing relationship because the BAI is now the regulator for all broadcasters, including RTE — this was not the case in the past — and TG4. It is an open, professional relationship. There will not always be absolute unanimity on every issue that arises; there will be the occasional moment of tension, perhaps, but I do not detect any at the moment. What more can I say?
It sounds very polite.
Mr. Bob Collins
It is not only polite; it is a good, warm, professional relationship.
Does that mean it is true?
Mr. Bob Collins
I know them. I know where their bodies have been buried also.
The issue of a shortcoming in the legislation was mentioned and I have touched on it. It would be desirable to have a mechanism under which some agency — perhaps the BAI, since it already has a relationship with any applicant or contractor — would be the locus of the dual link in order that the triangle could be closed. This would facilitate the conclusion of discussions.
Mr. O'Brien may want to say something about the level of contact with the industry.
Before Mr. O'Brien comes in, I would like to correct one thing Mr. Collins said. I did not say it was a disaster that the switchover would take place in 2012; what I was referring to was the way the proposal had been dealt with. Mr. Collins touched on this when he mentioned the mediation process. He expressed impatience on the part of the BAI and spoke about shortcomings in the legislation. Mr. Hayes has pointed out that a proposal was made when RTE could have dealt with it, but it was not acceptable. We went through this proposal and are now left with a situation in which RTE must pick up the pieces after the Minister's actions over a number of years. What we are getting, ultimately, is not what was proposed in glory some years ago but a much shorter version of what we were promised. It is as though one was looking forward to a prime pork roast for dinner but instead one is getting the pig's head on the plate. What we are getting falls far short of the original proposal. That is what I stated. I realise the benefits of DTT to the country and did not say that was a disaster. What I said was the way the proposal had been handled by the Department and, to some degree, the BAI had been a disaster.
Mr. Bob Collins
I will reply because I would not want that to sit on the record without a response as though it were gospel. I distance myself from those observations even more than the earlier ones. The issue of the emergence of commercial DTT is entirely different from that of the transition from analogue to digital. This is not part of the switchover process. It requires a switchover to make it happen, but it is a different process. Actually, pig's head was a staple of my diet as a child. As part of the process, a market arrangement is opened up, invitations are extended to companies to bid for commercial contracts and they bid. In this case, they either decided to withdraw or could not satisfy the authority that they had been able to make satisfactory arrangements for transmission. It is undesirable, but that is what happened. That was the marketplace making a statement, on one the hand, and two parties being unable to reach agreement, on the other. Without even being a tad defensive, I simply could not accept that this was as a disaster from the perspective of the BAI. It is undesirable.
The aspiration, since the opening of discussions on digital transmission, has been for DTT to offer the full range of services, but that has not been possible in the last ten years. It will not characterise the first phase. We want to be certain that the opportunity will be preserved for commercial services to develop; that is why we are going back to talk to the three parties which qualified on the last occasion to determine the circumstances that would bring them back into the marketplace if there were to be a new system. What are the conditions that need to change to make this possible? What needs to be different, for example, for Easy TV to change its mind about developing DTT? The notion that somehow RTE had to pick up the pieces is——
I am delighted Mr. Collins is rethinking the process.
I want to make a point about the structure. Nobody has covered himself or herself in glory. The truth is that RTE wanted to bring this forward a number of years ago. A number of years later, after negotiations between the BAI or the BCI or other previous incarnations, the Minister and the Departments involved, RTE is proceeding on its own.
It working against the clock.
It is. It seems the process is irrelevant and that the public service broadcaster is proceeding to do what it wanted to do in the first place in 2000 or 2001.
Mr. Bob Collins
No, not quite.
Mr. Conor Hayes
It is important that we try to focus on what will happen in 2012. Many things have happened, but we have a very serious task to complete. We have spent €40 million and will spend another €30 million. Many things need to happen. Somebody can examine the situation later, but our priority is to get all the agencies involved working together. In fairness, the Minister is doing his best to do this.
Yes, I think so. Equally, the delegates cannot choose to ignore the fact that this process started last May. However, I give them credit. Perhaps they will do a good job in providing two multiplexes. However, this process has been ongoing for years. Companies, agencies, commercial bodies and private enterprises were involved, yet the process collapsed. That is the long and the short of it.
Mr. Collins has explained the position. It was mainly due to the commercial and economic climate. I do not think he was trying to apportion blame to a particular process.
Clearly, the legislation was inadequate.
At the time commercial operators were interested, but they decided not to participate for commercial and business reasons.
It was proposed to have six multiplexes. The company concerned probably pitched it too high for a country with a small population of 4 million.
Mr. Bob Collins
RTE's starting position in 1999 and 2000 was the development of six multiplexes.
The number was too high.
Mr. Conor Hayes
In 2005 RTE submitted a detailed proposal to the Department for a six multiplex operation which would cover all channels. Our thought process was to avoid some of the issues to which Mr. Collins referred, including having too many parties involved whose activities one would have to co-ordinate. We would put the whole thing together, in other words, it would not be an RTE show but one would have everything covered. That was a pragmatic approach to adopt. However, when people considered it, they decided they did not want to go that way.
Mr. Neil O’Brien
In terms of the installers and set top box manufacturers, we have been engaged in ongoing dialogue with the Consumer Electronics Distributors Association, CEDA, which represents television manufacturers such as Sony, Panasonic and JVC. A specification has been available for some time in terms of how televisions will work in Ireland which was developed by the Department, RTENL and us. We kept the CEDA in the picture in the past few years regarding what was happening.
In terms of the installers, Mr. Hayes has mentioned that RTENL has an ongoing relationship with the 450 installers throughout the country. We have a proposal which has been tweaked. Transmission sites are being decided upon. When the Minister signs off on the matter and we have a project plan in place and everything is known, that will be the correct time to advise on the project because there will then be certainty about it. I support Mr. Hayes in the matter. When we have certainty on transmission sites, we may be able to identify some of the households which will be affected by aerial changes, etc., and advise the industry accordingly.
What effect will this have on the cost of a television licence?
Mr. Conor Hayes
It is to be hoped it will increase it enormously.
I thank the delegates for appearing before the committee. It is clear that both organisations are facing a very challenging, complex and, in RTE's case, expensive process in the switchover, about which we will hear more. I wish them well.