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JOINT COMMITTEE ON COMMUNICATIONS, MARINE AND NATURAL RESOURCES díospóireacht -
Wednesday, 24 Sep 2003

Vol. 1 No. 21

Broadcasting Commission of Ireland: Presentation.

I welcome Mr. Conor Maguire, chairman of the Broadcasting Commission of Ireland; Mr. Michael O'Keeffe, chief executive officer, BCI and Ms Celine Craig, secretary to the board. The format of the meeting will include a presentation to be followed by a question and answer session. The committee wrote to Mr. Maguire in relation to the items we wish to discuss, namely the role of the regulator, the views of the BCI on the proposed Broadcasting Authority of Ireland Bill, the corporate governance provisions of the BCI and the views of the commission on the report of the Oireachtas joint committee.

Before Mr. Maguire begins, I wish to draw the attention of everybody to the fact that members of this committee have absolute privilege but that same privilege does not apply to witnesses appearing before the committee. It is generally accepted that witnesses have qualified privilege, but the committee cannot guarantee any level of privilege to witnesses. Further, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House, or an official by name, or in such a way as to make him or her identifiable. I now invite Mr. Maguire to make his opening statement.

Mr. Conor Maguire

I thank the committee for inviting us and we welcome the opportunity to make a presentation to the committee. Although the Chairman has already introduced my colleagues, I will repeat the introductions for the sake of completeness. Mr. Michael O'Keeffe is our chief executive and Ms Celine Craig is our secretary and director of broadcasting. I wish to enter an important caveat at the outset: as the committee is aware, there are currently High Court proceedings in relation to some licences which have been the subject of challenge. Accordingly, we obviously cannot comment on the substance of those proceedings in so far as the issues remain alive in them. That said, it would be our hope to deal with any pertinent matters in a general way, without being involved in the specifics or substance of the matters still before the courts.

Our submission, copies of which have been circulated to the committee, is a rather long document as it contains a number of annexes. I hope our presentation today will not be quite as long. Before I deal with the written submission, I wish to give some flavour of the work of the commission of which I am chairman. There are ten members of the commission. A principal area of our work is the matter of licensing. In the life of this commission - I am now in my fifth year as chairman, coming towards the end of the term - we have re-advertised and re-licensed 19 commercial local radio stations.

There is also the matter of new commercial stations. Four new local commercial stations have been licensed in Dublin, one new station in Cork and one new regional commercial station. Aside from the commercial stations, there are also additional community radio licences, of which there are currently two, with a further six under consideration. Separately from that, there are AM licences - as opposed to FM licences - of which we have granted three. That is also separate from our responsibilities in respect of television licences.

As members will be aware, the remit has been broadened under the Act of 2001 and we have begun the process of looking at the whole television licensing scheme. Under that scheme, we are also charged with drawing up codes and have done considerable work in drawing up children's advertising codes. Other codes on which we are working will be referred to in the course of our presentation. Aside from all of that, we have an ongoing developmental role and a monitoring role in terms of looking at the licences which have been granted to see how the terms and conditions have been complied with throughout the licensed radio and television service. That is just a flavour of the type of work we do.

I now turn to our submission. I do not intend to read all of it, having regard to time constraints.

We will take the presentation for 15 minutes, to allow time for members to ask questions. The various policies of the commission can be expanded on in the course of replying to questions.

Mr. Maguire

I am very conscious of time constraints. However, the presentation may take somewhat longer than that because the committee has asked us to deal with specific questions in our written submission. While I do not intend to read it verbatim, it is necessary to go through each of the different areas in turn, a number of which have been set out in the request from the committee. We will try to be concise.

I may have to intervene. As a chairman in his own right, I am sure Mr. Maguire will understand the constraints to which I am subject. Possibly, the BCI may have to come back to another meeting with the committee.

Mr. Maguire

That may well be a way of dealing with the matter. If that happens, so be it. In the circumstances, I will try to curtail my remarks on the basis of the written submissions to a minimum. The introductory page sets out the basis on which we hope to address the committee. I will share the load somewhat with my colleagues. I will deal with the first matter, the views of the commission on its role as a regulator. Mr. O'Keeffe will deal with the views of the commission on the Broadcasting Authority of Ireland Bill; Ms Craig will deal with the corporate governance provisions and then Mr. O'Keeffe will deal with the Broadcasting Commission's radio licensing policy under the 1988 Act. Finally, I will deal with the views of the commission on the joint committee's research findings in its report on the radio licensing process.

Turning to the first of those matters, the views of the commission on its regulatory role, this is statutorily based, as members will be aware. There are two relevant Acts - those of 1988 and 2001. The functions of the 1988 Act can be broadly described as licensing, monitoring and development. The 2001 Act enhanced or enlarged the functions of the commission and also provides for additional roles in the development of standards for broadcasters and the provision of a secretariat function for the Broadcasting Commission. The licensing function is best described in section 4(1) of the 1988 Act which states: "It shall be the function of the commission to arrange for the provision of sound broadcasting services". That is elaborated on further in the 2001 Act which provides that we must endeavour to best serve the needs of the people of the island of Ireland bearing in mind their languages and traditions and their religious, ethical and cultural diversity.

To develop and implement this provision it is the commission's policy to aim to provide listener choice and diversity through the licensing of a range of radio and television services. Licensing policy in respect of radio will be dealt with later. While there is one national television service, we have new responsibilities which relate to additional television services provided via cable, MMDS and satellite systems. These responsibilities will be dealt with in due course. Monitoring is an important aspect of our work and includes the assessment of statutory and contractual programming obligations, ownership and control structures, financial and trading performance, human resources, management practices, studios and transmission facilities.

The next function is developmental and in that connection we have drawn up a number of things. We support, for instance, the "new adventures in broadcasting" scheme, the enhancement of Irish language broadcasting, the radio programming awards for practitioners in the Irish broadcasting industry and the community radio support scheme.

We are charged with the development of codes to address children's advertising, general advertising, sponsorship, access rules for the deaf, hard of hearing, blind and visually impaired as well as programme codes covering taste and decency, violence and sexual conduct and advertising and administrative regulations which apply to the private sector only. We have prioritised the introduction of the children's advertising code. We also have a function in regard to research and information which is set out in the document we have supplied. More detailed information in respect of everything I have mentioned is available in the annual review of the activities of the commission. We are satisfied that, in general, the commission is fulfilling its various roles and functions in accordance with the criteria set out in the 1988 and 2001 Acts. Mr. O'Keeffe will now discuss the views of BCI and the proposed broadcasting authority of Ireland.

Mr. Michael O’Keeffe

As the Bill has not yet been published, we are not in a position to comment very specifically as to its main components. Obviously, it is our hope to do so as time goes on. We are aware that the Bill will support the establishment of the broadcasting authority of Ireland which will become the single content regulator for all broadcasters. I will therefore focus on that aspect of the legislation.

We have argued consistently that a single content regulator should be established in respect of broadcasting content. All broadcasters, public, private and community, should come under the body's remit. There are three main arguments which support this position. Regulatory principles should be applied uniformly for public and private broadcasters. This argument is particularly compelling where the public broadcaster operates within a dual funding structure and where competition for advertising exists. Many of the existing regulations are equally applicable to all broadcasters such as advertising and programming codes and there is no compelling reason other matters such as impartiality of news and current affairs content and compliance with programming obligations should not be treated in the same manner. A third point concerns the general EU principle that there should be independent monitoring of public broadcasters by a body separate to public broadcasters themselves.

This has been addressed in a number of fora, including the forum on broadcasting which was established by the previous Minister, Deputy de Valera. The report of the forum agreed with the principle of the establishment of a single content regulator though it suggested the setting up of a new body to be called the BAI and outlined its reasons for doing so. The BCI's response was to substantially endorse and welcome the recommendations of the forum. We addressed the issue of the role of the BCI as a single content regulator as we felt that as a body we had built up significant regulatory expertise in the regulation of broadcasting over the years. We did not see that there would be any conflict in terms of our dealings with RTE and suggested that to address any issues the public broadcaster might have consultation with the relevant parties. These parties would include the Government, the broadcasters, the public and the regulators.

The next development was the Minister's announcement of the establishment of the single content regulator last December. He decided to proceed with the establishment of a new body, the BAI, but indicated that the BCI staff would form the nucleus of the new organisation. We welcomed this prudent and pragmatic approach to regulating the developing broadcasting sector. We have had a meeting with Department officials at which we spoke in general terms of the proposed new entity. We look forward to continuing dialogue with the Minister and his officials during 2004 at which time the passage of this legislation will take place.

Mr. Maguire

Ms Celine Craig will deal with the third part of the paper which covers the legislative provisions in respect of corporate governance.

Ms Celine Craig

I will address the manner in which corporate governance provisions have been applied by the BCI. The Radio and Television Act 1988 provides for the appointment of up to ten members of the commission and there is currently a board of ten persons, including the chairman. Board members are appointed by the Government for a period not to exceed five years. The Act requires that those appointed to the board should have experience of or show capacity in media, commercial affairs, radio communications, engineering, trade union affairs, administration or social, cultural, educational or community activities. The commission is required to hold as many meetings as may be necessary for the fulfilment of its duties. Typically, commission meetings are held on a monthly basis with an additional number of policy meetings usually numbering a minimum of two in each year. Commission members also attend public hearings in respect of licence applications. It is the practice of the commission to agree the dates of meetings in advance each year and to encourage maximum participation by board members.

The quorum provisions of the 1988 Act specify that the commission should regulate its meetings by agreeing rules on procedures and this is carried out by way of standing orders which are reviewed by each new board of the commission and amended when considered necessary or desirable. The quorum for a meeting is not less than five members and decisions are taken in accordance with statutory provisions by a majority of the votes of the members present and voting on the question. In the case of an equal division of votes, the chairman of the meeting has a second or casting vote. At all times, the commission fully complies with the quorum requirements of the legislation.

Declarations of interest are provided for in the 1988 Act and the Ethics in Public Office Acts. The 1988 Act requires any member of the commission who has an interest in any company or concern with which the commission proposes to make any contract or any interest in any contract which the commission proposes to make to disclose to the commission the fact of the interest and its nature and to take no part in any deliberation or decision of the commission in that regard. The commission has determined an interest for the purposes of the legislative provisions to mean a shareholding or directorship in a company with which the commission proposes to make a contract or a shareholding or directorship in a company which itself holds an interest in a company with which the BCI proposes to make a contract. The members are also subject to provisions in relation to declarations of interest made in the Ethics in Public Office Acts 1995 and 2001. They are designated directors for the purposes of the legislation. Members are reminded each year of their obligations to file the relevant statutory returns. The chief executive officer of the board is also designated a director for the purposes of the Acts and must also comply with the legislation in this regard although he does not participate in the decision-making process for licence applications.

At each stage in the decision-making process in respect of licensing, the requirement of the Act in respect of the declarations of interest is applied. It is the practice of the commission that the chairman reminds members of their duty in this regard before each discussion and decision in each licensing process. This applies not only when a licence has been awarded in principle and prior to contract negotiations, but from the very time an application is received by the BCI.

Declarations of interest are frequently made which go beyond the required level of declaration and, for example, members on location would often withdraw from decisions to avoid any possibility or perception of bias.

On a number of occasions this issue has been the subject of judicial review proceedings in the courts. On no occasion to date has a decision of the commission been overturned because of bias or perceived bias. Most recently, Mr. Justice Kearns ruled on the commission's procedures in respect of the interpretation of the legislation. The ruling concerned one member of the commission who undertook work on behalf of a company that had an interest in a company that was applying for a licence. He deemed that the relationship did not constitute a conflict of interest for the purposes of section 5 of the Schedule to the Radio and Television Act 1988 and described the connection as "tenuous".

On our reporting and accountability matters, as a statutory body we obviously undertake a range of activities with the aim of increasing our accountability to the Government, the broadcasting industry and the public. These activities include the preparation of an annual report and accounts, the publication of an annual review of activity, filing of EPOA statements, compliance with FOI legislation and the provision of reasons for decisions. In addition, the commission utilises extensive and meaningful consultation with the broadcasting industry and the public in developing a number of key policy areas.

Does Ms Craig know how many board members attend board meetings when decisions are being made? What is the average number of members who attend? I know that the quorum is five.

Ms Craig

It would be unusual to have less than eight. Typically, that would be the minimum. There certainly would have been fewer in attendance on occasion, depending on the circumstances.

Thank you.

Mr. Maguire

Mr. O'Keeffe will deal with the next section of the submission, which concerns the commission's licensing policies under the 1988 Act.

Mr. O’Keeffe

I will be brief because I have two papers prepared. I could go on at length but I will just touch on the key points in them. The papers are attached to the report and if any member wants to ask questions I will be happy to take them.

The first paper deals with the licence application process and the practices that we operate in relation to each licence application process. It sets out the legislative relevant provisions in the 1988 Act; the other practices within the application process we have introduced - I include things like the guide to submissions and open public hearings in that; a general observation on best practice and consistency; brief reference to the court challenges to the process - I make the point that the courts have upheld the decisions of the commission in respect of all the cases that have come before them in recent years. I go into a little bit more detail on the section 5 provisions, which cover the expressions of interest, the invitation for applications and the guide to submissions. It basically sets out how we go about establishing the application process and providing guides to submissions for any applicants interested in the process.

Section 3 of the paper deals with the assessment of applications and the decision-making process. I make reference to the extent of public access to applications and all elements of the activities of the commission that are made available for scrutiny. I refer to the criteria for the assessment of the applications, which reflect section 6 of the 1988 Act and section 60 of the 2001 Act. Then I outline the decision-making procedure, which involves three phases: the initial consideration and shortlisting; the public hearing of the applications; and the making of the final decision. I have provided a little more detail on the rationale behind why we have a public hearing. Basically, it is about providing openness in the deliberations, providing commitments from applicants in a public forum and to afford the public an opportunity to view and examine applications for licences. There is another aspect to this involving written questions which are taken as a follow-up.

The next stage of the process is the feedback report. This occurs once a licensing decision has been made. Each unsuccessful applicant is provided with a feedback report outlining why he or she was unsuccessful. In addition, all unsuccessful applicants are invited to attend a meeting with the executive of the commission, during which the decisions are further clarified or amplified depending on the issues raised. There is also a section on how we negotiate a contract with a successful applicant, in which we identify some of the clarifications we seek under the various headings. The paper is obviously a lot more detailed than my summary suggests but I am conscious of the time constraints.

The second paper I wish to deal with concerns the licensing policy of the board over the period in question. The key principles include the orderly development of an independent radio sector, obviously having regard to the availability of radio frequency, and looking at the establishment of diversity of services in an area catering for a wide range of tastes.

The initial licensing policy, which really concerns the first board, looked at licensing - one national and 25 local or county or multiple-county services. It looked particularly at the orderly development of services at that point. The second board, which operated from 1993 to 1998, developed the community radio tier. It reactivated a national radio licence because of the unfortunate demise of Century Radio in 1991, and it also brought the national television service TV3 into operation.

The main policies of the current board have been touched upon by Mr. Maguire. Its main policies have involved the re-advertisement of all the existing local radio licences and the licensing of additional services in Dublin and other areas. Given that Dublin is obviously the most densely populated area, we have licensed quite a significant number of extra stations, possibly with more to follow in the near future. We have licensed one additional service in Cork and, while that brings to three the number of stations in the area, there is potential to develop some other services there. We developed the south east region and we will examine this further, pending an evaluation of the performance of that region.

There are references to other licensing arrangements which cover the community and community of interest sector and other licences such as some special interest medium wave licences and section 8 licences, which are temporary and institutional. There is much more detail in the papers but I appreciate the time constraints so I will pass on to Mr. Maguire again.

Mr. Maguire

We now come to the final section, which is the view of the commission on the joint committee's research findings in the report on the local radio licensing process. I want to clarify a number of points. First, the commission agrees with the review announced by the Minister. We agree that it is timely and welcome the opportunity to participate in it. We do not take, nor have we ever taken, issue with the committee's role or its right to undertake a review. We welcome its valuable contribution to the debate. We have some concerns about the process. I know this caused some tensions but these have been dealt with in correspondence.

I can assure Mr. Maguire that there has been no tension on the committee's side. It is very hard to hurt us.

Mr. Maguire

I do not in any sense seek to raise a row where none exists but we felt that we should have been consulted beforehand and that there were some factual inaccuracies. However, these have been dealt with.

Mr. Maguire is entitled to hisview.

Mr. Maguire

Turning to the question of the commission's response to the recommendations, the first recommendation we deal with concerns the appeals mechanism. The committee probably knows that we do not support the introduction of an appeals mechanism because we believe that the current system of judicial review is the only realistic and workable process. This is because the nature of each licensing process means that there are elements of subjectivity - programming and audience suitability to name but two - in each decision to award a licence to a particular applicant. The committee suggested in its report that an independent, eminent person or board might take charge of an appeals process. Such a person or board could therefore make a different decision to the board of the commission based on the assessment using the same criteria. That begs two questions: what is the point in having an original board, and would not all licensing decisions be referred to the appeals mechanism? As the committee knows, the board is appointed by the Government for a five year period. It is required to have experience from a range of different capacities - I will not list them all - and it presumed that the mix of expertise is included to bring all aspects of Irish life into the decision-making process. We believe an appeals board would just be an extra layer in respect of licensing decisions. We have no difficulty with the concept of an appeals mechanism that would look at the process other than the court. However, whether it would simply add another layer to the process without preventing the initiation of judicial reviews is open to question. In our view, the existence of such a process would not prevent any decisions being subsequently referred to the courts.

On transparency of decisions and complaints, while there have been some complaints, we have found that when the complaints are examined they relate more to the decision not to award an applicant the licence rather than to issues of transparency.

There is no doubt that there is a substantial cost involved in developing proposals for applications. Yet, in terms of the capital outlay of a successful applicant - in our experience it has ranged from €1.5 million to €3 million - the requirement to outlay between €50,000 and €90,000, about 3%, on the application is not excessive. It is substantial but not excessive. That said, we are always conscious of the cost to applicants. We always make a point about it in the oral hearings. We continue to look at ways to reduce the cost to applicants.

Recommendation 5.4 refers to the rollover of licences. This is one of the first issues that came up in the commission. We examined the issue carefully and decided that automatic renewal was not appropriate. Members will realise that stations had been awarded licences for 14 years. The original seven-year period was extended by a further seven-year period. The frequencies allocated are an extremely scarce and valuable resource. It is up to us to make the maximum use of that and ensure that the public gets the best service from it. In that context, we felt it was better to have a renewal process - where the existing stations could apply, as they have done historically - than allow the licence to rollover in perpetuity. The commission would forgo one of its primary functions as set out in statute if it were to allow automatic renewal of all licences. The principle of re-advertisement of licences is a strong motivation for contractors to comply with the legislative contractual obligations. The re-advertisement would facilitate the redrawing of existing franchise area boundaries where such was considered prudent. While this can be controversial and sensitive, it has to be kept under review. It provided an opportunity to review the appropriateness of programming commitments.

On the fast-track method, a different system operates in Britain. We have an open mind on this. We acknowledge the recommendations in this respect. If such a change was sought, the likelihood is it would require legislative change.

On the issue of consolidation of ownership and quota of local programming, the committee will be aware the commission undertook a comprehensive review of ownership and control policy culminating in the launch of a new policy document in October 2001. On this issue, it is important to take cognisance of that policy. This was the result of an extensive process of consultation. It is a complicated document and is sophisticated in the way it deals with the question of ownership and control. There were four key objectives in the new policy. In summary they are the promotion of plurality of ownership of the communications media; the promotion of the diversity of viewpoint, outlet and source; ensuring that contracts are held by persons with necessary character, experience, expertise and financial resources; and ensuring the local ethos of the service best serves the need of the local audience. This is the policy that currently prevails in the commission.

Six stations have changed hands under the new policy. There is no evidence that the ethos of the services has been altered in any way. We believe this is due to the safeguards contained in the policy document. When introducing the policy in 2001, the commission indicated that it would undertake a review of its impact and effectiveness after a three-year period. We remain committed to the principle of a review in late 2004 or early 2005.

On co-operatives, the commission strongly rejects any suggestion that we discriminate against co-operatives in licence applications - this proposition was rejected by the High Court in the Radio Kilkenny case. I can quote that here because it does not remain an issue in the Radio Kilkenny case; this proposition does not form part of their appeal to the Supreme Court. The commission operates a strong community radio policy and has currently licensed 13 community or community of interest stations across the country. We have recently received applications for a further six community licences, including one from Tipperary Mid-West Radio in respect of its existing franchise area. The commission has undertaken significant work in supporting the community sector and we recognise that it operates under different financial circumstances than the commercial sector. We currently provide funding and resources support for the community radio forum, a community radio support scheme and a training féile. This is in addition to the general training and development and other programming initiatives referred to earlier in the presentation.

On instances where a licence is not reviewed, the commission would be sympathetic to any views on how this issue might be addressed between an incumbent and a new applicant. The timing of the licence readvertisement process was specifically designed to facilitate an orderly transition to a new franchise in the event an incumbent was unsuccessful. However, as is currently evident, the incumbents generally have no desire to discuss a changeover and are primarily concerned with having the licensing decision overturned in the courts. Inevitably, delays are created for the new applicants and this approach militates against the possibility of a smooth transition between the parties.

Our approach has been, and will continue to be, motivated by a number of factors, not the least of which is we are dealing with the allocation of a valuable and scarce resource. Radio frequencies are based on availability and we always push for more availability on the basis of international agreement. It is not within our control. We cannot demand it, it is something we are given and must make the best of when we get it. We do that against a background of trying to provide diversity. We must try to look after and provide diversity for consumers.

The commission is an independent body. We believe we carry out our business in a fair and competent way. We believe, contrary to what is said, we do it in an extremely open manner which is transparent in the true sense of the word. It is our intention to do so and we are proud of our record in that regard.

I thank Mr. Maguire for his presentation. As he is aware, this committee will deal with the legislation when the Minister brings the Bill before both Houses of the Oireachtas and it is important for us to have an understanding of his role as it was to understand that of the radio franchise operators and how they perceived it. I am pleased Mr. Maguire respects the right of this committee to make recommendations. Of course he does not have to agree with them. However, in the end it will be a matter for the Government and the Oireachtas to decide what will be in the new legislation. I have no doubt that whoever follows on in the Broadcasting Commission of Ireland, whether it is the witnesses or a new structure, they will implement the law as passed by the Oireachtas. We are having this discussion today so we can add value to the process and as a result have good legislation coming out of the Oireachtas next April.

Senator O'Meara has carried out much work on behalf of the committee, which endorsed the ten recommendations and I ask her to put some questions.

I thank the chairman and the members of the commission for a comprehensive presentation. I will deal with the issues which we have raised in the report. The chairman said the licences are a scarce and valuable resource, as they are, and they are operating against the background of the success of local radio - a success which is encapsulated by the fact that people feel close to their local radio station. I cannot speak for the Dublin area, but in rural areas people feel close to their station which is a measure of their success as well as the commercial success. The commission is operating against the background of a need to ensure that stations remain viable and commercial. We cannot have an unstable situation, which is not the case, but have one which is a measure of the work done by the commission - which should be acknowledged - and of the success of the stations themselves. That was reflected in the last licensing round.

However, there are concerns which are reflected in the report. The BCI has stated, and I would like to re-iterate, that the findings of the research which I conducted showed that 64% of respondents declared themselves entirely happy with the process which they had gone through and their relationship with the commission and its work. The issues which we have raised would be pertinent even if 90% had declared themselves happy. The core issue is the appeal mechanism. As I stated, along with the commission, licences are a scarce and valuable resource and are becoming more so as local radio becomes more successful.

The ownership and control of a licence has become a much more valuable object to have. In that context, the granting and withdrawal of licences is a significant power to have. Like any power that the Legislature gives to a commission such as the BCI, it must be carefully granted, regulated and monitored. In that context, against the background of the concerns which have been expressed and which are reflected in this report, we feel it is important that there should be an appeal mechanism. I cannot accept the point that it would create another unnecessary layer because the right to go to the High Court would still remain. Of course, that is the case because it is in the Constitution and we have no right to suggest that it be taken away.

The setting up of an appeal mechanism would be of assistance to the commission because, in the context of where we are now, it would undermine the perception that the commission is being potentially unfair. The commission says it is being fair and they can stand over that but there is a perception that the process is unfair. There is also the fact that the only place people have to go is the High Court adds to the sense of unfairness. For instance, the commission might say that Tipperary Mid-West Radio has applied for a community licence, however, my understanding is that they have done so because they feel they have no other choice which is not a happy situation as the station is unhappy with its relationship with the commission. Therefore, the appeal mechanism would have positive results. It would generate a necessary accountability for the decisions of the commission. I am not suggesting that the decisions are unfair, but rather that it accepts that the principle of accountability is extremely important when the power is so big.

We have built accountability into many Bills because of the clear understanding that when one has big power, there must also be accountability. This would generate a protection for the commission and its decisions since it is likely an appeals mechanism would confirm most of its decisions. However, it would generate another layer of fairness and the fundamental principle of accountability would be built in. It would also create a forum in which any sense of unfairness or bad treatment could be dealt with outside of the legal mechanism. We love our colleagues in the legal system but the current system does not necessarily allow the space in which all their concerns can be aired but rather their legal concerns only.

I acknowledge that the BCI has a mechanism to allow people to come back. It does sit down with people and tell them how decisions were arrived at. However, we must unfortunately accept that this is not enough in the current environment. I hope we can have further discussions on the issue.

I would like to discuss the entitlement to diversity further because it is clearly a core issue for the commission. However, is the entitlement to diversity by any chance creating a sense in the commission that it must create diversity even if it is not sought?

My feedback from the community sector is that it is happy with the relationships and the development of the community sector and the support in the specialist sector has been excellent, very creative. Tipperary Mid-West Radio did not want to be in the community sector. This was imposed on it since it was not its choice. Therefore, it is not entirely happy.

If Mr. Maguire does not mind, we will bank some more questions.

Mr. Maguire

I will take careful notes to that end.

I am conscious that Mr. Maguire has a well trained legal mind and will have no difficulty, otherwise we would be here until seven o'clock tonight.

I have allowed Senator O'Meara to make an opening statement on a number of issues on behalf of the committee and I ask other members to confine their remarks to questions if possible.

I will keep the discussion focused on the radio licensing issues for the moment. The report, of whose process the BCI has been somewhat critical, was very clearly entitled, "Local Radio: The Licensing Process - a Review of the Licensing System as Experienced by Local Radio Stations in Ireland". We did that because the alternative was to bring representatives of local radio stations to the committee and hear them one after the other, which would have been a hugely time-consuming process. We could not have done it. Senator O'Meara did a very competent job of meeting the representatives and putting together the report so that we could put some of the concerns of local radio stations on the table for discussion. Many of those in local radio stations were very happy with the process and with the BCI.

I wish to ask about the process by which the board makes decisions on licensing. Is it a majority decision of the board? If there is, for example, a three-all draw on a vote, does the chairman have the casting vote?

Mr. Maguire

Yes.

Has it been the norm for the board to be split on licensing decisions made in the recent past, about which there seems to be some discontent? Many people are asking my next question, so we may as well be up-front about it: how is it that the board can make a decision about North West Radio, for example, when that radio station has the third highest rating in the country at the time? Are we entitled to ask that question?

Mr. Maguire

I am sorry, Chairman, and I am not trying to shy away from any questions on this matter, but legally I am not entitled to go into the substance of that decision, save in so far as the issues that have been dealt with are not appealed, if that arises.

We could probably rephrase the question by asking about decisions made about franchises that have not been renewed when stations have very high listenerships.

I was about to rephrase it, but the Chairman obviously has a keen legal mind as well. What I am trying to establish is that there are basic questions being asked by many people about certain radio stations that have very high listenerships. Are there overriding factors that the BCI needs to take into account, which would take priority over listenership ratings, for example, when making decisions? I do not think that is an unreasonable question.

My understanding, from our report, is that the recommendation about an appeal mechanism does not involve starting the whole process all over again. Like Senator O'Meara, I reject the claim of another layer of bureaucracy. This is about questioning the BCI on the basis for its decision in a detailed way, with an independent body actually asking the questions, without having to go to court. It is a far more detailed way of getting feedback and discussion following a disputed decision. Perhaps Mr. Maguire could comment on the concerns shared by Senator O'Meara and me.

Mr. Maguire skimmed quite quickly over the attitude of the BCI towards co-operative radio stations. What if listenership figures have been adequate for a co-operative radio station acting alongside a commercial radio station? What is the principled objection in one particular case, which I will not mention due to court proceedings? We have not yet mentioned pirate radio stations. Is there a view within the commission that the demand being filled by pirate radio stations must be considered, although they are illegal? With the success of pirate radio stations, it is clear that there is a gap that is not being filled by legitimate licensing from the BCI. How does it intend to address the filling of that gap in the future?

I will let Mr. Maguire answer those questions, because I did not expect there would be so many at this stage. All the members have offered to ask questions.

Mr. Maguire

I will do my best to answer, and I am sure the Chairman will remind me of the questions if I miss any.

The members will.

Mr. Maguire

I am sure they will. I will not answer them in sequence, because one or two can be answered relatively straightforwardly.

I hope Mr. Maguire understands why we are asking these questions: so we can have a better understanding of how the BCI does its work.

Mr. Maguire

I do not want to go back into submission mode, but I must point out that we are fully conscious of the fact that the members of the committee are in fact the policy makers, while we implement the policies when they are formed into statute. Normally, we do not do any lobbying about what we think should happen, but if we are specifically asked, as we have been in this instance, we will comment. We did have some thoughts about whether we should be involved in making arguments for our contentions in these matters, but we felt that on balance, this was the appropriate thing to do, and I hope the members agree with us in that regard.

If I understand the question about diversity, the Senator is asking whether we are just taking diversity into consideration for its own sake. The short answer is "no". The reason I can say that with such confidence is that the process for licensing a particular frequency is that once we get the frequencies, without going into the minutiae of the process, we embark on what is known as an expression of interest stage. For instance, the members will probably be aware that the closing date for the most recent period for expressions of interest for the new frequencies available in Dublin was 12 September. We had an enormous response to that; there were 38 responses altogether. Those expressions of interest have nothing to do with anything we have said about what sort of radio stations are required. They yield the type of radio stations that the applicants feel could be successful in the current market.

Part of our approach is that we try to keep the onus as much as we can on the applicants and on the demand for particular types of services. The worst thing we could have is a top-down, designed radio service which is not really in demand. Whenever we have offered licences for special interest stations, it has been as a result of the demand that has been demonstrated by applicants for radio licences, and we try to accommodate that. Unfortunately, in the previous history of competition for Dublin licences, we have not been able to provide the types of stations demanded by the applicants to anything like the degree of diversity that was being sought. For from having too much diversity, it will be found that the disappointed applicants in the Dublin licensing process think there is not enough.

The following relates to Deputy Coveney's remarks about pirate radio stations. We must remember that pirates are able to broadcast on a relatively easy basis. They do not have the responsibility of paying royalties or any of the costs involved in providing a radio service. Any regulator would say that if we are to regulate the airwaves at all the first thing we should do is to clear it of pirate stations. That is not always possible and I am sure it will not be possible in the future. Some very good pirates may exist, if that is not a contradiction in terms, and provide a particular type of service. We allow them to participate, provided they give an undertaking to get off the air for a defined period before the licence is considered. That is what has happened historically, and it has also been our approach. If people want their stations to stop being pirates and they feel they are filling a demand - as has happened in the past - they can participate in the licensing process, but they must demonstrate their goodwill towards the existing franchise holders by being prepared to leave the airwaves and come in with clean hands for the application process.

Mr. O’Keeffe

There are two types of pirate broadcaster. There is the pirate who provides a service that is genuinely lacking and wants to create a licensing situation. We are trying to identify frequencies to create further stations that add to those that already exist and that will create diversity. The other type of pirate is the one who will be a pirate anyway and is not interested in being legitimate. In Dublin we have two youth radio stations but many of the pirates are youth radio. There will always be pirates but our objective is to create a situation where the legitimate stations cover all different types.

Mr. Maguire

We do not have the policing powers for pirate radio stations, they rest with the ODTR and the other authorities. We cannot do anything about taking them off the air.

Senator O'Meara asked about the appeal mechanism. It is not just the radio or broadcasting regulations that are subject to the idea that there should be an over-arching appeal mechanism that would not involve the expense of going to court and could be resorted to in situations where there was a controversy over the granting of a licence. I am aware of that and I would not suggest that there are not areas where that would be appropriate - there are areas where there are appeals boards specifically designed to do that.

The butt of our objection, however, is that the granting of broadcasting licences is an unusual process. It cannot be done through objective assessment with objective criteria. If a person looks at a play list or the programme policy or the way in which taste is dealt with, be that cultural or musical, it is a subjective decision. The BCI is structured to take account of those in the make up of the commission on the basis of the people who participate. If there is a subjective basis that must be invoked in the granting of a licence, and there is an appeals mechanism on top of that, unless the board is replicated on the same basis, there will not be the same input in the subjective side. There are objective sides that can be dealt with on an objective basis and maybe it would be possible to construct some sort of appeal in respect of those but I do not see how a person could discriminate between one side of a licence application and another. In those circumstances, on the assumption that there is more than one application, which is usually where the controversy arises, there will always be an appeal so we might as well dispense with the first board because the decision of the second board will be the binding decision. It is unfair for an applicant who succeeded in the first round on the basis of the wide board consideration of it and then finds himself in an appeal situation where a different decision is made. It may be the same decision but that cannot be assumed for the purposes of the legislation. In those circumstances, putting in an appeal mechanism will eventually amount to an extra layer.

We said in our paper that we have no objection to the idea and that there could be the elements of a judicial review in the process with a less expensive method of dealing with it than going to court. No matter how it is constructed, however, there would be a judicial review contemplation eventually which would probably lead to a judicial review.

Deputy Coveney asked about co-operatives. I do not know where the idea comes from that we have something against them. The make up of a consortium that applies for a licence is a matter for the applicant, it has nothing to do with us. If a co-operative applies we have no difficulty with it, we have no bias for or against them. If it is a commercial licence, it is entitled to apply for it in the same way as any other applicant. The same strictures will apply regarding financial viability and the ten different sections of the licensing application and they will be judged on the same basis as the other applicants. It has never been a feature of any decision that we are not well disposed towards co-operatives.

In respect of the voting mechanism set out in the Act, it specifically provides for majority decisions. There is provision also for a quorum and the casting vote, which I do not like having to exercise. It was asked if that had happened in other cases - it happened twice. It was asked if there were split decisions on some licences. A range of views are expressed in respect of some licences. Some licensing processes are more controversial than others and split decisions arise. Before the final meeting dealing with the licences, each and every person must read and understand the full licence application of every application. They must be in a position to comment on each aspect of the application before coming to a conclusion. When everyone has been afforded the opportunity to give that determination in regard to the application, we have a collective discussion. There are situations where people admit that they had missed certain facts.

Is there a formal scoring system?

Mr. Maguire

No. Many of the deliberations would not be suitable for such a system. We have been asked that before.

Is there even a weighting for listenership figures versus content or is it purely subjective?

Mr. Maguire

No, it is not purely subjective, it is done against the background of statutory criteria that are set out in the Act and we must have regard to those criteria. These arguments about our method of dealing with the process have been the subject of court scrutiny and the process is the meat of the applications for judicial review. Our approach has been upheld by the courts.

Mr. Maguire will be aware that in many tendering or interview processes there a is formal scoring system.

Mr. Maguire

I am fully aware of that. However, if you have matters - and one necessarily does in assessing licensing applications - which are essentially to do with the subjective taste of the individuals involved, they cannot really be scored on a points basis by each member around the table. We take the view that we cannot divide the process up into some areas that should have points scoring and others that should not. One has to——

Should the legislation be changed to incorporate some form of scoring system in the interests of openness and transparency in adjudicating on an application?

Mr. Maguire

Ultimately, the question of what legislation should be there is a matter for the politicians, but I do not believe it should be changed in that particular way. The way we deal with it at present is the fairest way, given that there is a mixture of subjective and objective criteria to be evaluated. That ultimately is a matter for legislators.

I know there are a couple of other queries Mr. Maguire must respond to, but if Deputy Eamon Ryan does not mind I would like to allow Senators Finucane and Kenneally in first. Would the Deputy mind?

I would have a difficulty with that time wise Chairman, but by all means proceed.

Would Senator Finucane yield to Deputy Ryan?

The Chairman can let the Deputy proceed; it is just that I have another commitment in Limerick. There were two questions I wished to ask.

Could the Senator put his questions quickly?

The population of the mid-west region is about 365,000. We have a radio station in Limerick and one in Clare. The north Tipperary emphasis has been diluted because Mid-West Radio has been taken out and all of Tipperary is now treated as one. The customer is the barometer and the person who makes the choice of listening. One of the difficulties I have is that the customer is often not represented in the type of music that is played by a radio station. People therefore listen to pirate stations because they address a specific need, whether it is traditional music or country and western music. Elderly people consistently ring me to make those points.

The ODTR has the responsibility here. It may take a radio station out of circulation and it may come back within a short time. Elderly people, in particular, are listening to those stations and feel deprived when they are removed. How can the BCI address that issue? In other areas people talk about liberalisation, but when it comes to radio stations choice is contracting. A radio station in Limerick - no doubt very familiar to Mr. O'Keeffe - lost its licence and felt aggrieved with regard to the BCI and how it lost the licence.

On standards in broadcasting, the BCI has a remit, which I think it is exercising now under the Broadcasting Act 2001, to address advertising sponsorship and commercial promotions aimed at children. The type of advertising used on children's programmes such as "The Den" is insidious. Toys are constantly advertised, putting pressure on parents. The BCI should look at the Scandinavian model when it comes to advertising toys. This advertising takes place late in the evening when, in many cases, young children have gone to bed. What is happening with regard to the ethics of this issue? Some of the pirate stations are doing no harm to anybody and are catering for a niche audience.

I have to go to a meeting at 4 o'clock. My question relates to the latter part of Senator Finucane's question about children's advertising. Mr. O'Keeffe is aware of my views on this. Having carried out a survey of 200 such adverts on "Den 2" it is not the toys I object to but the full fat, full sugar, full salt food products that are constantly pushed at our children. This is one of the factors in the epidemic of obesity that is costing the country hugely and will cost us massively in the future. The BCI has the ultimate responsibility to start addressing this most serious national issue. I have experienced my own four year-old pulling at my sleeves in a supermarket. He does not know the difference between the advertisement and the programme. These companies are using every cartoon technique and character that they get from the commercial sector to sell junk to my children, and I want it stopped.

The BCI must present its proposals to the Minister in November. Can the witnesses outline the range of options it is considering? Is it too late for people to make submissions? Can the witnesses outline to the committee whether they have any inclination as to what recommendation the BCI is going to make? If not, we might push the matter further on another occasion.

I will not delay the committee as some of the questions I intended to ask have been dealt with. My line of questioning initially was going to be similar to Deputy Coveney's, and I want to tease out a bit more the issue of how a panel is constituted. Paper one, I think, refers to the oral hearing process. Obviously, the whole board would not attend an oral hearing process. I assume only a certain number of members of the boards would do so, and they would be the key decision makers on a particular licence.

Bear in mind that within the criteria board members might have different ways of interpreting. In its own presentations to Mr. Maguire the BCI talked about the appeals mechanism and said that "such a person or board could therefore make a different decision to the board of the BCI based on an assessment using the same criteria." The same would apply, would it not, if a certain number of board members were picked to adjudicate on something while others were not? Everybody would use the same criteria but may think differently in relation to them.

On the decision-making process, is there any executive recommendation? I would like the views of the witnesses also on a type of deregulation. There are so many interested people out there, and the pirate radio stations have been mentioned. We know that many of them want to be legitimate. The BCI basically decides how many operators will be permitted. Should all of these stations be licensed? Obviously, they would have to be subjected to certain criteria, but should we not have less regulation and let the market decide which stations are going to be successful and which are not?

Finally, with the current system, do the witnesses think that the duration of the licence is too long? It runs for seven years, or is it ten?

Mr. O’Keeffe

Ten years.

I thought so. Should that period be reduced?

Deputy Broughan has some short questions, and I will then take Deputies McGuinness, Kelly and Harkin and Senator Mansergh.

I welcome the delegation. On transparency, there is no formal scoring system for the awarding of licences. SenatorO'Meara's report suggested that the BCI should commission independent research to assess the veracity of the key data assumptions made by applicants. Has the delegation answered that point today? Should the issuing of new licences not be based on research which the BCI carries out? Take the Dublin market for example. On our dial at present I think we have 11, 12 or 13 stations, and in our car we have perhaps 20 buttons on which we can receive stations.

We know from young people attending our earlier hearings that certain types of music for youth audiences were not being catered for. We heard from Senator Finucane that some older audiences still have problems, but how do we know any of this without the research to base it on? Has the BCI answered the fundamental point that Senator O'Meara made on behalf of this committee on the whole issue of transparency, that people should be able to look at objective criteria whereby the final award of the licences could be objectively measured?

There are subjective elements in this. One changes as one goes through life. The famous Vincent Browne, for example, seems to have discovered opera in recent times, and we listen to a couple of opera singers on his radio programme every night now together with politics, which is wonderful. How do we know the objective criteria or should there be objective criteria and how do other countries do it? Is it OFTEL in the United Kingdom? To what extent is the Irish model based on the UK model? To what extent do other jurisdictions have systems similar to ours?

In the United Kingdom one of the points made about community radio was that stations should be for large districts, such as the London area and not for small districts. What research has the Broadcasting Commission conducted on the performance of existing community franchises in proportion to listenership? We politicians support community radio but some people allege that its listenership is low. Can anything be done about that or what should be done for the future? I cannot see how the criteria for the commission's ownership and control policy statement fits with the criteria for cross-ownership in other policy details, local ethos and so on. The model is rather for determining concentration. How is that determined?

I do not know whether we can name stations today but I remember Midlands-Heartland, the competition which was brought to our attention. Issues are raised about newspaper ownership, cross-ownership in a territory. The commission says that it has certain percentages and so on which do not affect the area but we have grave concerns that there could be particular political viewpoints being strongly expressed across a range of media. We have no control in the State over newspaper ownership etc. but newspaper owners acquire radio stations. Is the model the commission puts forward for determining competition good enough as regards cross-ownership?

I support my colleagues on the issue of children's advertising. The Labour Party lodged a strong submission on that and we look forward to hearing the Chairman's final decision on it. My colleague from Fine Gael published a Bill on subtitling. We met the Irish Hard of Hearing Association and the Deaf Society and most members feel that the treatment of the deaf and hard of hearing is disgraceful. While this may be extending the remit for the commission to television what can it do or must a provision on this have to go into the Broadcasting Act?

Mr. Maguire

I hope I can get my head around all of the questions that have been put but I am sure I will be reminded if I miss any. There are certain questions that it will be appropriate for me to answer and certain technical ones which I will ask Mr. O'Keeffe to answer as he knows the process better than I do in many respects.

Several members asked about children's advertising. Some members made a submission, for example Deputy Ryan——

We did so at an informal meeting rather than in writing.

Mr. Maguire

The word transparency is emerging again as being somewhat contentious but we were told to deal with this as a priority. That was the first thing that was said. We have done several things and I am not going to go into all the detail in respect of this. It is all published and available on the Internet and we can furnish hard copies if the committee wishes. We did considerable research on the question of children's advertising, including taking into account the way in which this was dealt with in other jurisdictions. We embarked on the first phase and announced that at a press conference to which we invited various people. If I am not mistaken Deputy Coveney attended.

We are now into the second stage where we are taking submissions on the content of the code. Far from in any way shutting people out we approached the issue with an open mind. We knew that there were various definitions to be examined, and research to be carried out and that even the process we were undertaking had to be under scrutiny itself. We took all of that on board and asked for submissions in respect of it. We received many submissions, formal and informal. The process is ongoing and we would welcome any further submissions made in that regard because we are to a certain extent in uncharted waters as far as this jurisdiction is concerned from the BCI's point of view. There are other means of regulating advertising but specifically on children's codes these are uncharted waters and we have tried to deal with the issue in the most open consultative way possible, both in terms of the type of process and the content of the codes. We are still dealing with that. The same applies in a general way to the other codes. On the question of people with a disability, we will also adopt an open approach.

I welcome the fact that it is possible for people to make further detailed submissions but is it the case that the BCI would hope to present this to the Minister by November as set out in its review 2002? What is the process after that? Does it require legislation or a ministerial order?

Mr. O’Keeffe

We are launching the second phase of the consultation on 9 October and that will effectively deal with the content. The first phase dealt primarily with definitions. We now deal with the content of the code. We will have a television and radio advertising campaign to support that and will be seeking the views of children. We are looking at a mechanism for doing that. That will run until the end of December. To be clear on when the code will come in, our obligation is to report on progress we have made and we will do that to the Minister in November. Our intention is that at the end of phase two we will formulate the draft code and introduce it in the first quarter or half of 2004.

The second phase, which is being launched in about a fortnight, is the critical consultation element because that is about the content of the code.

The BCI does not need ministerial or Government approval for the code?

Mr. O’Keeffe

No.

Mr. Maguire

The question about Limerick was linked with the suggestion that there should be a deregulated approach in respect of what are essentially pirates. International agreements on the use of radio waves put the availability of frequencies in an international perspective. The impact of that ranges from such things as air traffic control through to ambulance, army, and Garda frequencies and to different frequencies allotted to different purposes. We do not have control over that. We could not suddenly stand back and say we are going to licence every station that wants to be licensed. Even if we wanted to do that, and it would not be the way to go, it would not be possible to do so.

Some of the issues arising from Limerick predate my time on the board so I will ask Mr. O'Keeffe to deal with that.

Mr. O’Keeffe

I wish to outline our licensing policy in that region. We have in the recent past awarded a medium wave frequency to a group in the Limerick area and we hope that will commence broadcasting shortly. Our intention is to review the regional licence which we started in the south east probably after it has been on air for 12 months, in mid-2004. We will then review whether to proceed with further regional licences or perhaps go for a second county in larger urban areas such as Limerick or Galway and areas of that nature. We also have an application from a group in the west Limerick area to provide a community service covering the Newcastle West, Abbeyfeale region. We have made significant progress from a licensing point of view. Tipperary Mid-West Radio has applied for a community radio licence. It is proposing effectively the same service that it is operating presently within the existing structure. The group looked at the community model and has come around to accepting that it does work. Their concern was the model could not work financially. However, in their application their viewpoint is that the community model can work and will work for them. We feel there is an extension of licences right around that area as opposed to taking from it. All I will say about our friend who was there in the past is that we did everything. We pleaded with him and the last thing I want to do is remove a licence from somebody. However, there were 17 serious breaches of contract over a two year period. Unfortunately, something had to give.

Mr. Maguire

Deputy Broughan referred to the role that independent research might have and the lack of transparency. Since its inception, the approach that the commission has adopted with regard to licensing applications is that it is up to the applicants to make the case why they should be given a licence in a particular area. That includes both in the early stage - expressions of interest - and the application stage. One of the ten proposals deals with market research. That is an expensive item for any of the applicants that are involved. The point that is made is a simple one in the written submission. What the Deputy is suggesting - I do not mean this in a pejorative way - is that there should be an independent expert to review the independent expert engaged by the applicant. That is essentially what would happen. By and large, the applicants commission independent research from recognisable and recognised research bodies.

The other point that is sometimes missed is in regard to the commission itself. There is a deal of expertise within executive and permanent staff of the commission who can deal both with the statistical side and market research. An example of this is Mr. O'Keeffe who has been involved in the reporting to the JNLR, ongoing media monitoring on a statistical basis. He has been involved in that for a considerable time and great expertise is required to deal with these issues. There are others on the staff who can deal with them. It must be borne in mind that in the process itself, the oral hearings are followed by written questions to clarify any grey areas that may exist and come to the attention of the members or the commission experts. The issue does not reach the decision-making stage until those matters have been clarified to our satisfaction.

On the hearing process and the number of members involved in this, any structures set up under a statute have to be done on the basis of a system that will be operable in each and every case. That is the reason bodies, such as county councils, boards and so on, have the ordinary regulation that it is necessary to have a quorum before a decision is reached. That is set into the statute of the Broadcasting Commission of Ireland. The quorum is dealt with and so too is the chairman's casting vote. It is more preferable that one would have a 100% attendance at every possible decision-making process. However, that is not possible in each case.

There seems to be a misunderstanding. If there is an oral hearing outside of Dublin, do the ten members of the board go to that? I presume a number are picked to attend.

Mr. Maguire

No.

Is it open to all members?

Mr. Maguire

Yes. Anybody who participates in the decision-making process has to have the advantage of seeing what happened at the oral hearing stage. Does that answer the Senator's question?

Yes. I also asked about the duration of the licence.

Mr. Maguire

I find that interesting as there are two types of questions that might arise on that. Senator O'Meara asked about the question of rollover which is precisely the obverse of the question asked by the other member. It implies a criticism that the duration of the licences is too long. The rollover point makes the licence "in perpetuity". All of these things have to be dealt with on the basis of what is best in the circumstances. That is how we came to the conclusion that a rollover was inappropriate. Since we did not believe that and since there had been a 14-year licence - though it was two periods of seven years - we decided we would extend the licence to a ten year period. There was strong lobbying pressure put on politicians, and it was brought to our attention as well, by the industry. At that time, it was pressed by the association AIRS which is now the IBI. They wanted right or wrong to have a rollover. We felt no, but we felt, in deference to the fact that we were saying no rollover, we would make the licensing period long enough. There is another commercial factor that comes into that. An applicant putting up money for a licence has to show commercial viability to his backers. In other words, it may be the bank but one has to say this is not a licence that will last three years. One could not get it up and running and put the money into it unless one was certain that there was a reasonable length of time. We took the view that in all the circumstances ten years was a reasonable period.

Mr. Maguire

Ms Craig will deal with the access rules.

Ms Craig

What we are calling the access rules are those under section 19 of the Broadcasting Act 2001 in respect of sub-titling for the deaf and hard of hearing. There are rules also regarding audio description for the blind and visually impaired. We have commenced the process of developing the rules. We have undertaken a substantial amount of in-house research on establishing statistics on the numbers of people this impacts on in Ireland. That has not been established in the past. We are also examining on an international basis what conditions apply to both public and private broadcasters in Europe and the English speaking world. Some of this work has already been done but has not been published. We would hope to be in a position to publish this at the start of the debate.

One of the other main planks of the work to date has been the extensive consultation with the individual groups that are involved. The committee will be aware of some of the interest groups who have been lobbying and quite vocal on their needs in this area. One of the things we have discovered is that there are different sets of views. The broadcasters and the interest groups are coming from different viewpoints on this issue. What the commission has decided is that in the interest of getting some consensus - it necessarily might not happen like this - on the rules, we are going to conduct our consultation by way of a series of forum meetings at which the broadcasters, the interest groups and other interested parties will be represented. We are in the planning stages of that work at present. It will have an independent chairperson and we would hope to have a series of three meetings commencing in October and hopefully concluding before Christmas, at which point a report will go the board of the commission, which will then take a view on the rules that should be drawn up.

Mr. Maguire

There is one thing that I would not like to be accused of not dealing with, because Deputy Broughan raised it in respect of the question of ownership and control.

The commission takes the view that there is no obvious practical model for determining what constitutes a reasonable share. Is that not a cop-out? I was searching for the point when I spoke.

I will make a brief comment on the planned procedures dealing with audioscripting and subtitling issues. How does the witness expect that the transition from BCI to BAI, if that happens over the next year, will impact on that because presumably, the BCI will be looking at this in respect of private broadcasters, i.e. TV3?

Ms Craig

The rules apply to RTE, the public sector broadcaster, and to all the private broadcasters. The same rules will apply. RTE has agreed to participate in this process, this round-table discussion.

There would be a seamless transition from BCI to BAI, should that happen?

Ms Craig

It should be pretty seamless assuming that the legislative provisions pass on those same obligations and responsibility to the BAI. It should not be a problem.

The commission always had the power to introduce access rules, had it not?

Ms Craig

They were very specific within section 19 of the 2001 Act. It actually put an obligation on us to introduce those. It might be said too that TV3 is only a few years in existence so it did not really arise for the commission up to the point when TV3 commenced broadcasting in 1998. The agreement to try to generate the rules through a process of round-table discussions was actually the preferred process of all the parties involved, both the broadcasters and the disability groups, who expressed a preference for that process.

Mr. Maguire

I wish to deal with Deputy Broughan's point on the question of ownership and control. He was saying that we had "copped out" on it. I do not accept that. If one looks at the policy one will see that we have gone into some depth of analysis on how we should discharge our duties in that regard.

We are always conscious of the background of the regulatory framework. That is the first thing to say in respect of it. I said at the outset that essentially there were various things paramount for us - the diversity of programme services for the public, a flexible and consistent approach, and adequate regulations based on current conditions. I do not want to get too technical about this, but I will give some flavour of how the policy document deals with the very point to which Deputy Broughan referred.

There are two sections pertinent to this, two subsections of the 1988 Act - section 6(2)(g) and 6(2)(h) which place on us the responsibility in respect of dealing with the following. Section (6)(2)(g) refers to “the desirability of allowing any person or group of persons to have control of, or substantial interest in, an undue number of sound broadcasting services in respect of which a sound broadcasting contract has been awarded under this Act”. Section 6(2)(h) refers to “the desirability of allowing any person or group of persons to have control of or substantial interests in an undue amount of communications media in the area specified in a notice under section 5(5)”. Those are the two relevant considerations.

When we were looking at the policy detail in respect of that we obviously had to define the various words used - control, substantial interests in, communications media - and we did that, and how we did so is set out in the policy document.

The Deputy then made reference to two separate aspects. It becomes clear when one thinks about it how distinct they are. One relates to the undue number of sound broadcasting services, i.e. owning or having a controlling interest in a substantial number or undue number, as the Act says, of sound broadcasting services. We thought about that. What it really means is taking the totality of the number that we license and fixing some sort of percentage of control on what any given organisation or person could control. That is what the "undue number" means. We came to the conclusion which is in the policy document, which states:

The commission is of the view that a number equivalent to 15% or less of the total number of commercial sound broadcasting services licensed under the Act would likely be an acceptable level for any one investor. A number equivalent to 15% to 25% would require more careful consideration by the commission and would be necessary for an applicant to justify. A number equivalent to 25% would be unacceptable.

That is how we dealt with that. It is very clear.

It is easier to be clear about that particular remit than it is to be clear about the second one, which has to do with the question of the undue amount of communications media in a specified area. One is now talking about not just radio licences but also about media people, and having media interests, and talking about it within a specified area. We had to look at that. We eventually came to the conclusion that the only logical way in which one could deal with that would be on a case by case basis, and that the following criteria would be applied: that there would be an examination of the totality of the communications media in the area specified, including weighting to be allowed for between national and local. That is not just radio services; that is the media.

The next test would be an application of a test of what is known as substitute ability, a term borrowed from the world of economists, with which some committee members would be familiar. Essentially it is: "In assessing the extent to which one communications media can be deemed to be a substitute for another, regard will be had to the characteristics of the communications media in question, the cost to the user, and-or its target licence." The final criterion is, "an examination of the applicant's ability to influence the opinion-forming power, its dominance of the local advertising market and the dominance of the market share of any communications media in which it held an interest." Each applicant will be asked to justify its application in the context of the above criterion.

The next issue is the type of concentration. This may be the area Deputy Broughan's question was directed to. We were looking at the type of concentration one could have. One can have horizontal integration, diagonal integration or vertical integration. We looked at all of those. We wanted to see how concentration would be determined, and what the means to work out the concentration might be. There were four models. One was the audience share model, which determines the percentage of a total audience reached by programmes attributable to one company over a certain period. The second was the licence holder share model. This limits the involvement of a company that may have indifferent licence holders. The third was the revenue share-frequency limitation model, which combines the two thresholds, namely the share of programmes relative to the total frequencies available for the commercial broadcasting and revenue earned by one market player relative to the revenues earned in the market as a whole. The fourth is the capital share broadcasting licence model - that involves three separate criteria applied cumulatively, namely the capital share limits in one broadcaster, the number of licences and the limits on capital shares in a number of broadcasters.

We felt that no one model was actually suitable or appropriate in its entirety to the Irish sector, given the various elements I have outlined, but that we should apply the capital share-broadcasting licence model in the context of a number of licences and the limits on capital shares in a number of broadcasters. The audience share model will be applied as a measure for determining an undue amount of communications media in a specified area.

I know that gets a bit technical, but one of the points we had to deal with was that there were so many variables in relation to what we were being told to do by the Act, that we had to determine in one way or another all of those different criteria. That is the way we have approached it and, if I may say so, we did that on a very studied basis. The document is comprehensive and quite sophisticated on the area. On this - this is not the area where one has to get a blessing - in the course of formulating this policy, we trawled for submissions that anyone was interested in submitting. Among those was one from the Competition Authority, which was extremely helpful to us. It has given us the benefit of its view that it is an appropriate route. I know that that is not the ultimate test, but it was important to us. As I mentioned, when it came to the market players, and any of those who showed an interest in making submissions, those who expressed themselves said that they were happy with our approach.

I call Deputy McGuinness, followed by Deputies Kelly and Harkin and Senator Mansergh.

I would like to tease out the mechanics of examining an application when it goes before the commission. In your submission, Mr. Maguire, you said that 19 commercial stations were licensed, including four new stations in Dublin, a regional station, a Cork station, and community stations. There are six licences pending for the last group. In another part, the commission dealt with the cost of making such a submission, which can range from €50,000 to €90,000. That is expensive, but it must be done in the context of making the best pitch with the Broadcasting Commission of Ireland.

Let us bear that workload in mind, along with the fact that a submission is a quite substantial document. The number of members on the board is ten, and Mr. Maguire says that they have teased out and examined the application, gone into the pros and cons, and given their view. Against that backdrop, I take the question asked of Ms Craig about the attendance at the meetings being about eight. It seems from some of the minutes of those meetings that the attendances were six when some of the controversial decisions were made. I find it hard to see how such a small group can go into the finer detail of very broad submissions made by professionals. For example, how does the group weigh up forecast or actual accounts? Does the group outsource expertise, leave it to the members to do, or is there some other method in place? Perhaps some public perceptions are being created by the fact that there seems to be a lack of transparency. There is certainly a lack of understanding among the general public as to how such numbers of people - from six to eight - can sit and make a decision of this kind, given the number of documents that must be before the board.

I now come to the members' qualifications. Do they listen to the local radio stations, or do they simply look at the programme listings for each station? Do they have knowledge of how the market is reacting? It was stated that the market and customers were the important part. Do they know how those customers react? Do they understand the importance of a specific radio station to the local community? Bearing in mind the small numbers there, I would like to ask about a comment in a report, where it says that there are two members, whom I will not name, who are not participating in any of the licensing decisions. It appeared in the print media and on the radio, and therefore people wonder why the numbers on the board have fallen from ten to eight to six. It was stated that two board members are not participating in any of the licensing decisions. That information was contained in a newspaper article.

We can clarify that with Mr.Maguire and his colleagues.

I would like clarification on that. Those two board members were told not to take part in any of the——

Mr. Maguire

That is factually wrong.

I am quoting from a newspaper. I am not saying that it is right simply because it is in the newspaper. I would like to have it clarified.

Mr. Maguire

I appreciate that.

Not everything that one reads in a newspaper is factually correct.

Particularly about politicians, Deputy.

On conflict of interest, are all the board members affected from time to time? In county enterprise boards, a committee would thoroughly evaluate the submission and make a recommendation. Does that happen? Does lobbying of members take place, or is it a completely transparent system with no lobbying whatsoever?

I will move on to the co-ops and communities. Kilkenny was mentioned specifically in the submission, and I will not enter into the legal aspect of a case from that city, since it is before the High Court. I am from Kilkenny, so I have an interest in this issue. Mr. O'Keeffe experienced at first hand the passion in that city when he argued the various points on our local radio yesterday, so my questions are not part and parcel of the court hearings. I would like to understand more clearly the commissions understanding of "community" and "co-ops" and the ownership issue in a local model. It appears in the case of Kilkenny that was mentioned that there is a very clear working model of local co-operative community radio where it is in the direct ownership of the community. I would like to hear, in the context of earlier comments, what the commissions understanding of "community" is. It seems to be different from that of many of the shareholders in the Kilkenny co-operative movement regarding the ownership of that radio station.

Mention was made that the hand-over must be fairly clear. There is a finish date and a date when the new people take up ownership. However, court cases have thrown some of those dates out of kilter, since there has been an extension of time for some radio stations. With that sort of movement taking place - without discussing the legality of it - I wish to ask, what is the commissions policy on the timeframe, and the lapse of time, between the closing of a station and the commencement of another? What is the policy on that gap? Is it within the commissions remit to force existing licence holders to co-operate with incoming licence holders? What effort does the commission make with the outgoing licence holder in the context of continuation or ending of the station? For example, does the commission have any regard, in its consideration of the licence or extension of time for the licence holder in that instance, to how many jobs might go and how staff might be moved on?

In the commissions consideration of "community" and "co-operative", does it have any regard for the assets if there is a licence holder who has built them up? In most cases, the assets are simply a loyal listenership or a loyal body or community of advertisers. Is there a total disregard for that? Mr. Maguire mentioned in another part of his submission the value of such licences, which can now run to millions of euro. As the commission makes a decision to close down one station or reopen another, it is effectively handing the assets, sometimes those of community or co-operative stations, straight to the commercial sector free of charge. There is no financial consideration given for that transfer, yet the commission encouraged it in some of its letters. The commission is encouraging co-operation between the closing station and the new owners. That seems to the general public to be more than a little unfair. If the accounts are examined in detail, as the witnesses say they do, they must be aware that the commission is handing a very valuable asset from one body of people to another. The commissions argument seems to be that they are making a decision but that it depends on the listenership, the customers, and what they want from the station. It is a little like an article that I read recently in The New York Times, which was brought to my attention. It referred to local radio and the changes that were taking place. It could be taking place in this country. It stated:

Driving across America you can chart your course by the accents, news and songs streaming in from the nearest AM transmitter. What is more, the invisible people who introduced the songs gave the impression that they listened to them at home. They were locals with local interests: when I turned on the radio I heard America singing, even in the dumb banter of the morning zoo hosts.

It is a comment in general on the imperfections of local radio, but yet, with all its imperfections the listenership is indicating through its support that is what it wants. In America it is noted that with the change of radio licences the "monotonous numbing hum" is now being experienced. I am afraid that is where we are going to because of the ownership of the various companies. Some of these are crossed - some concerns retain a common interest in a number of companies. The same play lists are in use, the same advertisers are being tapped into and so on. The BCI should have an obligation to ensure that co-operative groups involved in community ethos and delivering successful radio stations are not necessarily rolled over. There should be some sort of obligation to consider the particular community that is their main support base. They have existed for years and their figures and accounts show this. I do not believe this is reflected sufficiently in the context of BCI policy.

In the report, a "three-three" situation - or some such division - is referred to, and then the chairman steps in to give his casting vote. Three-three out of ten and the division was 30% to 40% in some of the decisions that were taken. It is a little unfair that it is that percentage of the board that is making the decision. Then there is the question of the chairman's role in the context of a three-three. In this House, for example, if there was a division and the Ceann Comhairle was to make his decision, it would be in favour of the status quo, and the Government in that instance would not fall, whereas in the case of the BCI no criterion is set down - or it has not been mentioned - as to how the chairman should make a decision in a three-three divide given the argument about co-operatives, the support from the public and the question of assets, which I believe to be a serious issue. The transfer of assets, free, to a commercial interest has not been addressed by anyone. I would like if this issue could be addressed.

The quotation I gave from America is reminiscent of the comment made by Mr. Maguire about "the top down" and "not in demand". That needs to be addressed. Some issues, raised by way of public perception, have not been addressed adequately in the report before us. Certainly, the experience of some radio stations - I am not speaking about Kilkenny solely - is that when a decision is made, regardless of what side one is on, the explanation for it is not given in a manner that comprehensively describes what exactly has happened vis-à-vis each application. Therefore, a scoring system - or some method that ensures the application is benchmarked against something real and tangible - would allay some of the concerns and fears over failed applications, whether in the case of existing stations or not. The BCI has a responsibility to explain that.

The final point I wish to make is that the BCI is not doing enough about the transition. The tone of the letters sent out by way of arranging the transition - or dealing with the transition period - took no cognisance of the listenership, a point made earlier by another member. The fact that elderly people in rural Ireland and remote communities, and other groups, rely on local radio as their only lifeline to life outside their own door or parish is not recognised. The BCI does not recognise the importance of 'local'. Mr. Tom Collins of NUI Maynooth dealt with it in detail in a paper published recently. The local public representative, community or whatever, is so important to people and this is not reflected in the actions of the BCI. There is a clear need for the board to spell out its intentions on the radio stations that have failed and during the interim. There is an onus on the commission to provide a 'road map', without appearing to bully those involved into moving from where they are to closure; to clearing the transition and to moving on. That obligation, really, is to local communities. The BCI does not seem to recognise that.

Mr. Maguire

I propose to deal with some of the major issues in that and I will ask Mr. O'Keeffe to deal with those of a more technical nature.

Has Mr. Maguire sufficient questions to deal with or shall I take a few more?

Mr. Maguire

I would prefer to deal with those put by Deputy McGuinness, if you do not mind, Chairman.

No, because they are important. I am grateful for Deputy McGuinness's attendance at the meeting. I know that Deputy Harkin and Senator Higgins have important questions to put. Members are aware, of course, that we will be making recommendations after this meeting - or in several months time - on this topic. There are so many questions here. Will members be patient and we will get some of the answers? We will certainly continue the meeting until all questions from members have been answered.

Mr. Maguire

I know where Deputy McGuinness comes from and what he is saying to me in relation to it. I am not trying to avoid any of the issues he has ranged before me in saying I will have to deal with some of them on a generalised basis, because I cannot trespass on the court proceedings. I hope the Deputy appreciates that, but I will attempt to deal with the matters he has raised on an issue by issue basis. I will ask Mr. O'Keeffe to deal with some of the questions because they are matters he can cover better than me.

Determined licences are a feature of the licensing system. In other words, there are licences which come to an end after a period. As I said at the start of this meeting, one of the first issues we were confronted with was whether or not there would be a roll-over. Some of the matters under consideration by the committee deal with the absence of some right to continue, given the circumstances in which a particular radio licence may exist. Once we came to the conclusion that licences would be advertised, it meant that as a necessary logical follow-on, any applications made had to be considered on an equal basis. They had to be considered the best way to fulfil the statutory requirements, but also bear in mind the needs of the people in the locality being licensed. That was what we set out to do, and that is what we do when we make our decisions. To deal specifically with one of the points made about the role of the chairman, any institution which operates on a democratic basis always has certain 'thresholds' built in. They are usually the thresholds of the quorum. We are fixed with a quorum. The quorum is set out. It is also stated that the chairman has the casting vote.

I am a full member of the commission in the sense that I participate in each decision on the basis of my preferences as much as anyone else's. I have a full vote and I vote in the ordinary way. What I want the committee to take on board as a matter of principle in relation to that is that in my view it would defy logic and respect if I were to abrogate my sincerely held views or invoke a principle not in my view based on the value of the particular applications before me. I came to my own conclusions and I voted, accordingly. As to the question of licence determining, it means that after the period of the licence has expired - after the ten-year period covering the licences recently granted - there will be another application process. At that stage consideration will be given to whether those licences will be awarded either to the incumbent or to someone who makes a better case in the view of the commission.

I appreciate that it is not the view of the committee, and I do not wish to trespass on cases where licences were granted. However, that is for the commission to decide as best it can, in discharging its duty in the best way it sees fit in accordance with the statutory provisions. The committee may not accept this, but it can rest assured that, in my experience of dealing with the decisions that have been made, each member of the commission takes his or her duty seriously. I doubt that I can recollect any instance in a matter which carried consequences - which included financial consequences - for the people involved, where all of those issues were not gone into thoroughly before the decision was made. I can tell the committee that has been in the position.

Why does the commission not have a full attendance at meetings if the members are very serious about their obligations?

Mr. Maguire

I fully accept that it is always preferable to have the fullest possible attendance at any meeting, particularly a meeting which is taking decisions of consequence. There can be a number of reasons for the absence of members and they vary from the fact that there is either a real or a perceived conflict of interest on the participant taking part in the decision-making process, or where people are sick, or indisposed.

Could it be that because of the vested interests of certain members of the board, they come into conflict too often with decisions that have to be made? Perhaps the composition should be changed to a different type of person on the board who would not have a conflict of interest as often as appears to be the case.

I asked that question in a general way. It does require Mr. Maguire to specifically address what the Chairman is asking and what I have asked on the makeup of the board, about a conflict of interest and so on. I take it the ten members of the board have all been involved at some stage in making decisions and that none has made any decisions.

Mr. Maguire

Absolutely. There is a tendency to forget the number of decisions that we make, and that is what I tended to do at the start of the process today. I am not supposed to go into individual decisions, even though I would have to be deaf and blind not to know they were related to particular cases. I do not want to go into particular cases. I can deal with the question best on the basis of general principle.

If the statute sets a way in which we operate, which includes a quorum and the question of a casting vote, then that is the way we operate. There is not a democratic body that does not have the need for a quorum. The Dáil has a standing order on quorums, as have the committees. They may not be set in statute, as such, but they do operate on a particular basis.

Mr. Maguire

That is not of my or our making. I agree it is always preferable to have the maximum attendance in any democratic decision-making body. We operate with what we have.

The Chairman asked me a direct question as to whether the composition should be changed, or if the board should consist of people who do not have either a real or perceived conflict of interest. In an ideal world, the answer to that would have to be "yes". The difficulty about that in a relatively small community such as we have in Ireland, is that whoever is picking the board could not anticipate the number of times that sort of issue could arise. That is not really a matter for me. I do not think one could guard against the possibility of that happening. The courts are relatively clear on these matters. It is not just a question of having a bias, but also of having a perceived bias that becomes the problem.

The reason Deputy McGuinness and myself are pursuing this——

Mr. Maguire

Perhaps the Chairman should not go too far into the reasons.

No, I will be quite clear with Mr. Maguire.

Mr. Maguire

I am sorry.

The reason is that in the broadcasting authority Bill, there will be a provision for the appointment of members to a board and I have no doubt that the committee will be making recommendations to the Minister on the composition of the board. That is why the committee was interested in Mr. Maguires professional views as chairman of the body charged with the responsibility of making such decisions.

Mr. Maguire

The level of commitment by the individual board members is enormous, and the amount of work involved is substantial. I am satisfied, taking account of the amount of work and effort that members put into such matters, that any decision of the commission can be stood over. The questions of non-attendance and conflicts of interest do not arise that often and they have not interfered with the work of the board, it is fair to say. Perhaps others would be a better judge of that, and Mr. O'Keeffe will have something to say in respect of that.

The committee raised the question of local ethos and my understanding of what community meant. We are very conscious of what community means, and we are very conscious of what community radio is and means. We are conscious that it is not for profit; that, primarily, it serves the local community and of how the community is dealt with by the local community radio. Mr. O'Keeffe will give the committee more details on this issue because he was involved with the commission before I was. It is fair to say that we pioneered the type of community radio that has been successfully operated within this jurisdiction.

There is also a separate but related concept of community of interest, where one might have, for instance, a community spread in the Dublin area which might have a particular interest which is served by a community of interest station. This is another concept which has been successful, although one that has not been taken up to any great extent, by the public, or overall.

The commission judges, in the first instance, the application and the case that is made in it. One has to rely on what is in the application. One cannot introduce ulterior matter for consideration. We are not lobbied - the word 'lobby' was mentioned. I warned against any of that being taken on board. I have always tried to canvass the possibility of conflict of interest arising at every crucial stage. If I did not do that, I know that I would be reminded by the chief executive that I must do it. It just does not happen that way.

There is one part of the process to which the committee may not have referred. Namely, when the applications come before us, we are given résumés of the documentation. It does not tell us what way to make the decision but rather is an analysis of the documentation which is prepared by the executive on the matter. So, we are solicitors in that context. The committee makes an analogy on the assessment in respect of some of the local authority work that is done.

We have an expert body of people, employed by the commission, to give us assistance should it be required on any aspect of the matter. That expertise is available but the ultimate decision, as far as we are concerned, must be on the basis of what is put before us. I come from the west and of course we listen to radio stations throughout the country. If I travel anywhere in the country, I always listen to the radio stations to hear what they broadcast.

Each of the applications usually includes a sample of the type of music, news and other output that is contemplated by the applicant. It is the obligation of every member to listen to that and to take it into consideration. That is done in each case. It is not a matter of quick decisions being made on the basis of scant or little understood——

Sorry to interrupt, but are the people who advise the commission external personnel or in-house?

Mr. Maguire

It is an in-house executive.

I do not want to be too specific about this but it is nearly impossible to deal with it without being somewhat specific. A question was asked about the hand over, as it was described, or the procedures when a licence is not renewed. We said, and it was commented on by Senator O'Meara in the report, that we would be sympathetic to views on how this issue might be addressed in future. We are conscious that there can be problems in this regard. We try to deal with them having regard, first, to the right of the incumbent to an orderly cessation of business and, second, to the right of the successful applicant to have an orderly start up of business. There is nothing vindictive and no ulterior motive when dealing with this. We seek to deal with it on a sensitive and fair basis, having regard to the rights of both parties.

We would welcome any views or recommendations the committee might have in respect of that procedure because it is obviously a difficult matter. When one makes the decision one must take the consequences and the consequences can be severe for some of the people involved. We are aware of that but we must discharge our duty as we see fit.

Mr. O’Keeffe

I will deal with the point about the extension of contracts. We are dealing with that at present. The contracts of both stations, CKR FM and Radio Kilkenny, expired during September. Both approached us to extend the contract for a period. We considered it at the board meeting in early September and agreed to extend it subject to a number of conditions. CKR FM accepted the conditions and the contract was extended. Radio Kilkenny has had difficulty with some of the issues which were referred to earlier. There has been further correspondence and I am optimistic that we will be in a position to resolve the issue and that the contract will be extended. However, further discussion is required with the station.

Our primary objective, which we stated in our initial letter to both concerns, was that the listeners in Kilkenny, Carlow and Kildare would continue to have a broad based local radio service. Pending the introduction of the new services, subject to the appeal by the two people not being successful, we were mindful that there should be local radio service in those areas. That was the principle behind granting the extension. Clearly, the timing of the licence was facilitated. We considered an 18 month period but the court cases, which have been ongoing for about a year, have meant that we have over-run the period where the old licence expired and the new licence should have taken over. However, we are having discussions at present and I hope there will be a resolution.

I welcome the members of the commission and congratulate them on their work. The submission is professional and, in my view, the board and the staff are doing a good job. The commission only came to my attention recently with regard to the procedures for the renewal of licences. Overall, as far as the members of the public who come to me are concerned, the BCI is doing a good job and is composed of professional, hard working people.

The commission should look again at the procedures when a licence is not renewed. In circumstances where there are no complaints and the public and staff are happy but the BCI does not renew the licence, the BCI should consider providing some form of appeal mechanism. Other than that, the BCI is doing an excellent job. I am delighted to meet the members this afternoon and to hear their contributions. I am pleased with how they are answering the questions put to them. We are aware they cannot answer questions on the legal problems.

I welcome the members of the BCI. The 2001 Act provides that the commission shall endeavour to ensure that the number and categories of broadcasting services best serve the needs of the people of Ireland, bearing in mind their languages and traditions and their religious, ethical and cultural diversity. The commission's policy informs the decisions it takes. I am here today to deal with one issue but I am aware that this issue is subject to judicial review. I will, therefore, confine my questions to policy and how policies are reflected in the decisions the commission has taken.

The issue that concerns me is the decision not to award the licence to North West Radio. Everybody knows that is the reason I am at this meeting but I will try to deal with the general issue rather than the specifics. If a station has a listenership of 70%, it must be considered an objective measurement. We have heard much talk today about subjective and objective measurements and judgments. If certain radio programmes, even if they are shared, are the most popular in the country, that must reflect the traditions and religious, ethical and cultural diversity, as mentioned by the Act, within the region. The Chairman said earlier that the worst option is a top down radio station that is not in demand. To turn that around, the best option is a bottom up radio station that is in demand. That has not been reflected in the commission's decision.

We have seen decisions by the BCI where radio stations with a listenership of approximately 30% have been awarded licences while those with a listenership of almost 70% have not. There is no consistency here; it does not make sense. I accept that it is only one measurement but, in a context where many of the measurements are subjective, an objective measurement which is arrived at by an outside independent body should weigh heavily when making a decision.

The next issue I wish to discuss is the concept of independent research. Members of the commission suggested that there was no need to have independent researchers to research independent research already given to the commission. I beg to differ. Applicants engage consultants to make their case. If the commission were to look at applications for the same franchise area, it would find widely different results within that information. Independent assessment is required. One applicant may say listenership is 40%, while another may say it is 70%. Surely an independent assessment is required. What happens if information presented to the Broadcasting Commission of Ireland is misleading rather than incorrect, and the information is then used as a reason by the board for making its decisions? I would quote one line from the minutes of the BCI's meeting where it was stated that a particular franchise applicant - I will not name them - had presented a strong case in respect of the demographic changes in the franchise area over the next ten years.

If one is to present any information on demographic changes, one should only use census figures because they are the most accurate. In that context the census figures for 2002 were not available at that time. If one is to examine demographic changes, one must look at the census figures from 1996 to 2002 because looking any earlier does not provide an accurate picture of such changes. The figures were not available at that time but they have become available in the meantime. The suggestion regarding demographic changes was that there would be a need to cater for a younger audience.

Anybody examining demographic changes and these figures will know that the population is ageing. However, in County Sligo, between 1996 and 2002 the number of people aged under 35 remained relatively static. In fact, I think there were 60 more but the number of people aged 35 and over increased by 3,210. In other words, that is a clear indication that we are an ageing population. In County Donegal the figure for those aged 35 and over rose by 7,284 between 1996 and 2002, while the figure for those under 35 remained static. That indicates that if information on demographic change is going to be used as a basis for making the licensing decision, as I quoted from the minutes, it must be correct. If it is not, there should be an independent assessment. If it is not within the remit of the board to do so, such an assessment should be bought in.

The issue of appeals was raised and I feel that the cost of a judicial review is very important. The BCI should not be the final arbiter. Deputy McGuinness raised a hugely important point when he spoke about the massive transfer of resources that is based on a decision taken by six people. We are talking about €4 million or €5 million for a local radio station, which is a huge transfer of resources. There should be an appeals process. Mr. Maguire said that the board has a wide range of interests and expertise and I have no doubt that is the case but if there is a quorum of five and a number of them are missing, there must be gaps in that expertise. It is critical to have such an appeals mechanism in order to ensure accountability and transparency. I was surprised that the BCI did not support it. Mr. Maguire said that, "you cannot assume that the original decision and the appeal decision will be the same". If that is the case there is something wrong with the process because one should be able to assume that they would be the same.

In the case of a split decision the chairman has a casting vote, and I understand that is in order. My personal opinion is that in such a situation the chairman should go with the status quo.

Deputy McGuinness talked about the importance of recognising the local scene when the BCI is taking its decisions. Local radio is a lifeline for many people. Mr. Maguire said he listens to local radio when he is travelling down the country but I feel he is not close enough to the people and many people in the area I come from also have that perception about the BCI.

I have absolutely no doubt about the level of commitment or the amount of effort that is put in by the board's members. Mr. Maguire said that his views are sincerely held. I have no doubt about that but are they fully informed and are they supported by good independent advice? That is crucial in making what I consider should be an objective and accountable decision.

I join my colleagues in welcoming the members of the Broadcasting Commission of Ireland and thanking them for attending the committee. Deputy Harkin has asked many of the questions that I wanted to pose, but I will re-iterate a number of them. The secretary of the BCI, Ms Craig, said it was most unusual for the commission to make a licensing decision with less than eight board members, yet, as Deputies McGuinness and Harkin have said, in two or three cases crucial decisions - which were going to cause a major upheaval in transferring a large amount of money from one consortium to another, and change the whole configuration of local radio - were made by six members. While technically that might be correct, morally and procedurally it was wrong. Any meeting held where only six board members were present to make such a crucial and vital decision should have been adjourned at least until such time as eight members would be present. I know that technically the board might be in the right to take such decisions with only six members but morally the procedure was wrong and wrong decisions were made as a result.

Mr. Maguire said that lobbying is not allowed but has he, at any stage, been approached by any competing interests - I am talking about applicant stations - in advance of a submission being made, or, to his knowledge, has any member of the board ever been approached either by an applicant station or by a politician or a particular political interest?

Looking at details of the manner in which licences were being awarded and the commission's observations, dual or shared programming seems to have been a militating factor against certain stations, whereas in other instances it seems to have been disregarded. I will provide a case in point concerning Northern Sound/Shannonside which has a huge element of dual programming, yet in the case of other licences in the minutes of the meeting and in Mr. Maguire's subsequent vindication of the decision taken by his commission, it became a major issue. JNLR is the expert in deciding who is listening or not, regarding the efficacy and popularity of a radio station. Surely the JNLR figures must be hugely important in determining a decision as to whether someone has a 60% or 70% rating or is coming from a standing start.

While it is not written down, it is accepted that standing orders for virtually any committee deem that given a split vote, the chairman - notwithstanding his previous decision - usually votes for the retention of the status quo.

Companies which have been granted licences have until next September to get up and running. Is the commission in contact with the companies to see if any cheques have been written, what preparation has been made, whether land has been acquired, studios are being built or staff are being hired? Is the commission monitoring what is happening with these companies?

An issue that has arisen around determining licences concerns breaches of the advertising regulations. How many of the stations that succeeded in retaining their licences have been found by the commission to be in breach of their advertising regulations? From the point of view of advertising on local radio, it is ridiculous that RTE, for example, can accept advertisements from political parties at election time.

Mr. O’Keeffe

Political broadcasts, but not advertisements. Local radio stations can broadcast party political broadcasts, as can RTE, but they cannot accept paid advertisements.

I can advertise the roster of my clinics in Mayo in the Connaught Telegraph, The Western People or in the Mayo News but I cannot advertise it on local radio.

Mr. O’Keeffe

The Act states that no political advertising is acceptable. I respectfully suggest it is a matter for the Oireachtas to deal with rather than us.

If a political party or a politician, for example, is holding a function in a pub or wherever, they cannot place the advertisement on local radio.

Senator, you know that is a matter for the legislation.

I do, but it is ridiculous. It is something we will address when we get to the legislation itself.

The Senator will have many opportunities.

I wish to make a point forcibly made by my colleagues. I am looking at the qualifications of members of the commission. Mr. Maguire is a senior counsel and a very good one, because I have seen him in operation. Members of the commission include a member of the Human Rights Commission, the director of a college, a senior partner in a company, a barrister, a chartered accountant and financial consultant and a rights commissioner in the Labour Relations Commission. Irrespective of what kind of in-house expertise the commission has, there is an obvious and glaring need for proper quality advice on the merits or demerits of applications and applicants which come before it. That is a sine qua non.

That is a matter for the Minister, the Government and for the new legislation.

I am sure the committee will be sorry to hear of the death earlier today of the chairman of Mid-West Radio, Sean Kelly, who was a sturdy and doughty farm leader, social partner and, in recent years, especially in relation to radio, a leader of the community. He led the fight to secure the future of Tipperary Mid-West Radio. He was a shrewd man and, unlike those in some other radio stations, he did not take the BCI to court, although he was very unhappy, as Senator O'Meara said earlier, at the imposition of community as opposed to commercial status.

It has been an interesting afternoon. I am not a member of this committee but I came to listen because local radio affects all parts of the country and it has been a serious issue in the Tipperary area. It has been instructive to have this submission and to listen to the answers. This session is bound to give some reassurance and confidence. Obviously, there may be further questions which need to be resolved as to how the system operates, because one of the biggest complaints was lack of transparency. We have a better idea of how it operates having listened to the contributions this afternoon.

I have one or two specific and, I hasten to add, factual questions. I really want my understanding confirmed. Have the licences of all community radio stations, including Tipperary Mid-West Radio, been extended to 2005?

Mr. O’Keeffe

No. It has submitted an application for a new——

For an existing licence. It has not been extended to 2005?

Mr. O’Keeffe

No.

On that application, presumably applications were invited and there was a closing date. How many applications have been received for that particular area?

Mr. O’Keeffe

One.

Is it correct that any licence awarded on foot of that application will run for ten years?

Mr. O’Keeffe

Yes.

Would that be from 2004 or 2005?

Mr. O’Keeffe

From 2004.

I make a plea that the commission does everything possible to ensure that the radio station, which has operated successfully for 20 years under different guises - it was one of the pioneers in this area and is much valued by its listenership which is spread over a wide geographical area of more than one county - is facilitated to enable it to operate in a sustainable way and maintain employment.

Mr. Maguire, I am sorry to ask you to answer the four sets of questions but we are running out of time and I know some members have journeys to make this evening. I do not think we will finish this evening but we will study the transcripts and maybe at a later stage, we will talk to you again because this has been a tremendous learning process for both sides.

Mr. Maguire

I will do my best to answer the questions. If I miss any, it will probably be due to my bad note taking. It is hard to listen to the questions, take notes and try to understand exactly what one is being asked at the sametime.

I wish to deal with Senator Higgins's question first because it is most important. He asked whether I or, to my knowledge, any member of the board had been lobbied by any of the applicants on the licences. I wish to state categorically the answer is no. To my knowledge, neither I nor any member of the board was lobbied. If they had been and revealed it or if I became aware of it, I would ask them to disqualify themselves from the process provided it was not something minor somebody said to them. If there was anything to it, I would ask them to disqualify themselves from the process immediately. That has not arisen. I do not know if that provides any reassurance in that regard.

I have a difficulty in respect of both questions asked by Deputy Harkin and Senator Higgins on those matters. In a way, if I was to answer them, I would be arguing the case on the decision that was made specifically in relation to North West Radio. I will try to deal as best I can on a general basis with the issues raised but I have to deal with them in principle rather than on a specific basis. On the question of the appeals, Deputy Harkin said that one of the arguments I used was that the outcome of the appeal might be different but that I should assume it would be the same. If I was to assume it would be the same, I would not see the necessity for an appeals board.

Mr. Maguire said one cannot assume the original decision and the appeal will be the same. That makes the presumption——

Mr. Maguire

Deputy Harkin is saying I should assume that. If I assumed that, then there would be no need for an appeal.

Mr. Maguire is then saying the original decision might turn out to be incorrect. If that was the case, then surely there should be an appeal.

Mr. Maguire

Dealing with the first proposition, if I was to assume the decision would be the same, which is what Deputy Harkin said, then the logic falls down. On the second point - I have already said this and I will not go on too long about it - my submission is a simple one in that if there is an assumption that it will be different, which is the one the Deputy picked up on, that means that in each case, there will be an appeal because the disgruntled person who has not managed to get the licence will, inevitably, appeal. That means when the original decision is overturned, the person is left in a position where the board has considered the application and has come to a different conclusion and he or she will be equally disgruntled. Inevitably, there will be further appeals.

It is reasonable to assume the number of appeals in this scenario would be no greater than the number taken through the courts. Only people who feel they have a strong case will appeal. If that is the case, so be it. I do not have a problem with that.

The Minister indicated recently there is a need for an appeals system and we might leave that issue alone for the moment.

Mr. Maguire

If that is the position, perhaps I should go on but there is a time constraint in respect of it.

I am sure Mr. Maguire is aware of the Minister's statement.

Mr. Maguire

Up to a point, which is another way of saying "no".

Did Mr. Maguire hear the Minister saying that?

Mr. Maguire

He raised it as an issue as opposed to deciding as a matter of certainty that there would be a question of an appeal.

He made a statement about it and supported a number of——

Mr. Maguire

There is a distinction to be drawn between the matters that are part of the judicial review process and the conclusions that are reached by the board. If I was to respond to the points and suggestions made by Deputy Harkin regarding the Sligo licence, I would be arguing the case and I do not intend to do so. As far as the question of research is concerned, it should be borne in mind this is a multi-stage process. We are going from the expressions of interest stage to the applications process. The application is made, an oral hearing is held, which is followed by written questions and answers, and all this takes place before the decision-making process engaged in by the board. On the aspects of the case that are being considered, there is expertise within the BCI, which is ignored to a large extent, to evaluate whether there are deficits and problems in regard to research that is carried out. I do not want to say any more than that and I will argue the toss when the case is over.

Senator Higgins dealt with matters that are a discreet part of the case, two of which related to dual programming.

Mr. O’Keeffe

A number of issues raised, including dual programming and breaches, are part of the affidavit and the statement of grounds that North West Radio has put before us and we must respond to those in the court process. We are not in a position to comment on them.

Mr. Maguire

I cannot take issue with Senator Higgins on particular facts but I do not accept that the board members or myself do not do everything possible or necessary in the circumstances to inform ourselves fully of any decision on the matters that are at issue in any application. If we do not get the information required in the initial application or at the oral hearings - I conduct the questioning and try to cover every issue - we make certain, after consideration of what has been submitted, to ask for it in writing. The record will show that we did so. This process is available on the Internet and on hard copy for anybody to see.

Both Senator Higgins and Deputy Harkin mentioned voting with the status quo. I take issue with that view. If we are a licensing body and I come to what I believe is a sincerely held and properly informed decision on the way in which I should vote, then it is logically overwhelming that I should stick with my views in that regard. That is a difference of view that can only be answered in one way.

Breaches of the licensing regulations relate to the particular case. The question on advertising on local radio has been answered.

Is the commission monitoring the successful applicants on compliance with the deadline of September?

Mr. O’Keeffe

We had initial contact with them. When an application is successful, we write and inform the successful applicants. The next stage is to commence the negotiation process, which, in normal circumstances, takes six months. However, in a situation where we are judicially reviewed, as is the case with North West Radio, we are constrained by the courts in proceeding with the contract negotiations. We will not be in a position to advance the discussions with the successful group in the north-west region until the court issue has been dealt with.

There will be a vacuum?

Mr. O’Keeffe

No, North West Radio's licence runs until September 2004. Our intention is to conclude the courts process by that point.

Will there be a vacuum elsewhere?

Mr. O’Keeffe

It is never our intention to have a vacuum in any part of the country.

Will there be a vacuum?

Mr. O’Keeffe

We should be through thecourt process by then, so there should not be a vacuum.

I thank Mr. Maguire, Mr. O'Keeffe and Ms Craig for attending the meeting. The BCI has agreed the accounts format with the Comptroller and Auditor General, which will facilitate the publication of its annual report. We may invite the BCI to appear before the committee to discuss the report when it has been published. When we receive the transcript of the meeting, the committee will meet in private session to discuss the BCI's presentation and response, which will assist to formulate our own report. This will finalise the radio module of our brief. The report will be sent to the relevant Government Department and laid before the Houses.

Mr. Maguire will be entitled to comment on the report and we will not mind how he comments on it. We would like to see him again. I have no doubt, given that a number of the commission's members will transfer to the Broadcasting Authority of Ireland, we will see them on a statutory footing in the future.

Will the Department make a presentation on the draft legislation?

Absolutely.

The sub-Committee on EU Scrutiny has forwarded a number of proposals for the attention of the committee. Is it agreed to scrutinise COM (2003) 319? Agreed. Is it agreed that COM (2003) 175, COM (2003) 349, COM (2003) 384, COM (2003) 417 and COM (2003) 419 do not require further scrutiny? Agreed. Is it agreed to advise the Sub-committee on EU Scrutiny that this committee has no observations to make on COM (2003) 270?

Should we examine it quickly at some stage? It involves public service obligations and it cuts across almost all the issues of concern to the Department and the committee.

I am advised that the closing date for observations has passed and I must put the proposal formally to the committee. There was considerable scrutiny of EU legislation last week. Is the proposal agreed? Agreed.

I thank Mr. Maguire. Does he wish to say anything in conclusion?

Mr. Maguire

On behalf of the members of the commission and the executive, I thank the committee for the opportunity provided for us. The Chairman said he found some value in the submissions we made. We hope the matter will be dealt with in light of those submissions. Some background documentation is contained in the annexe with which, from our perspective, it is extremely important that members would be familiar before they make a decision in respect of any matters they recommend. That said, we are aware that policy is entirely a matter for the committee. I hope the members can see our decision-making process and the way in which we operate in a better light as a result of today's proceedings.

I thank Mr. Maguire for that. I also thank him on behalf of the committee for the work of the board and all the staff of the commission from the chief executive down.

The joint committee adjourned at 5.32 p.m.sine die.
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