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JOINT COMMITTEE ON COMMUNICATIONS, MARINE AND NATURAL RESOURCES díospóireacht -
Wednesday, 13 Jul 2005

Broadcasting Legislation: Presentations.

Before I welcome Mr. Seamus Dooley, I wish to state that today the joint committee will hear presentations on broadcasting legislation. The joint committee wishes to review the issues that should be considered in the context of the proposed new legislation on broadcasting. Its task today is to allow the parties to the debate to outline to members the issues which they consider should be addressed in the forthcoming legislation. We will hear presentations from RTE, TG4, TV3, NTL, Chorus, the Irish Hard of Hearing Association, City Channel, Setanta, Northwest Television, Screen Producers Ireland, the Broadcasting Commission of Ireland, BCI, Dublin Community TV, the Community Radio Forum of Ireland, the RTE trade union group, Sky and the National Union of Journalists, NUJ.

Each group was invited to make a submission to the committee and will have an opportunity to make a short three-minute to five-minute presentation on the issues it considers to be of critical importance. This will be followed by a question and answer session which will tease out these issues. The joint committee will issue a report that will include the submissions made and the transcripts of the evidence it hears today. It will set out in a tabular format the issues that should be addressed in the forthcoming legislation.

I advise members that the joint committee must complete this morning's session by 11.15 a.m. as the room is required for a meeting of the Committee of Public Accounts. Accordingly, we will suspend the meeting at 11.15 a.m. and resume in committee room 4 at 1.30 p.m. Therefore, before we begin I advise everyone that I will strictly adhere to the timetable and will not allow any presentation exceed the allocated five minutes. The joint committee will complete this session at 10.25 a.m. I ask that all mobile telephones be switched off.

I wish to draw attention to the fact that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Under the salient rulings of the Chair, members 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 thank Mr. Dooley for his submission, which I read last night, with all the other submissions. Mr. Dooley made submissions to this committee in the past. Will he begin by introducing his committee?

Mr. McCall will introduce everyone.

Mr. Barry McCall

I am cathaoirleach of the Irish executive council of the NUJ, which is the supreme executive body of the union in Ireland. I have extensive experience in the independent broadcasting sector. I am joined by Kieran Garry, who is producer on "The Last Word" with Today FM. Prior to that, Mr. Garry spent seven years with RTE. I am also joined by Mr. Paul Ferris from FM104, who is chief reporter with the station and its FOC or shop steward in the NUJ. He has six years' experience in the independent commercial radio sector. In addition, I am joined by Mr. Seamus Dooley, who is the Irish secretary of the NUJ, whom I believe needs no introduction to this committee.

I am conscious that the committee is under time constraints so I will not read out the executive summary. I know that the committee is a conscientious one and that members will have read the submission. I am anxious to highlight one or two points and be available for questioning. The make-up of our delegation reflects the fact that the NUJ represents journalists in both the commercial radio sector and public service broadcasting. Members of the committee will have the opportunity to hear the members of the RTE group of unions. I am a member of this grouping, engaging in the anti-union practice of double jobbing today.

A cornerstone of broadcasting quality must be the maintenance of the public service ethos. The NUJ is not opposed to commercial radio or television. It organises within the commercial radio and television sector where it is allowed. There are distinct differences between public service and commercial broadcasting. The obligations imposed upon public service broadcasting are, as members appreciate, very different from the obligations imposed on a commercial broadcaster. Therefore, we have grave concerns about the notion that there will be a single regulatory authority adjudicating, using the same slide rule to assess both bodies. We believe the idea of recreating the Broadcasting Commission of Ireland and using it as a model for a single regulatory authority would be a major mistake.

The new authority must develop two related yet distinct regulatory panels, one of which deals with the issues of public service broadcasting and one which deals with commercial broadcasting. It is not possible to use the same slide rule to assess standards of performance in the two broadcasting sectors. We have very serious reservations about the notion that the new super regulatory authority would also be responsible for issuing franchises. We do not believe that the issues of franchises and regulation should come under the control of the same body. There is a clear conflict of interest. A broadcasting managing director or station executive dealing one day with a regulatory authority could find that this same authority would be in a position to adjudicate on the station's future licence. The concept of a single body acting as a content regulator and licensing agency is not appropriate.

In any future licensing arrangements, questions relating to the transfer of undertakings for broadcast professionals working within the independent sector must be set out in clear and unambiguous terms. I am open to questions regarding this issue. A person employed in local radio could devote himself or herself to a commercial radio station in the sector, the station could lose the franchise and the employee could find himself or herself turfed out on the street and may or may not be employed. He or she is likely to be employed on new terms. We have had experiences where licences have been lost in the commercial sector and where negotiated NUJ house agreements have been set aside where staff have either not been employed or employed on inferior terms.

We welcome the invitation from the Broadcasting Commission of Ireland to respond to the review of its policy regarding statutory news and foreign affairs requirements. We are opposed to the concept that a waiver would be granted to new applicants arising from the issuing of licences. The 20% requirement for news and current affairs is reasonable, particularly given the elastic nature of the definition of news and current affairs, which can include paid for death notices. Changing this requirement for new entrants would be anti-competitive and would put existing stations at a commercial disadvantage. Derogation for new entrants to the market would place existing stations at a competitive disadvantage.

TG4 has been highly successful and is innovative. The NUJ strongly believes that the proposal to set TG4 adrift or to impose a new authority specifically for the station would be an unnecessary duplication of resources. There is nothing to suggest that TG4 has been impeded in any way by its current link with RTE. We believe a more imaginative approach could be used to give TG4 greater autonomy without breaking the link with RTE completely. We believe the duplication of resources, which would result from the creation of the two authorities, could be counterproductive and would lead to a loss of revenue in administration, which could be used in programme making.

These are the main issues which I wish to address in my executive summary. I have identified local radio and the independent media sector as low pay sectors. The question of pay and conditions has been missing from the debate on broadcasting in Ireland. It is interesting that some of the groups coming before the committee today — I am conscious that I am not covered by the privilege enjoyed by committee members — are companies which have steadfastly refused to provide union recognition. As recently as this week, I have read frightening memoranda from leading media organisations threatening people who join the NUJ. In a market where pay and conditions are a problem, the issue of employment, both in terms of transfer of undertakings and union recognition, needs to be addressed in some forum. The Broadcasting Commission of Ireland clearly believes, and has stated its belief, that this is not an issue for the regulatory authority. In the context of granting licences, recognition of trade unions and a guarantee of best practice in employment, a guarantee which there is no difficulty getting in the public sector, should form part of submission hearings.

Ofcom is the regulator in the UK.

Has Mr. Dooley looked at Ofcom's model?

We have looked at Ofcom in some detail.

Is that working?

I have some reservations about the way in which Ofcom operates. As a trade union, we would very seldom look to the UK model of regulation.

The Broadcasting Commission of Ireland will argue later today that the European Commission requires one independent regulator to regulate the entire industry. I hope Mr. Dooley will be able to stay for that part of the session.

One can have one regulatory authority but there needs to be separate panels within that structure. There must be a structure that separates the obligations of public service broadcasting and commercial broadcasting. They are two distinct functions. The threat to public service broadcasting throughout Europe is coming from those who believe that communications and broadcasting represent a licence to print money. We are coming from a different perspective, which is that in reviewing broadcasting legislation, the wider role of broadcasting and the protection of public service broadcasting are of paramount importance. This committee, through the way in which it has approached its deliberations in the past, has recognised this. There is an obligation on a public service broadcaster to ensure that community events, political events and events of minority or imagined minority interest are covered. This is very different from the obligation on a commercial provider, which is to make money for the board. There is nothing wrong with this, provided one appreciates the distinction.

Does Mr. Dooley see a role for ComReg in the area of regulation?

ComReg has a specific remit, which may be different from that in broadcasting. There are probably lessons to be learned from the way in which ComReg has regulated. It is very difficult within the communications industry in Ireland to avoid conflicts of interest. They arise in terms of players in the communications market regulated by ComReg — for example, where people have interests in independent radio and where newspaper groups have shares in local radio and in the communications industry there is potential for conflicts of interest.

I have read TG4's presentations and it will today argue that it is looking forward to being independent.

There is a certain understandable philosophical approach to the notion of independence. Our primary concern is how one avoids the duplication of resources.

Mr. Dooley's statement about such a regulator is interesting. Am I correct that there are two roles, a franchising role and a programme regulatory role? Would it be possible to have a single regulator of the actual content across commercial and public service broadcasters, programme regulation as it were? Mr. Dooley does not object to the idea of a single regulator in principle. Franchising introduces commercial aspects and, in a sense, is a different role.

I am going further than that, I am suggesting that even if one has a single regulatory authority, one must probably have two panels, the first dealing with private broadcasting and the second with commercial broadcasting. This is a suggestion that is dealt with in greater detail by the RTE unions in their submission and that we put forward in the past. There are different obligations that must be worked out. My primary concern is keeping content regulation and licensing separate, but clear distinctions must be made by the regulator in regard to commercial and public areas.

In a sense, there are three bodies, namely, the two panels in the programming body, one for public and one for commercial, and a franchising regulator.

The franchising regulator is one body that essentially deals with one job. It is possible to have a model of a regulatory authority with two wings. I am conscious that any regulatory establishment must be clearly defined and does not need to be bureaucratic. I am concerned by the concept of one body judging everyone by the same rules because there is a difference that must be appreciated.

On the one hand, Mr. Dooley is saying that he has a concern about possible costs in terms of regulation and of TG4 being an independent body while, on the other, this seems to create separate panels or bodies on a relatively small island that already has a number of other regulators, such as ComReg, that carry out a similar type of work. We are generally trying to cut down the amount of bureaucratic administration but this would leave us with four or five regulatory bodies.

The reason I am making the suggestion in respect of TG4 is that we believe the establishment of the body is unnecessary. The cost involved in protecting the public ethos is worth it.

Taking into account TG4 with RTE, one is still left with four bodies.

We have grave concerns about the Broadcasting Commission of Ireland at present. The manner in which licences have transferred, the way in which there have been mergers, indicates a danger of a super-broadcasting authority under the aegis of the BCI, which has not worked in the way we would have wanted. While it would be administratively convenient to superimpose the BCI, there are concerns about the loss of the community dimension in independent radio, for instance. I am less obsessed with structures than I am with what the outcome will be at the end of the day. Our concern is that any body that regulates broadcasting must make a clear distinction between the requirements of commercial broadcasting and the public service.

Where did the problem with the BCI come from? Why did it not uphold a community interest? Was the failing in the structure?

The issue I mentioned is that we look on broadcasting as being more than a means of making money. If one examines what has emerged in the commercial radio and provincial newspaper sectors, one would see the emergence of a small group of dominant media interests that are purchasing media outlets, including radio stations. For example, if one examines how stations in the midlands have been taken over by Radio Kerry, there is a focus on the radio licence as a means of making money. The Chairman and committee members will recall that when the IRTC was first established, it was found necessary to include local community leaders on its board, for example, church leaders. There was a genuine attempt at community participation that has been lost with the emergence of media groups with commercial agendas only. This fact was not taken on board by the BCI when examining recent radio station mergers.

Were statutory directions incorrect? Where was the failing?

The question of failure should be directed to the BCI. I draw the committee's attention to one of the issues raised in my report, namely, the absence of any worker participation in or ICTU nomination to the board of BCI. I do not have access to the decision-making process of the BCI. Greater transparency in how decisions are reached on licences is something I would welcome. From my discussions with Members of the Oireachtas, they would welcome this transparency. For example, there was much concern surrounding the discussions on the transfer of the licence in the Kilkenny matter. I am not making an adjudication on who got the licence but there were issues concerning the absence of clear criteria. We have received a number of challenges in the courts. We clearly need greater transparency.

Mr. Dooley is appearing with the RTE trade union group.

I hope to be a silent witness.

I am a member of the National Union of Journalists — some people may not be aware of that fact. I welcome Mr. Dooley and his colleagues.

Is the Senator still a member?

Yes. I totally agree with Mr. Dooley's comments in respect of transparency of decision-making. As I am sure he is aware, this committee has carried out a report on the key issue of licensing local radio stations. There must be a measure of transparency around decision-making due to the value of licences and their impact, as Mr. Dooley has outlined. I will not rehearse everything he has said. The threat to public service broadcasting has always been there. When one examines the facts, RTE remains the dominant player in the market even though there has been some chipping away at its radio audience figures. Where is the stretch of public service broadcasting? RTE is surviving extremely well in the market.

I am glad Mr. Dooley raised the significant issue of pay and conditions. Perhaps the Chairman would like to say something on the question of whether the regulatory authority would have a role in this area or if it is more appropriately dealt with in the context of ICTU, national wage agreements with the Government and the right to join a union. I am not sure these are dealt with in the context of this authority.

I want to finish this session immediately after these questions. Senator Leyden is representing Senator Kenneally today.

RTE has survived and is thriving, part of which is due to the security granted by the licence fee increase. The committee's support for this is appreciated. There is a constant threat, one for which we will always be vigilant in the context of new structures rather than existing ones. I am aware that in the commercial field in which we operate, RTE would always be vigilant. Its commercial competitors would understandably watch every legislative development to ensure RTE is not granted any favours. I am not looking for favours, only to ensure the public service is protected in future legislation. If we have legislation governing union recognition, if we have a social partnership model and if there is an applicant for a licence increase, or a franchise to engage in any activity, it is acceptable that the authority ask the company whether it will allow employees to join a trade union if requested.

Would Mr. Dooley make it a condition?

I would, as this issue is similar to the way in which codes govern ethical behaviour. I believe this is reasonable though I do not suggest membership of a union should be mandatory. If employees do not want a collective agreement or to join a trade union, that is correct. From the sorry experience of the National Union of Journalists, NUJ, the issue of pay, conditions and union recognition within national broadcasting and local radio is an issue that has dominated the agenda. That has meant that local radio stations and the commercial television sector have tended to lose staff at a very high rate. In the national commercial television sector I lost seven members of my NUJ chapels to RTE. They are in secure employment and are active NUJ members but the system would be better if proper pay and conditions existed. The commercial radio and television sector would flourish in this scenario and the viability of such services would increase, particularly in the regions.

It is important that experienced people with professional training are able to afford to work in the commercial sector. That benefits the commercial sector and some of the employers in that sector are good and have collective agreements. Some of these employers are represented here by my colleagues. This issue is reflected in quality as there is a link between good pay and good broadcasting and journalism.

I have to finish this session. The delegation has sent in a very comprehensive presentation and I thank it for doing so. Due to time constraints we cannot take further questions at this point.

Without suspending, we will now take a presentation from Mr. Mark Deering and Mr. Richard Freudenstein of BSkyB, whom I welcome. We have not received a presentation from the delegation.

Mr. Richard Freudenstein

Good morning, Chairman and committee members. We have not yet made a submission to the committee but we would like to make some opening remarks which will allow for general questions.

We asked the delegation for a submission, did we not?

Mr. Freudenstein

It was suggested that we make one.

No, it was not suggested, we asked for a submission. Is that not correct?

Mr. Mark Deering

We understood it to be a request. Given that there was an absence of specific draft legislation——

It is helpful for us to have a presentation as this forms part of the documentation when the committee has finished. If there are any items we do not discuss today perhaps these can be forwarded to the committee.

Mr. Freudenstein

Certainly, if this is acceptable to the committee. Once we understand the broad thrust of the committee's questions we can make a submission.

Before beginning, I advise members and witnesses that I will adhere strictly to the timetable. The presentation would normally not exceed five minutes so I suggest that Mr. Freudenstein give a brief overview of the company and its activities in Ireland for two to three minutes. After that, members can ask questions.

I request that all mobile phones be turned off. I draw attention to the fact that while members of the committee have absolute privilege this privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Under the salient rulings of the Chair, members 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.

For members engaged in other business prior to the commencement of this meeting I advise that we must vacate this room at 11.15 a.m. We have one other session with the RTE unions after BSkyB. There is a PAC meeting at 11.30 a.m. and we will resume at 1.30 p.m. with other groups.

Mr. Freudenstein

I am Richard Freudenstein, chief operating officer of BSkyB and this is my colleague, Mr. Mark Deering, director of Sky Ireland. I thank the committee for the opportunity to appear before it. I wish to make some remarks on the background of Sky in the UK and Ireland. The committee has received a copy of our fact book which gives some information on the company. Sky is the largest provider of pay TV services in the UK and Ireland. It is a public company in the FTSE top 30 in the UK. It is 36% owned by News Corporation and the remainder of its shareholding is spread between pension funds and other institutions. It launched its analogue service in 1989 and its digital service in 1998. As of the end of March, the date of our last published results, it had 7.7 million subscribers and 355,000 subscribers in Ireland, which is 26% of all Irish households.

Sky prides itself on providing a range of choice and diversity to its customers. There are currently 400 television and radio channels available on the digital satellite service along with a range of interactive services. Sky also prides itself on technical innovation and being leaders in the television sector in this respect. As well as being the first company to have launched digital services in Ireland in 1998 and having invested large sums of money to drive digital television, Sky is now investing in new products. One of these is the sky plus box, a digital video recorder, a hard drive in a set-top box that performs the same functions as a video recorder but in a more simple fashion. At the press of a button, one can record a programme, pause live television, fast forward or rewind through programmes. It is a popular addition to many subscribers' viewing habits and is very successful with our customer base.

Sky also plans to launch high definition television in Ireland. This will be a step change in our customers' viewing habits. High definition provides a new viewing experience with a much sharper picture. The satellite platform is well suited to high definition television and Sky intends to launch a wide choice of high definition channels. With these innovations we look forward to the continued growth of our business in Ireland in the coming years.

Ireland is one of the leading European countries in digital television. There are over 500,000 digital television subscribers across the cable, MMDS and satellite platforms, representing 38% of all Irish households. This places Ireland second only to the UK in respect of the percentage of households with digital services. Sky represents 68% of those households. The significant investment made in Ireland, which runs to hundreds of millions of euro, in the roll-out of our digital satellite platform has greatly contributed to this high rate of digital satellite penetration.

The establishment and maintenance of a stable, market-led, commercial environment is necessary to encourage further investment by new and existing service providers. To date, the current commercial, legal and regulatory regime has been conducive to fostering such investment, facilitating the rapid roll-out of a range of quality digital services to consumers. Given the absence of specific details about future legislation we have not made a submission to the committee. However, we are happy to answer questions and will follow up with a written submission as required.

For clarification purposes, is it correct that Sky is regulated in the UK?

Mr. Freudenstein

That is correct.

Under the Amsterdam treaty the company can choose to be regulated in its home country. Does it subscribe to the Broadcasting Commission of Ireland, BCI, standards set down in Ireland or to UK standards? I refer specifically to alcohol advertising or children's advertising?

Mr. Freudenstein

We are regulated and licensed in the UK under Ofcom regulations and through the television without frontiers directive we broadcast in Ireland. We are regulated in Ireland in terms of competition law and consumer protection law and any promotion and marketing we do in Ireland is regulated here also. In terms of the question asked, our advertising is regulated under UK regulations, which are in some cases more stringent than the Irish equivalent. In many cases it is similar. A recent quote from the director of the BCI suggested that in most cases the values and regulations are similar. The rules on alcohol advertising are different but we do not carry advertisements on our channels, namely, Sky One, Sky News, Sky Sports 1 and 2, that would be in breach of Irish regulations.

How many staff are employed in Ireland?

Mr. Freudenstein

We directly employ 50 staff, and indirectly through our installation partners the number employed runs to several hundred.

Is Sky a substantial contributor to the Irish economy?

Mr. Freudenstein

We believe so. We are a substantial contributor to the television community in Ireland. We have a range of channels and interactive services. We have a number of franchise operators who do a lot of business through us, such as selling and installing Sky equipment.

Sky agents.

Mr. Freudenstein

Yes.

Mr. Deering

On the issue of regulation, Mr. Freudenstein stated that no advertisements appear on the Sky opt-out channels, Sky One, Sky News, Sky Sports 1 and 2, that cannot appear on Irish terrestrial channels. In addition, it is important to note we showed sensitivity in the past to the Irish marketplace. Despite the fact we were under no obligation to do so, we did not broadcast any election material in the 24-hour period prior to the general election in 2002 or prior to last year's local and European elections. That rule does not exist in the UK but we showed that sensitivity and respect to the Irish marketplace.

Is all the revenue collected by Sky in Ireland paid to its UK offices or does it collect advertising revenue here? Is VAT paid on its advertising revenue?

Mr. Freudenstein

Yes, we pay VAT on our advertising revenue and on any installations done in Ireland. Subscription revenue is——

Is the monthly subscription paid directly to the UK office?

Mr. Freudenstein

Yes.

If one has a package that costs €50 per month, is that €50 paid directly to the UK office?

Mr. Freudenstein

Yes.

Mr. Deering

That is a result of the VAT harmonisation directives whereby it is collected in the country of establishment. Sky is established in the UK and provides the subscription service from the UK. The VAT on operations we carry out in Ireland, which are advertising, sales and installation, is paid to the Irish Exchequer.

Is there a standard in the UK on subtitling? Must Sky provide that service?

Mr. Freudenstein

We do. There are rules on subtitling and we have led the way in terms of subtitling. We have far in excess of the regulatory requirement on Sky News, as approximately 80% of Sky News is subtitled.

What is the position in Ireland?

Mr. Freudenstein

It is the same.

Mr. Deering

The Sky News Ireland service was established in May last year and we are not subtitling that service as yet. We are examining that situation but we must first establish ourselves in the Irish marketplace.

To what extent did Sky get involved in the community in Ireland as other channels do, such as sponsoring a concert or a community initiative? Installation provides a once-off payment and with 500,000 subscribers already it is close to saturation as 68% of all digital users are signed up. What proportion of the income, without disclosing profits, would be given back, notwithstanding the fact that the delegation has told us that VAT goes to the Exchequer?

Mr. Freudenstein

I understand what the Senator is saying. It is evolving over time. Our large UK base enabled us to provide this great range of choice for Irish consumers. We hope to continue to grow in Ireland and to do that we must spend more time either localising our product or working more with communities to develop more loyalty for our product.

Perhaps through spending more money than time.

Mr. Freudenstein

Perhaps by spending more money. By buying rights to Irish sporting events we provide those sporting bodies with money they can push down to grassroots sports levels which has been one of the largest benefits with what we did in the UK with the premier league. The amount of money we pay enables it to spend large amounts of money on charities or grassroots soccer. We do the same with sports in this country.

Therefore, there is more to come. All direct contact with Sky must be made through the call centre in Edinburgh.

Mr. Freudenstein

That is correct. We have an office here in Dublin but most contact with customers——

I wish to outline a situation experienced by a number of my constituents. If somebody requires one of Sky's subcontractor partners to move a dish, or requires an engineer to solve a problem he or she calls the Edinburgh call centre and is given a date on which the engineer is to call.

Mr. Freudenstein

Yes.

That person will be called the following week by the engineer who states when he or she will visit the house.

Mr. Freudenstein

Hopefully.

If the engineer cannot make the visit a call centre in Livingstone is subcontracted to call the customer to state that unfortunately the engineer did not finish the previous job and it will be the next day before he can call. I apologise, Chairman, this is an important point.

We are discussing legislation.

I know we are discussing legislation but perhaps we need to legislate for this in terms of customer service.

Perhaps we can invite Sky back on another day.

Is it normal procedure that after somebody has paid for that service, and it is not provided after two attempts, and both the Edinburgh and Livingstone call centres are aware of the complaint, Sky keeps the money without having somebody follow up on that complaint?

Senator MacSharry——

All I want is an answer.

We are here today to discuss regulation.

I know that but many people are in this boat. Not everybody in the public has the benefit of having a discussion with the CEO of BSkyB as the Oireachtas joint committee does. As they are not able to go through the call centres, I will take advantage of this opportunity to take it up with the gentleman today on behalf of the many Irish people who had these issues.

I will allow a brief response. The Senator is aware that I am governed by time constraints.

I thank the Chairman for his leniency.

Mr. Freudenstein

Of course we never intend to charge for a service we do not provide. If the Senator has a specific example he would like me to follow up, I will do so. We only charge when we provide a service.

Perhaps Mr. Freudenstein will forward to me the direct contact details for someone who can deal with this issue.

Mr. Deering

On that specific point, our customer service is rated highly. Research we commissioned in the Irish marketplace shows that compared with our competitors our customer service standards are rated highly.

I will briefly return to the question of corporate responsibility. We have run a number of initiatives in the Irish marketplace. A couple of years ago we ran the Reach for the Sky initiative together with the Catholic Youth Council whereby we held a two-day workshop in Ronanstown just outside Dublin for young people aged 11 to 19 to realise their potential. There were seminars throughout the two days on sport, entertainment and journalism.

We launched the Make it Big initiative last year to select a charity partner. We had 165 entrants, some of them from Ireland. Of the last ten selected, the Barretstown Gang Camp was on the final shortlist. A five minute film of the activities of each organisation was made and broadcast on a Sky channel.

We have to move on so we will have one more question. I must close this session. I will be here until 6 p.m. today as other groups will be appearing before the committee.

The Broadcasting Commission of Ireland has recently introduced a new children's advertising code, with very simple directives such as not using certain characters to advertise to children, a ban on the use of certain symbols and so forth. Can the delegation give a commitment today that all Sky advertising during children's programming will abide by that code?

Mr. Freudenstein

I am not aware of the specifics of that code so without reviewing it I cannot make any specific commitment other than to say that we have voluntarily complied with all the——

I am sure that Mr. Deering has examined the code. It is uncontroversial and, I would argue, incredibly mild and meek in its conditions. Will Mr. Deering say whether Sky in Ireland has considered ensuring that all advertising aimed at children meets the BCI code?

Mr. Deering

If I may refer to the chairman of BCI, Mr. Conor Maguire, who said in a speech last year that a big issue has been made about the suggestion that there would be major differences between the regulations in the United Kingdom and Ireland following the implementation of the children's advertising code. He said that he respectfully disagrees with this notion and that if one compares the BCI draft code and the ITC code in the United Kingdom, which is now under the remit of Ofcom, one will find that the differences are not enormous in respect of social values, experience, credulity——

That is what Mr. Maguire says and I thank Mr. Deering very much for outlining Mr. Maguire's views. However, what I want to know is whether Sky will give a commitment, given the minor differences between the two codes, to abide by the Irish code in advertising targeted at Irish children. The code is introduced and directed at Irish children, not children in the United Kingdom. Will Sky abide by the Irish code?

Mr. Deering

In effect, that is what is occurring at the moment with respect to alcohol——

Sky will abide by the code, is that correct?

Mr. Deering

In practice, we do not run any advertising which cannot be run on the Irish terrestrial stations in respect of our opt-out channels. Therefore, if the Irish terrestrial stations are abiding by the BCI children's code, non-code compliant advertising will not feature on the Sky opt-out channels, just as spirits advertising does not appear on the Sky opt-out channels because the Irish advertisers——

In all of the channels carried on the Sky platform, of which there is a considerable number, will Sky abide by the Irish children's advertising code, whether such channels are opt-out? Is the answer yes or no?

Mr. Freudenstein

We cannot make that commitment for all our channels on the platform because we do not control most of them.

Yes, but the advertising is inserted for the Irish market, is that not correct?

Mr. Freudenstein

That is correct for some channels.

Mr. Deering

Advertising is inserted on the four opt-out channels. Irish advertisers have chosen in respect of, for example, spirits advertising, not to use the four Sky opt-out channels for the broadcasting of material which would not be consistent with the children's code or the——

Has Sky a problem with insisting that any advertising that is paid for on the opt-out channels should follow the code?

Mr. Deering

In practice that occurs but what I am saying is that Sky is governed by United Kingdom regulations because of the television without frontiers directive, which——

I am concerned about Irish advertisers who pay to insert advertisements. Will Sky insist that those advertisers follow the BCI code?

Mr. Freudenstein

That is what we are doing currently.

Therefore, Sky will insist that Irish advertisers comply with the code.

Mr. Deering

In practice, that is what is occurring.

I propose that this committee requires a separate session with Sky to discuss a number of matters raised today.

Sky has made the commitment, Chairman, and it is on the record of the House.

I am sorry to have to rush this very important session but the rules dictate that we must vacate this room by 11.15 a.m. to facilitate the Committee of Public Accounts. We will resume at 1.30 p.m. Senator Leyden may ask a question if it is related to broadcasting legislation.

Would the delegation be well disposed to a dedicated Oireachtas channel to broadcast, for instance, what is taking place today on Sky television? I compliment Sky. I am a subscriber and that organisation was ahead of the posse. A previous Fine Gael coalition Government gave away the rights to satellite broadcasting to a shelf company called Atlantic Satellites. The rights were given away and we heard nothing more about them. We had a spot over the Indian Ocean, with a footprint into Britain, and if the Government had moved quickly it would have been ahead of Sky and would be engaged in the activities in which that company is now engaged. Therefore, I compliment Sky on taking the initiative. It took steps and ran ahead of the Irish Government, and I say well done because we had a very poor Minister at the time who did not know what to do with the rights and simply gave them away.

Please, Senator——

That is a fact and the Chairman can check it out.

That was a statement, was it?

Mr. Deering

I wish to make one final point. We cannot give an undertaking in respect of being subject to Irish regulations for our advertising because we were established in, and broadcast from, the United Kingdom. However, I can say——

The Irish programming is scrambled, is it not? Therefore it is unique to Ireland and any Irish advertising shown on that scrambled service is unique to the Irish market. Whatever about Sky's commitment to a United Kingdom regulator, can it not, as a private company, give a commitment to the Irish Executive? Sky has stated that it is very pleased with the regulatory environment here. Why then can it not give a commitment, on a voluntary basis, to follow the Irish advertising code?

Mr. Freudenstein

That is what we are currently doing and that is what we intend to continue to do. We cannot make a commitment forever but that is what we are currently doing.

Why would Sky not make such a commitment?

Mr. Freudenstein

We cannot make a permanent commitment because we do not know what the future holds.

Regarding the current code——

We will return to this matter at a later date.

I am sorry, Chairman, I would like to finish my point. With regard to the current code, Sky will give a commitment, on a voluntary basis, to abide by the children's advertising code with regard to advertising emanating in this jurisdiction?

Does the Deputy need to consult——

With respect, Chairman, we are talking to the chief executives of both the British and Irish operations and do not need to consult anyone else.

Mr. Deering

We are subject to United Kingdom advertising codes and must abide by those. In practice, in Ireland we do not carry any advertising on our opt-out channels which is inconsistent with the rules and regulations that are applicable in the Irish context. This is because Irish advertisers have chosen not to use the four Sky opt-out channels for the purpose of broadcasting non-code compliant advertising. Therefore, nothing appears on the Sky channels which is in conflict with Irish regulatory and advertising codes.

I thank Mr. Freudenstein and Mr. Deering for appearing before the committee today. There are some very interesting questions that must be asked of them in the future.

Would Sky be well disposed to Oireachtas broadcasting? That question was not answered.

Senator, please. I take this opportunity to invite Sky to return to the committee when it is considering the communications and broadcasting elements of its brief. Once again, I thank the delegation for appearing.

I now call on Ms Mary Curtin and the RTE trade union group. We have taken ten minutes of this group's time with the issues on Sky television that were being discussed and I apologise for that. This session must finish at 11.15 a.m. as a PAC meeting is scheduled to start in this committee room at 11.30 a.m. I ask the members, as well as those who are not members of the committee, to respect the ruling of the Chair.

The submission of the RTE trade union group is similar to that of the NUJ. Will any of its representatives give a very brief outline before taking questions from committee members?

Ms Mary Curtin

We welcome this opportunity to come before the committee and are grateful for it. I will be brief. We are here as a trade union group and our major concern is with public sector broadcasting and our members' role in it. We have proved the importance of this role over the past five or six years in particular, under the transformation and negotiations in RTE. We wish to secure public sector broadcasting and the quality and security of employment within it.

It can be seen from our submission that a number of issues exist on regulation, regional coverage, digital television and radio, DAB, etc., and we can answer questions on all these issues. If I do not need to introduce the members of our delegation, I will let Mr. Jimmy Jordan, branch secretary of the broadcast branch in SIPTU, explain specific issues regarding staff. We will then be open to questions.

We will ensure that names are entered correctly in the record.

Mr. Jimmy Jordan

I will be brief as I know the committee is pressed for time.

Your submission has been made and it is very comprehensive. It is not unlike that of the NUJ. The committee members took the opportunity to read it last night.

Mr. Jordan

I will briefly give the members of the committee a perspective on what has happened in RTE in recent years. I will not regurgitate all the submission as we have been here before.

Over the past five years, RTE and its staff have engaged in a major change process called the transformation agreement. It was designed to bring about change in work practices, new technologies and flexibilities. We have engaged with the company on this issue and a much better company has been evident since the agreement's implementation. Everybody will agree that RTE is now a more flexible and adaptable company, and the staff are more adaptable also.

Nonetheless, concerns arise in the new environment, particularly with staffing numbers. We hold a strong view that the staffing numbers in RTE have been reduced to a level where a danger exists of the company becoming a casual employer. More and more temporary staff are being employed. We do not wish to see this happen as we wish to see the national broadcaster as an effective and adaptable company. We also wish to see our members' terms and conditions of employment protected, particularly with regard to pay, pensions etc., and this cannot be done as long as the company employs considerable numbers of short-term or casual freelance staff.

We have proved that the staff can change, and we have indeed taken on change which saw up to 600 people leave the company. The bulk of these were SIPTU members as the union represents the technical operations, clerical, administration and producer grades across the company. We point out to the committee that signs of cracks are appearing in the system, particularly with regard to staffing numbers. We wish to engage with the company to rectify concerns over the numbers of casual or part-time staff. This will lead to a strong company.

SIPTU also represents a number of staff in TG4 who are not direct employees of RTE. These are technical operations staff. We are engaging with these staff in a consultation process with the management——

This meeting is about broadcasting policy and regulation.

Mr. Jordan

We may request an opportunity to come before the committee on behalf of those staff members.

I welcome the representatives from the RTE trade union group. I acknowledge the work done to effectively recreate the company, in which the employees and the trade union group have been active. It sounds like the company is now a lean, mean fighting machine. The group has acknowledged that RTE is operating on a sustainable basis and has overcome considerable challenges to get to the present stage.

In this context, the same issue arises as that raised by the NUJ relating to the single regulatory authority. From the perspective of the committee, RTE is in a healthy state and has retained its dominant position in the market. It has dealt well with competition. I would like the group to flesh out this concern. Although I see the logic of it, RTE is in practice doing very well and I see no reason the company would not continue to do so.

We will take another one or two questions and they can be answered together. Deputy Durkan was at a meeting earlier.

I, like the Chairman, have another meeting to attend later. I congratulate the group on its presentation. We all recognise the necessity of having public service broadcasting which is independent and strong, but which is competitive at the same time. Is the group satisfied, taking into account the ongoing debate on monopolies etc., with the extent to which the company will be expected to face deregulation and compete effectively with all others? Perhaps it is an unfair question to ask of the group, but does it think the independent sector has a grievance when it alleges a monopoly?

Some people advocate the independence of TG4 and I would like the group's views on this. I am also interested in the extent to which the public broadcasting sector is competing with local radio. With regard to the developments, amalgamations and takeovers that have taken place in local radio in recent times by newspapers and groups associated with newspapers, what impact does the group feel will be felt in the public broadcasting sector?

I am interested in the argument that separate panels are needed for regulatory programmes for the private and public sectors. This does not make sense to me. The chief executive of RTE, Cathal Goan, was before the committee some weeks ago and made a valid point about a problem with the regulations. To take the example of subtitling, regulations are different for the commercial sector than for RTE. Mr. Goan argued that this was a regulatory mistake. Does this example demonstrate that it makes more sense to have one regulator treating public and commercial interests in the same way? This would be a level playing pitch that could not worsen RTE's position or worsen the position from a trade union perspective. I can only see this as creating regulatory bureaucracy. Will the group explain why commercial and public interests must be treated differently?

Ms Curtin

The answer to Senator O'Meara's question is in the question itself. It is because RTE has had its own authority, being totally independent and able to deal with its own issues, that it could come through its transformation. It is because of this that it is the lean, mean fighting machine referred to by the Senator. The issue is that this independence is required as a public service station so that affairs can be managed as a public service station.

I will speak briefly on this and Mr. Seamus Dooley may also want to speak on this point. In considering a single regulator as creating a level playing field, I am inclined to remember the Bible piece about serving God and mammon. One person or group cannot meet the needs of the commercial sector and public service broadcasting combined. I have no quibble with the commercial sector and it is perfectly acceptable for people to enter broadcasting to make money. That is not the role of RTE. The needs of the commercial sector and the regulatory conditions that help it meet its end are very different from those of public sector broadcasting. For this reason, the ethos of RTE is different. I have been in this business for 27 years because I believe in public sector broadcasting. I do not have to work in RTE, I can work elsewhere. However, there is an ethos, a commitment and an ideal there, although we may not achieve it.

Would a regulator not bring the commercial sector to Mass with RTE every week? Would that not be the regulator's job?

Ms Curtin

I would not force anybody to go to Mass as I do not see why they should be forced to do so.

I am simply making the point of it being between God and mammon.

Ms Curtin

Yes, but I do not think they should have to be forced to do so. They are operating in different spheres to different agendas. A regulator who tries one day to wear one hat and the next day to wear another will find that difficult to the point of being impossible. Mr. Dooley might like to speak on this matter.

Everyone recognises that there is a need to avoid bureaucracy. What we are suggesting is that a regulatory authority be established which would deal with common issues. The Deputy mentioned Mr. Goan's reference to the requirement in regard to texting, which is a common issue. Under this proposal we suggest that there would be two panels, effectively sub-bodies, one which would examine the specific issue of commercial broadcasting and the other which would examine the issue of public service broadcasting. It is not a question of bringing them all to the one church. They have a different remit. The obligation under the public service remit may very well conflict with the obligation in regard to commercial broadcasting. It is not necessarily a question of having two regulators but the possibility of having a substructure within that structure.

With regard to Deputy Durkan's question on whether the independents have a grievance, they do not have one for the same reason. The issue of commercial broadcasting is different from that of public service broadcasting. The obligations imposed on the public service broadcaster are different from those imposed on commercial radio stations.

Mr. Jordan

To respond to a number of points made on the proposal to have a single authority, it comes back to the question of how we judge and access people and against what we benchmark people. When one benchmarks RTE, one does so in a different way from how one would benchmark a commercial station. I am not saying that is right or wrong, it is not for me to judge that, but we benchmark people differently. What we expect from RTE is different from what we expect from TV3, and that is only right. We do not expect to turn on TV3 and see programmes such as "Prime Time" but we expect such programmes to be produced by RTE because it is for such programmes that people pay their licence fee. It is not feasible, desirable or achievable to have a single body that would examine these two sectors and regulate them. There is a need for clear waters between the regulator for RTE, as the national broadcaster, and for commercial broadcasting.

On the other question on the independent sector, I am not sure to what independent sector the member was referring. Independent film producers get considerable work from RTE. I do not have the exact figures involved but I know it runs into tens of millions of euro. People have the idea that everything broadcast by RTE originates in RTE, but that is not the case.

We are falling behind timewise. Mr. Jordan has made important points.

Mr. Jordan

My final point relates to monopolies. RTE has never had a monopoly. It has always had to face intense competition from probably the best broadcaster in the world, the BBC. The BBC could be accessed by 60% to 80% of the people and RTE has always had to compete with it. It competes with commercial stations such as ITV. The advent of TV3 does not present any great challenge to us. We have always faced competition.

Ms Curtin

Mr. Seán MacAonghusa will reply to the point on TG4.

Perhaps he will do so as quickly as possible.

Mr. Seán MacAonghusa

TG4 should be complementary, not competitive. TG4 should not engage in false competition, as can happen in certain circumstances in the provision of public service broadcasting. Public service broadcasting is an overall service that is provided. I am not suggesting that it should be run by RTE. The structure in place there is good and it provides for exactly what it should be doing. Therefore, why fix it when it is not broken?

I apologise for rushing this session. The representatives' submission is important to us. It is not dissimilar to the NUJ position or the RTE submission from RTE management. We appreciate the representatives appearing before the committee. We will suspend the meeting until 1.30 p.m. as we have a number of other groups to meet. We will reconvene in Committee Room 4.

Sitting suspended at 11.15 p.m. and resumed at 1.30 p.m.

I welcome Mr. Seán Ó Siochrú and Ms Margaret Gillan from Dublin Community TV and Mr. Michael Fitzgerald and Mr. Jim Doherty from the Community Radio Forum of Ireland. I advise everyone that I will adhere strictly to the timetable. I will not allow any presentation to exceed the five minutes allotted. We hope to complete this session at 2 p.m. As we have received the presentations, perhaps the delegation will give a brief overview.

I draw everyone's attention to the fact that members of this committee have absolute privilege. However, that same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Under the salient rulings of the Chair, members 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 ask Mr. Ó Siochrú to make his presentation.

Mr. Seán Ó Siochrú

I am chairperson of Dublin Community TV and I am accompanied by Ms Margaret Gillan, the secretary of DCTV.

As regards community television generally, we have come a long way in the past five years. Community television has been recognised in some form in the Broadcasting Act 2001, which is welcome. It has been further validated by the Forum on Broadcasting, the interministerial group of the Council of Europe and the Dublin City Development Board which have recognised community television and community media generally as a third pillar of media after public service and commercial media. Furthermore, as a result of working closely with the Broadcasting Commission of Ireland a distinct model of community television is now emerging. This is being developed with four or five potential community television groups in this country.

Community television is not for profit. It does not chase big money or a big sell-out after a couple of years. It is entirely democratic, membership driven and transparent. It is not just about programme making, but about training, education and providing facilities and resources. It is about being part of the community. It is not just for the people, but by the people and the community. The community level of participation is an important component which differentiates it from its commercial counterpart even at local level.

There has been significant progress, particularly in Dublin where we are further ahead. We are in communication with the other groups in Navan, Cork and Galway. We are now a co-operative registered with ICOS. We have an open membership. Anyone in Dublin is entitled to join. Any non-commercial organisation is entitled to be a member. We have dozens of members across all sectors in Dublin and our membership continues to grow. We applied in April for a licence with the Broadcasting Commission of Ireland, but there are delays on its side. It is unlikely that it will be granted before September or October, but we are moving ahead with it.

A lot of progress has been made. We have got significant support at various levels in Dublin. However, there is a major gap between having the policy and the model in place and the good intentions and being able to implement it. Our chief challenge is in securing sustainability and independence. The key to this is mobilising the right configuration of resources and of support which we know is available and which we encounter all the time. We are concerned about getting that configuration right. There is little point in putting in place a great policy to develop a fine model unless the resources are configured properly which will allow us to have independence and sustainability. The new legislation which is in the pipeline is the best opportunity to consolidate what is happening not just in community television but in community media generally, including radio.

For the sake of independence, community television must of necessity look to a diversity of sources for funding. This includes membership fees — we currently have several thousand members, including family members and donors — public fundraising and private sector sponsorship. We looked at the success of the community radio sector in that regard. The broadcasting funding scheme is also relevant, but it is narrow in what it can fund in terms of the type of programme and activity. We are desperately seeking and we hope to achieve up to 40% or 50% of core funding from a variety of public sources.

We have four proposals in terms of new legislation, which we believe will make this possible. The broadcasting funding scheme should be revisited or refined so that some of the money, which up to now is €17 million or €18 million, can be put in place to support the initiation of community television. Core funding could be provided on an ongoing basis. It would not require too much to allow the Minister to make such an order, which is not possible at the moment.

Second, provision should be made for training and capacity-building within the community sector. This was done for the private sector in radio in particular. Third, under digital terrestrial television, there should be space for community television and community interests to be involved in its engineering. It is important to ensure it is configured so that this space is useful. This is what experience in the UK indicates. This would involve difficulties for broadcasting in areas such as Kerry and Donegal using the current available. Digital might be a solution to that on the community side. Fourth, we must ensure effective and informed representation on any new regulatory body set up for community media and community radio and television interests.

We do not believe the current system of Government nominees is acceptable or effective in terms of the BCI. An open and participative procedure must be put in place to ensure that people who speak on behalf of the community are knowledgeable and represent the long-term interests of the community.

We have noticed from the summary the parts you have highlighted in the presentation, for which I thank Mr. Ó Siochrú.

Mr. Jim Doherty

I represent CRAOL, the representative organisation for the community radio sector in Ireland. I thank the committee for giving us this opportunity to contribute to the review of broadcasting legislation. It is appropriate that the debate is taking place at a time when the first community radio stations licensed in Ireland are celebrating their tenth anniversary. During that time, we have contributed much to broadcasting in Ireland and we have a further role to play in contributing to the future development of broadcasting in Ireland.

There are currently 19 licensed community radio stations throughout Ireland, and several others, known as aspirant groups are in various stages in the licensing process. A community station is defined by the BCI as one which is characterised by its ownership, programming and the community it is authorised to served. It is owned and controlled by a not-for-profit organisation whose structure provides for membership, management, operation and programming primarily by members of the community at large. Its programming should be based on community access and reflect the special interests and needs of the listenership it is licensed to serve.

All Irish community radio stations operate in accordance with the AMARC European Charter and must include this charter in their contracts with the BCI. This charter sets out the importance that community radio stations place on being run as not-for-profit, democratically-run and editorially independent organisations. It articulates the commitment of community radio to policies which facilitate open access and full and equal participation by all members of the community in all areas of station life. Access and participation by the community is vital to the success of any community radio station. This can only occur when members of the community have equal access to all areas of station life, including membership of the boards of directors, programming committees and work as presenters and producers.

Community radio stations world-wide are based on a number of different models. One of these, and the most common type of station in Ireland currently, is the geographic community licence. This licence is usually granted to a small specific geographic area. It can be either rural or urban, as in the case of Radio Corca Bascinn based in the Loop Head peninsula in West Clare, my station, Inishowen Community Radio, based in Donegal or Near FM which is based in North Dublin. Another type of model used by the community radio movement is that of community of interest station. The majority of community of interest stations in Ireland at the moment are third level student stations, based in college campuses in Cork, Limerick and Galway.

All of these stations are owned and operated by members of the local community. Representatives of local community development agencies, local community workers, volunteers from all walks of live, colleges, schools, local business people and members of the volunteer networks participate equally on their boards of directors. All these are volunteer members of the radio station, which is used as a tool for local community development. More than 1,500 volunteers directly contribute to the running of stations in 12 counties. Our policies of open access and equal participation by all members of the community, regardless of accent, ethnic origin, gender, employment or educational status, gives our communities a kind of voice not facilitated by any other broadcast media. Community radio gives Irish people a real sense that they can contribute in a meaningful way to the development of their own communities and a legitimate form of self-expression, a fundamental human right for all members of society.

Community radio is a true reflection of the local community it serves in all its diversity. It is an essential part of the local community development infrastructure. Community radio is not a commodity which can be traded, but a practical philosophy concerned with people, not profit. As the Irish media becomes increasingly concentrated in fewer hands, community media becomes an increasingly important vehicle for the promotion of Irish culture and identity. However, there are currently no provisions within the legislation governing the licensing of community radio which take account of these deep-seated values of open access and participation, not-for-profit, democratically-run radio stations. While the Radio and Television Act 1988 enabled the creation of an independent radio sector in Ireland for the first time, it did not make any specific mention of community radio. Rather it states that all sound contracts awarded will specify the area to be covered and have due regard to serving the local community's interests and be supported by them.

This does not safeguard or guarantee a space for community radio and the provision of community radio licences. Currently the development of the community radio sector is the responsibility of the commission of the BCI, without specific legislative direction. While CRAOL recognises the support of the executive officers of the BCI, the lack of community development or community radio's experience of most members of the commission over the years hindered the growth of the sector. The creation of an environment that encourages the maintenance of high quality radio services is crucial to the development of a diverse, vibrant society through an independent broadcast media. CRAOL believes that this environment will only be created through specific legislation which clearly defines the distinct ethos of community radio as currently operated within the Irish independent broadcast sector.

Perhaps Mr. Doherty will outline the five goals he is seeking. Members will then ask him questions because we have his presentation.

Mr. Doherty

Given that a single content regulator is to be created in a short time, it is imperative to the sustenance and strategic orderly development of the entire broadcast sector to have full and equal representation on the board of any such regulator. Community radio is not a commercial radio on a smaller scale. Neither is it a localised imitation of a public service broadcaster. We seek that community radio is clearly and distinctly legislated for as an intrinsically local, not-for-profit, democratic, editorially independent and access-based radio and that the ideals enshrined in the AMARC charter and the linkage with community development is included in any new legislation. We also ask that community radio is given representation of at least two people on its own nomination through CRAOL on the board of any new broadcasting authority. Any other regulating, monitoring or public or private committee set up to oversee broadcast media should contain representation nominated by CRAOL and comparable to other broadcast sectors. Any new regulator should continue to develop and build on the existing commitment to support the development of Irish community radio and the work of the CRAOL network. Proper provision should be made within the public service broadcast fund for the development of community radio in Ireland. Core funding should be made available to secure the viability and sustainability of community radio in rural and other areas where local resources are not available.

I congratulate the two groups on their presentation. I am more familiar with the concept of community radio than community television. One question that comes to mind in regard to both is that of sustainability. It was said that there will be no sell-off to anyone. Have any community radio stations been sold off so far?

Mr. Doherty

Radio stations by their very nature cannot be sold. They are not owned by individuals and they do not have a commercial licence.

Does the same apply to the proposed——

Mr. Ó Siochrú

Under the Broadcasting Act 2001, there is a separate licence for a commercial station as distinct from a community station. A community station cannot benefit financially and it cannot be sold off. We have a progressive policy in that sense, more so than our European neighbours.

It does not apply in the way it applies to local radio stations who have amalgamated or taken over someone else. Can I ask about the extent to which you are likely to rely on the funding accruing from the broadcasting fund?

Mr. Ó Siochrú

A principle in all community media is not to rely too much on any one source because this compromises independence in some ways, whether that be a public, private or even a community source. The community fund for television would currently be able to fund the production of programmes. There is a role for the community television organisation to produce programmes but we see ourselves as facilitating community organisations to produce programmes and they should be able to draw on the fund with our support and assistance.

There is a narrow interpretation of what can be funded, however. As we understand, it could not fund, for instance, a community affairs programme which is a vital need in a place like Dublin with its different areas. It also cannot fund training or support or any other basic ongoing activity. From our point of view, the constraints within it are the problem although we heartily welcome the possibility of there being funds available for communities to make programmes for broadcast on community television.

Will the delegation explain the working format? Will it be superimposed on the existing channels and piped in the usual way or separate from them? What will be the development and impact of advertising?

Mr. Ó Siochrú

The legislation states that community television has a "must carry" obligation. This means that NTL must carry the signal. We have been in negotiations with NTL which is in the process of being taken over and unfortunately this complicates matters. There is no question that it will agree because it sees the value of having a community channel which will differentiate it from Sky Television, for instance, and other such platforms. We have a guarantee of, in theory, a free access to cable which means community television will be alongside other channels.

Regarding Deputy Durkan's question about advertising on community radio, will the delegation explain the position?

Mr. Doherty

Community radio is restricted to six minutes advertising in each broadcast hour. Community radio stations do not rely on advertising for their viability and if this were the case, they would be subject to editorial control by commercial interests, for instance. Advertising and general fund-raising is only a part of how we fund ourselves. Most of our funds come from the likes of project grants and so on.

What are they?

Mr. Doherty

They are project grants for running training projects and things like that.

Where do they come from?

Mr. Doherty

From various sources. In our case we are currently funded through a grant from Development Co-Operation Ireland and PEACE II funding and we are applying for PEACE II extension funding. We are also funded by FÁS and various other organisations and also from the new ventures in broadcasting scheme. We do not regard the public service broadcasting fund as being the manna from heaven because it will not be our core source of funding, by any means.

Does the delegation not see that fund, which was set up specifically for funding programme-making, as being used for administrative purposes?

Mr. Doherty

Not for administrative purposes.

On the question of continuity of service, does the delegation foresee any circumstances, as has happened in the past, about six months ago, when television and telephone services were withdrawn from a plethora of people in the south-west of the city? Can the delegation ensure this is not likely to happen? Has the situation been investigated sufficiently to ensure it does not happen?

Mr. Ó Siochrú

The legislation allows us to ensure that will not happen. I share the Deputy's concern on the matter but it is not a fear of ours. We would make sure it does not happen. We intend to serve all the people of the greater Dublin area.

In our submission for the licence we have tried to learn from the radio experience. We expect some of our funding to come from sponsorship and not from the form of advertising seen on conventional or commercial public service television in Ireland. As the Deputy said, it is extremely important to have a diversity and variety of forms of funding in order to ensure independence combined with sustainability.

The delegation's presentation describes the BCI's vision as being one which encompasses the three interesting spheres of public, commercial, and community. The presentation then goes on to describe a pervading tendency towards the commercialisation and commodification of media. Why has this occurred if the legislation and the commission has that three-way vision? In the view of the delegation, can a single regulator cover the regulation of programming of all three spheres, public, community and commercial? Is a separate franchising agency required?

Mr. Ó Siochrú

With regard to the first issue raised by the Deputy, community television is voluntary and I work in the international area of media and communication. I can confirm that most of the pressure in the media and communications scene which has been very well resisted and formulated by the BCI and by the Government through the legislation, comes from external sources, not just from European Union sources in terms of television without frontiers but also at a global level where there is a significant move to turn all media into forms of commodity. We are not a commodity and the BCI has solidly recognised this as have all the commissions set up by the Government. Major global trends are affecting the situation in this country which are very difficult to ignore. However it gives us an opportunity in the case of radio to develop a consistent model giving genuine support to all the pillars and to ensure a diverse media environment. Diversity is being reduced at the global level while, ironically, the number of channels is multiplying. I work as a consultant with UN organisations. It is a great fear among many at the global level that media will become too powerful.

On regulation of the sector, we would be quite happy to work with a single regulator. We do not regard it as a contradiction for the different interests to be regulated within a single regulatory scheme, if that is what the Deputy means. We work very closely with the BCI which is merely an implementing body. We have been lobbying for many years and the legislation has resulted in many positive results. Our voice has been heard. This is now the last major hurdle in terms of our sustainability on the television side.

Mr. Doherty

We are members of CRAOL which is funded by the BCI through the community radio support scheme. We are voluntary members and are not paid for the work we do for the organisation. We work very closely with the BCI and I am confident we will work closely with the future single regulator. We do not have a particular preference either for a single regulator or several regulators for the various sectors. Our concern is that whatever regulator is put in place is properly constituted and that we are given representation. We believe that only we know and understand our own needs and concerns. Those needs cannot be articulated by purely political appointees. We need to have our voice heard there. We are involved in community development and are a community development group first and a radio station second. The community development aspect takes priority and we just happen to deliver much of that through radio. As this country becomes more multicultural, the face of Ireland is changing. Community radio gives a voice to those people. Part of our role is to help to integrate other ethnic groups into our communities and we do it quite successfully.

On a point of clarification, the Dublin Community Television submission states that the broadcasting funding scheme should be developed further to go beyond the production of community programmes and assist in the start-up and ongoing operational side of community television.

Mr. Ó Siochrú

That is correct, except I would not necessarily use the word "operational", in the sense that the provision of facilities, training and so on, to communities is absolutely important. I do not like to see money going into offices and such things. It is not necessarily operational but other than programme production. We provide a platform for communities and we assist them to make their programmes but we also need facilities to allow them to do that and this is where the support is needed. It was not anticipated that a start-up fund with such a large amount of money would be available at this time. It offers a good opportunity to give the entire sector a boost when it badly needs it. It is not hyperbole on our part to point out that we could develop a model which would be the envy of Europe and community radio has led the way in this regard.

I thank the delegation for its presentation which set out its stall and gave the joint committee a good overview of the position. Its contribution will be helpful to the joint committee and, I hope, the policymakers in the Department who will be interested in having the blacks of the session when they frame the legislation.

Sitting suspended at 2.01 p.m. and resumed at 2.02 p.m.

I welcome representatives of the Broadcasting Commission of Ireland, BCI, Mr. Conor Maguire, chairman, Ms Celene Craig, secretary to the board, and Mr. Michael O'Keeffe, chief executive officer. I advise witnesses and members that I will adhere strictly to the timetable and not allow any presentation to exceed the five minutes allotted. We hope to complete this session at 2.30 p.m. The joint committee intends to sit until approximately 6 p.m. and is, therefore, under time constraints. Copies of all presentations have been received and will be helpful to the joint committee in its deliberations.

Before we begin, I draw the attention of witnesses to the fact that while members of the committee have absolute privilege, the same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Under the salient rulings of the Chair, members 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 ask Mr. Maguire to make his presentation.

Mr. Conor Maguire

I thank the Chairman for inviting the Broadcasting Commission of Ireland to appear before the joint committee. I am delighted to take this opportunity to address it. I do not intend to dwell on the body of the submission, except to point out that it covers a number of matters, including regulatory structures, licensing, policy review, monitoring and enforcement and the development role of the Broadcasting Commission of Ireland. I will briefly refer to these headings and give a short opening submission, after which I will respond to any questions which may arise.

The BCI's position on the regulatory structure is clear and it has taken a consistent approach in respect of the question of a single regulator. A single content regulator is necessary and this approach was endorsed by the forum on broadcasting in 2002. The reason the BCI takes this view is that it results in a uniform approach being taken to commercial, public and community broadcasting. It is essential that the body exercising a regulatory role is independent, as required under law, and this view is endorsed by the European Union. In this respect, the Broadcasting Commission of Ireland has exercised its role independently and successfully.

It was suggested at a previous meeting of the joint committee that the Broadcasting Commission of Ireland is not an appropriate body to perform a regulatory role because it is conflicted in some ways. That perception arises from a confusion between the developmental and promotional roles. The BCI does not have a promotional role but is a regulator which exercises its regulatory function on the basis of the statute under which it was established. There may have been a time when its predecessor was involved in promotion but this is no longer the case. When the industry was developing, promotion was needed but that time has passed and the BCI is no longer involved in promotion. The industry has its own promotional bodies and no promotional role is required of the BCI.

Under the 2001 Act, the Broadcasting Commission of Ireland has a developmental role across the industry, that is, the private and public broadcasters. As members will be aware, in the new statutory environment the commission is tasked with drawing up codes such as children's advertising and access codes and codes for taste and decency and general advertising. The development of the children's advertising code was a new role which the BCI openly embraced. In exercising this role, the commission took a phased approach and the outcome of the process was welcomed by the public broadcaster. The BCI also developed the access codes and is in the process of developing the taste and decency codes and the general advertising codes, as one would expect from a regulator of content. Our approach has always been to be fair to all, which entails taking into account industry and the various categories of broadcasters but primarily the listening and viewing public.

On licensing, we are aware that further development is taking place in the area of digital transmission technology, DTT, and we support the Minister in this regard. The BCI has worked with the Department at all stages and welcomes any development in this area. It looks forward to assuming an expanded role in this area. On the television side, members will be aware that the BCI has recently licensed Chorus, Setanta and, most recently, the City Channel. The BCI has also been successful in the regulation of radio. A strong local and community sector has developed during the period in which the BCI and its predecessor were involved in regulation and we look forward to its further development. The BCI would welcome moves to enshrine in legislation the principles and policies in respect of community radio. It would also like some definitions expanded, including that of "diversity principles" which are fundamental to the way in which we must discharge our obligations.

Fast-tracking was, I understand, first mentioned at a meeting of the joint committee. The BCI accepts the merit of this approach which would be useful in respect of certain of the licensing scenarios with which we are confronted. It is not, however, in favour of automatic renewal and has stated so consistently. The commission's licensing role requires that we examine all applications in an even-handed and straightforward manner. Renewal should not, therefore, issue automatically. The BCI is not in favour of an appeals system because creating an extra layer — an appeals board or body — would essentially mean the appeals body would become the licensing body. It would be an extra layer. It is not appropriate because it has always been our approach that policy development should be transparent, open and consultative.

When we developed our sophisticated ownership and control policy, it was part and parcel of its introduction that it would be reviewed and we are now embarked on a review of it. Likewise the 20% news and current affairs policy is also under review. We do this by consulting with all interested parties, not just the industry.

We have a role in monitoring and enforcement. We have always complained that we have been given just the blunt instruments of the removal or suspension of a licence. We would prefer more subtle methods of enforcement but for legal and constitutional reasons they are unavailable.

We have a good record in development and continue to expand it. It is an important aspect of how the industry will develop into the future. We are constantly evolving and it is our goal to have a consistent but flexible approach. We want at all times to be transparent and participatory, ensuring the widest possible consultation processes take place where appropriate and, as a result, we evolve policies which meet the circumstances appropriate at an given time.

It was put to us today by NUJ and the RTE unions that there should be one independent body acting as a content regulator with two divisions, one responsible for public service broadcasting and the other for commercial broadcasting, and there should be separate bodies to license radio and television operators. Difficulties could arise in regulatory matters on content and the renewal of licences because people must deal with the regulator and the licensing body.

We did not have time to discuss if Sky Television observes the standards which were set out for advertising, particularly for children's advertising. We had a worthwhile meeting some time ago when Mr. Maguire was starting that process and we agree it has been a success.

Mr. Maguire

I said at the start that there should be a single content regulator and that view is supported in some of the submissions made, although they call for two divisions within it. That does not make sense. We exercise a content regulatory role. There is probably a view that we are in some way linked to the private sector more than to the public broadcasting sector but that is not so and it should not be so. The principles that underpin proper regulation of content are the same in both instances, they do not just apply to the private sector.

There is a second arm to our regulation — the community sector — a non-profit side of the broadcasting industry that we regulate. If we took the proposal for two divisions to the logical end point, there would be a third arm to deal with community. That sort of breaking up of our role would not be appropriate. I do not see any particular contradiction in the principles that should be applied to content across the board.

We license the private sector and we have done so without interference or philosophical difference over our being a content regulator across the board. It is a discrete function within our regulatory role.

Mr. Michael O’Keeffe

Sky Television is regulated in Britain. It may voluntarily choose to comply with Irish standards but it is not obliged to do so. The former Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, during the Irish Presidency of the European Union, looked at the whole jurisdiction issue, particularly services that are targeted at one country — Sky is clearly targeted at the Irish market — but that are based and regulated in another. That is an issue that creates problems from time to time. In our dealings with industry bodies we encourage Sky to be part of that and to apply our regulations.

Has the BCI had any contact with Sky Television?

Mr. O’Keeffe

We have an ongoing informal relationship but we do not regulate it.

Is there contact on its home-produced programming such as Sky News Ireland?

Mr. O’Keeffe

No.

Are the standards set by Ofcom in Britain similar to the standards set by the BCI?

Mr. O’Keeffe

They are broadly similar. There are some differences but both countries operate in compliance with the television without frontiers directive. In broad terms the standards are the same, although there are areas of divergence where one country is stricter than another. The differences, however, are not radical.

That debate must be revisited at EU level.

I was interested in the definition of the developmental role versus the regulatory role. We live in a society where there are increasing numbers of regulators. If the BCI regulatory role is pursued, does it not merge with the developmental role if it is monitoring development in the public and private sectors? At some point, the BCI takes on a new role or evolves from the present position.

It was said there will be no appeals system for licences. I would like to hear more about that because I am not sure about it. Given that the right to appeal is available to everyone, if there is no appeal system, the only other form of appeal is to go to court. That is not the right way to go.

Consulting with the interested parties other than service providers on the changes that will take place in broadcasting was mentioned. Who are those other parties?

Mr. Maguire

I did not make myself clear about the developmental role. I am not talking about confusion on the developmental side but there is a perception that the BCI is involved in promotion of the independent sector. In other words, if that were so it would mean that on the one hand, we would be seeking to regulate across the board, but promoting one sector only. That is not the case. Ours is not a promotional body, and we do not indulge in any promotional activity.

The question of a difference or inconsistency between the developmental and regulatory roles does not arise. It is possible to maintain a developmental stance, as we have done. One does that by providing supports to encourage high standards in the industry one regulates. That is different from promoting or seeking to advance one sector necessarily at the expense of another.

The last time we appeared here there were many questions about the absence of an appeal system. We cannot be specific about any particular licensing application but if one takes any contested application there are several different applicants in the first phase. Depending on the particular service being considered or advertised, that is reduced to a short list of perhaps four or five applications going from phase one to phase two.

One could not be blind to the fact that each of those final applicants considers itself the best applicant for the licence in question. Each believes that it should win and when it does not win believes that it has been done out of the licence and should have some form of redress.

If one provides an appeals mechanism inevitably an appeal will follow every licensing application because the disgruntled applicants will seek to have their cases tested again. The Broadcasting Commission of Ireland would no longer be the decision-making body and that role would fall to the appeals body, whatever that may be. Needless to say, applicants should have the right to fair and proper procedures at all stages and the right to test that right if there is any divergence from fair and proper treatment.

As Mr. Maguire is aware, we disagree with him on that issue.

Mr. Maguire

I am aware of that.

The committee has its own view on that issue and has produced a report.

Mr. Maguire

I am aware of that.

We believe there should be an appeals mechanism similar to that in An Bord Pleanála which makes a few decisions to overturn local authority decisions. We do not believe that the Broadcasting Commission of Ireland should have the final say in this matter. I do not wish to dwell on this because it is a matter for the policy makers.

Mr. Maguire

A third point was raised about consulting. If one looks at any of the recent procedures for the development of a policy we have adopted, one would see that, for instance, in regard to advertising for children, we consulted widely not just with the broadcasters or the advertisers but canvassed in the newspapers for submissions. We received over 500 submissions from a variety of stakeholders, viewers, individuals and groups whose submissions we considered. The policy was then drafted and adopted. Deputy Eamon Ryan is aware of that because he made a submission.

We deal with regulators all the time and increasingly I am coming to understand their strengths and weaknesses. One weakness is that a regulator will never take a tough decision. A regulator would never have introduced a smoking ban. Regulatory bodies are bureaucratic in their nature and engage in significant consultation and consideration. As an example, the advertising for children code is both safe and weak. It could have gone a great deal further.

The McDonald's advertisement with the line "Honey don't forget to have a balanced diet" or showing a toothbrush in advertisement for sweets does not go far enough. How does Mr. Maguire answer that criticism? Regulators will always play safe because they do not have the political support, unlike a Minister who can make a unilateral decision.

Under our remit we also see the weakness of licensing authorities. For example, in the fishing industry we see the effect of having one Department or body which issues the licences and is also responsible for monitoring, controlling and regulating the industry. That does not work. Human nature is such that if one licenses an operator this week one does not want to see it collapse the following week. A measure of the success of the BCI is the number of diverse media outlets that exist. Mr. Maguire says the commission is not a promoter but human nature suggests that it cannot but want to see operators it approves survive.

There is a fundamental problem in being both a licensing authority and a controlling and monitoring authority. For example, in the subtitling regulation of the commercial sector, while I do not have the exact figures Cathal Goan, representing RTE, told the committee that the commission had taken the soft option and not acted as it could have in insisting that the independent broadcaster take a tougher subtitling role.

Finally, why have we been so slow to roll out digital terrestrial television?

Mr. Maguire

I hope the Deputy will empathise with me to some extent when I say that virtually all the decisions we make are tough ones. We have been the subject of judicial review proceedings on 12 or 13 different occasions. That is not something about which one normally boasts but thankfully these have been successful from our point of view. That gives an idea of the view those who were the subject of our decisions hold of those decisions.

I do not accept the Deputy's contention in regard to taking safe, easy decisions. We strive to be fair, balanced and proportionate. Those concepts are important in any decision-making process. On one side of the argument, a person whose requests or submissions were not followed to the full might say he or she wanted a total ban on, or dictatorial approach to, an issue. That person might say we are safe and easy. From the other perspective the advertisers want us to do very little and say we should not interfere with rules applying to advertisers. They say we are too tough. It is a question of balance and fairness, as is true of all decision-making.

The Deputy said that because we must fulfil a licensing function it is impossible to regulate, but one must look at how the structure was worked out. It was devised in such a way as to mean that, effectively, the licence is to all intents and purpose the contract which sets out the terms by which the successful applicants must abide. They win a licence subject to terms. Among those are requirements for balance and fairness in broadcasting, which is another method of ensuring proper control in that respect.

As far as regulation is concerned, however, it is not inconsistent to draw up contracts and allow them to be signed and brought to fruition, afterwards regulating and dealing with the situation. Before I was involved, licensees were suspended and in one case had a licence terminated. Perhaps we should not go into the details, but it was a Limerick licence. In other words, we were the granting authority, and yet we were the regulator when it came to the question of termination; we fulfilled both roles properly. In many respects, one might say that we are in a very good position, since we know exactly what is licensed and how it can be controlled.

Regarding digital terrestrial television, or DTT——

What about subtitling?

Mr. Maguire

Mention was made and criticism voiced regarding subtitling. The way in which it was cast, from what I understand, was that different approaches were taken regarding the different broadcasters. That much is true, but it was done on a specific basis.

There are different broadcasters — RTE One, RTE Two, TG4 and TV3. Matters were taken into consideration in reaching conclusions regarding the levels that they should be asked to reach within a ten-year period. That included the stage of development of the broadcast provider, the level of current provision, the nature of the broadcast provider, the technical and human resource costs, technical capacity and the type of programming schedule. In that regard, distinctions were drawn, not only between public and private but within the public broadcast sector. RTE One was given the target of 100% within ten years, RTE Two 90% and TG4 80%. TV3 was given the target of 60%. I might add that some other jurisdictions treat commercial television stations as having no requirement regarding subtitling.

If one considers those figures, from the current level of provision up to 100%, one sees that we also examined the graph very carefully across the board to determine how soon broadcasters should reach 100%. We will provide that graph to the committee. It shows that by year five, RTE One should be at 93%, RTE Two at 60%, TG4 at 50% and TV3 at 40%. There is a quite heavy responsibility for TV3 as a provider, taking into account the different factors outlined.

Just to answer that point, I believe that the parent company of TV3 is massively resourced — much more so than RTE. Surely a regulator is there to create a level playing field, and a company such as RTE would be justified in claiming that it is not.

Mr. Maguire

I do not know what the Deputy means by "massively resourced". I am sure that TV3, if it were represented, would address that aspect.

I will ask it.

Mr. Maguire

It is a commercial company. It may have wealthy backers, but to say that it is massively resourced has a slightly different meaning.

I mean that very significant broadcasters in the UK have an interest in TV3.

Mr. Maguire

It has wealthy backers, but that is not the same thing as saying that it is massively resourced in the sense that the money is available to it. I do not want to get lost in that argument. We took into account the different factors that apply to public service broadcasters such as RTE One, on the one hand, and companies such as TV3, on the other. We reflected that in taking a scaled approach after long and hard consideration of all the different factors.

Did Mr. Maguire say that RTE is expected to have 90% subtitling, or was it 100%?

Mr. Maguire

RTE Two is to reach 90%. I had better be careful and consult the figures. After ten years, RTE One will be at 100%, and RTE Two at 90%. TG4 will be at 80%, and TV3 at 60%.

Did the BCI set the scale for TV3?

Mr. Maguire

Yes.

Did it have nothing to do with the other three broadcasters?

Mr. Maguire

No. Under the new Act we are required to draw up codes, including access codes, of which this is part.

Among the concerns of those represented today, and the committee, are the fact that, those being the codes set for subtitling, if the BCI were the BAI regulator, it might have difficulties regarding content regulation. How would it benchmark RTE against TV3? The public service broadcaster must produce programmes such as "Prime Time", which is expected by Irish audiences, whereas TV3 does not have to produce such a programme. How would it benchmark that and evaluate the content if it were also the single independent content regulator?

Mr. Maguire

I would like to make two points in that regard before handing over to my colleagues. It is not RTE as a whole but RTE One. We are talking about the individual broadcasters, which are RTE One, RTE Two, TG4 and TV3. All those have different parameters. We did not simply draw up a blanket, across-the-board rule regarding the public service broadcaster. All the broadcasters had different targets. One must bear in mind that TV3 was starting from a baseline of 12%, its current provision, while RTE One had a baseline of 55%. That is another example of how one must take different approaches to the different broadcasters. I do not want to give the impression that we would take a blanket approach regarding the first three of those and then treat TV3 as a special case — the criticism levelled at us — because it happens to be a commercial broadcaster. That is not the case. Perhaps Mr. O'Keeffe might come in on that.

Mr. O’Keeffe

Regarding how one benchmarks something, to me it is quite straightforward. We have a contract with each radio station, which has certain obligations and programming commitments that it must deliver. We review those annually regarding performance. RTE operates under a charter, which is set out very clearly. It is relatively easy for an independent body to review whether it has complied with that charter. TV3 will also have commitments and obligations to which it must adhere, and we monitor it on that basis. The principle of monitoring is key. The obligations may be different, depending on the nature and type of broadcaster, but the principle is that there should be an independent authority to monitor compliance with the relevant obligations.

Why has the BCI been so slow to roll out digital TV?

Mr. Maguire

I am not dodging the question, but it is really not something over which we have control.

Has the BCI a view on it?

Mr. Maguire

Our broad view is that we welcome it. It is obviously a very good technical development. We have technical people who support the Department in this regard. My personal view is that I would like to see DTT. This fundamentally underlines our approach as an organisation. Our primary aim is to provide choice. The more platforms and ways there are to provide that choice, the better, particularly if it is supportable commercially and by the powers that be.

I agree with that. I am more interested in finding out why we have been slow to deliver. The BCI technical people have been working with the Department. Have there been technical problems?

Mr. Maguire

We do not have responsibility for delivering it at all.

Mr. O’Keeffe

I would like to intervene briefly on that. The 2001 Act established a digital regime. If the Deputy recalls, there was one applicant. The application did not come to fruition and there were no other applicants. That was a competition run by the Department, not the BCI. Once that had happened, there was a requirement to go back to the drawing board and effectively state "We want to bring this in, how may it best be done?" That is the stage we are at. The Department is looking at ways of introducing digital transmission and is involving interest groups such as the BCI and others in determining the best way to introduce a digital regime. We are committed to working with that process and if licensing is to be a fall-out from that initiative, the BCI will be in a position to facilitate this immediately.

I want to return to the issue of the content regulation. I have two other questions about ComReg which relate to Ofcom and the disbursement of the broadcasting fund. I am interested in these matters because the screen producers will come before the committee later.

To be clear on the content regulation, a certain standard is expected from RTE because of the ethos that exists there. It is expected because it is a public service broadcaster. For example, last week when the bombs went off in London — a dreadful state of affairs — I have no doubt that the vast majority of people tuned into RTE to see what was happening. Indeed, there were people from RTE reporting from London. How is that type of coverage measured against a commercial station which does not have the same content and ethos as regards broadcasting?

Mr. Maguire

We would not conduct, in any sense, a qualitative evaluation of one service's news broadcast relative to another's. The idea behind the legislation, as I understand it, is that, in the first instance, the BCI is essentially charged with drawing up codes which set out matters that have to be dealt with. I refer here, for example, to children's advertising, subtitling or whatever, as well as matters relating to taste and decency. This is an important aspect of the commission's remit.

Let us say, for example, that the BCI becomes the broadcasting authority of Ireland, the body responsible for public service broadcasting, content regulation and commercial content. How will one be benchmarked against the other? Will it be in the same manner that subtitling has been done, with more being expected from a public service broadcaster and less from a commercial body?

Mr. Maguire

I will just finish the point I was making because it answers the Chairman's question. We do not indulge in a qualitative assessment of the actual broadcasting that is done. In respect of subtitling, as a specific requirement the BCI was tasked with drawing up rules and regulations to ensure that people who were disadvantaged in terms of hearing or sight or whatever had proper access. We had to set about drawing up a code in this regard. That is why we were able to set down particular targets. However, we will not be directing individual broadcasters to carry out their business in any particular way. Of course we have the standards in place by which they will be judged if they should fall short in terms of breaking the advertising rules or——

The meeting must suspend because a fire drill is taking place. We will recommence as soon as it is finished.

Sitting suspended at 2.44 p.m. and resumed at 2.53 p.m.

I have been informed that a fan caught fire on the fourth floor. Thankfully, the fire alarm worked.

I want to ask about the role of Ofcom in the UK, which is similar to ComReg and the BCI in Ireland. Is that the model the BCI would like to see here? We had a discussion earlier on the broadcasting fund and I would like Mr. Maguire to advise the committee briefly on the current position in respect of that fund.

Mr. Maguire

I would like to conclude the point I was making before the suspension. The Chairman had asked me how it is that the public service broadcaster might be judged in a particular situation. The public service broadcaster operates under its charter and its performance would be judged against that charter. It is not like comparing one station with another on a qualitative basis. An independent broadcaster would operate in accordance with its licence, which would be the contract, but RTE operates in accordance with the requirements of its charter in respect of programming and so on. All broadcasters are subject to the codes that are being drafted, which is a different side of the same coin.

Ofcom was the child of convergence regulation, where all regulation of telecoms and content are dealt with by one large regulator. In this jurisdiction, the BCI has developed as a content regulator and we believe it is best suited to doing that. Ofcom was conceived approximately eight years ago and has gradually come to fruition. In circumstances where convergence regulation exists, breaking down then occurs. In the case of Ofcom, a content board has been charged with the regulation of content. On one hand, everything is brought together but, on the other, everything is diversified to a certain extent.

Should there be a model of convergence between ComReg and the new BCI?

Mr. Maguire

I do not believe so. If one looks at the experience of Ofcom, which is a model of a converged regulator, it has now diversified to some extent and a content board has been set up to do precisely what the content regulator would do in any event. What is the necessity, therefore, of bringing it all together in the first instance?

The final point related to the programming fund.

Is it not the case in the UK that the BBC has its own board of governors and that the regulator does not have a content role per se in public sector broadcasting? What does Mr. Maguire think of the criticism by the director general of RTE that the BCI fulfilled its obligation as a regulator of content? I refer in particular to the amount of news and current affairs in much of the independent sector, which has not fulfilled basic licence obligations. Given that, is the BCI not disqualified from this legislation as the overall regulator?

Mr. Maguire

The thesis behind the Deputy's question is incorrect. I am unaware of broadcasters that have not complied with the requirement of the 20% of news and current affairs. I was also unaware of any criticism levelled at the BCI on a failure to enforce that. We have a policy which has been applied consistently since the establishment of the IRTC, the predecessor of the BCI. The policy is that there should be 20% news and current affairs. That is part of the licensing commitment given by each broadcaster and we monitor that. I am unaware of broadcasters that are not complying with it and I am also unaware of criticism by the director general of RTE for failing to enforce it.

That criticism was made at this committee a few weeks ago.

Mr. Maguire

It related to access rules and had another basis. However, if the Deputy wishes to take the matter further, we will give him any detailed information that he wants. The chief executive will deal with the issue, because it is an operational detail.

Mr. O’Keeffe

What has been said is certainly is not the case. All stations are required to achieve a requirement of 20% and we monitor each four or five times a year. The record is very good with regard to compliance and we can back this up with information if necessary. We insist that stations deliver the requirement and they have done so.

What is the situation with regard to the broadcasting fund?

Mr. Maguire

Observations were requested by Brussels in respect of the proposals put by the Government. Those requests were submitted at the very last stage of the expected date of approval by Brussels and have further delayed the matter. However, all of our structures are in place, our staff are engaged and our policies are in line. This was all elucidated at a public session last week in Galway in connection with the film fleadh. We are ready to go, are waiting for approval and have been for some time.

I thank delegates for appearing before the committee. We have gone over time as a result of the fire alarm. I look forward, with the committee, to engaging with representatives of BCI in the future. I thank them for their helpful document.

Sitting suspended at 3.01 p.m. and resumed at 3.02 p.m.

I welcome representatives from Screen Producers Ireland: Mr. David McLoughlin, chief executive; Mr. James Hickey, chair, SPI broadcast committee; Mr. Andrew Lowe, chair, SPI film committee; Mr. Gerard O'Rourke, chair, SPI animation committee; and Mr. Steve Carson, independent producer and member, SPI broadcast committee. Ms Niamh Sheridan, executive officer, SPI, is not here. The allotted time for this presentation was scheduled to be shared with that of the Independent Broadcasters of Ireland. However, its chairman, Mr. David Tighe, is away and therefore representatives cannot attend today.

Mr. Hickey will make a presentation for five minutes, and we will then take questions. Some committee members have had to attend another meeting and will return at a later stage. As we are running behind time, we hope to complete the session as quickly as possible.

I wish to draw attention to the fact that members of this committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Furthermore, under the salient rulings of the Chair, members 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.

We received Mr. Hickey's paper, for which we thank him. As members of the committee and I took the opportunity to read it, perhaps he would summarise.

Mr. James Hickey

Screen Producers Ireland is the industry body representing independent audio visual production companies in Ireland. We have more than 170 members, the majority of which work in independent television production companies. Those we represent include producers of drama television series such as "The Clinic", "Ros na Rún" for TG4 and "Killnascully" for RTE; entertainment series such as "Househunters", "You're a Star" and "The Dunphy Show" for TV3; and important documentaries, such as the recent "Haughey", on which our colleague, Mr. Steve Carson, was a producer. We also represent producers of Irish feature films, such as "Intermission", "Man About Dog" and "Adam and Paul".

We are seeking a fair deal from RTE on three issues in the forthcoming legislation, namely, programme rights ownership, investment in indigenous feature films and guaranteed levels of indigenously produced children's and animation programming. As creators of programming commissioned by RTE, independent producers should retain ownership of all rights of these programmes. The independent production company, as licensor, grants RTE an exclusive licence to broadcast the programmes in the territory of Ireland for a fixed term with renewable periods. The producers should retain the rights to further exploit the programmes outside of Ireland and RTE can benefit from a share of these revenues. This will allow RTE benefit from a thriving, domestic and sustainable industry which will not be solely dependent on RTE.

Internationally, audio visual production is one of the fastest growing industries in the world, worth in excess of €4 billion annually. Some 85% of this income is generated for the benefit of the United States of America, where audio visual entertainment products are the largest single industry export. Such exports have a cultural as well as economic and strategic impact on the world as part of a major commercial activity. Our nearest market and competitor, the UK, earns €970 million annually in worldwide audio visual export sales. Both of these markets follow the model where the production company that develops and produces the programme retains ownership in the programme. As an English speaking country with a developed production infrastructure — and with the right measures — Ireland could benefit more from this vitally important cultural industry.

The opportunities exist in Ireland to compete effectively in this international marketplace by creating a new significant export market for television programmes with a potential annual worth to the national economy of €50 million to €100 million. Independent production companies which retain all rights, except RTE broadcast rights, are best placed to maximise the market potential of those rights to the benefit of both RTE and the independent production sector. Facilitating the development of this export market will, in turn, substantially increase the numbers employed in independent television production in Ireland, which, according to IBEC's audio visual federation review for 2004, stands at 5,351.

If the following key provisions are incorporated into the upcoming broadcasting legislation a new era in Irish television programme production will be opened with Ireland achieving both local and international success both culturally and commercially. These underpin the core issues of creative diversity, competitiveness, employment, wealth creation and greater value for money for the State and licence fee payers.

The first provision is the vesting of international ancillary rights in television programmes produced by independent production companies for RTE. This will leave the national broadcaster with the broadcast television rights on RTE services to enable it fulfil its public service remit.

The second provision is a significantly increased investment in indigenous feature films by RTE as part of its public service broadcasting remit. This is the case in virtually all other European countries and will enable the national broadcaster to showcase the indigenous audio visual culture that is the Irish film industry.

Third, children's, young people's and animation programming quotas should become a statutory obligation for RTE in order that Irish children see Irish stories told on RTE. Such quotas are common in other countries to ensure that their children see their stories.

Apart from the three main provisions, we also want an increased guaranteed annual level of funding to be allocated to TG4, particularly in light of the Government's recently announced intention to grant the Irish language station its independence. In addition, we believe that, as is the case in the UK, statutory recognition be accorded to Screen Producers Ireland to provide greater clarity and coherence within the content creation and audio visual production sector.

With regard to the issue of royalty rights, we had a meeting in Australia with its Screen Producers Association last year as part of a work programme for the committee. Its members expressed the same difficulties. They produce programmes for the networks and the networks get all the benefits. They cannot benefit from merchandising etc. I presume the producers here have the same problem.

Mr. Hickey

It is exactly the same point. Some countries have granted those rights while others have not.

I presume that Mr. Hickey referred to all broadcasters in this context and not simply the public service broadcaster.

Mr. Hickey

As regards the ownership of rights, yes.

Also, in respect of programmes, Mr. Hickey mentioned the public service broadcaster a number of times but did not mention the private commercial broadcasters.

Mr. Hickey

One must make a distinction when it comes to a commitment to feature film production investment and to children's and animation programming. Essentially, one must make a distinction between public service broadcasters and commercial broadcasters, because the public service broadcaster has the benefit of the licence fee. The kind of programming that a public service broadcaster is expected to produce includes more expensive programming which might not be seen to be commercially viable.

Can Mr. Hickey clarify for the committee whether the members of Screen Producers Ireland produce programmes for private broadcasters?

Mr. Hickey

Yes they do.

The joint committee discussed community television some time ago when representatives from that sector came before it and a new channel is also starting up. Presumably the producers also expect to get business from those areas.

Mr. Hickey

Hopefully we will.

I welcome the representatives from Screen Producers Ireland and thank them for the four or five briefings they have given to the joint committee over the last couple of years. It has always informed our discussions as it will in the forthcoming debates on the proposed broadcasting authority Bill. I recall that the producers' list of requests always included something about a Dublin television channel. Is Mr. Hickey satisfied that this requirement will be met shortly or did he envisage something different? I understand that some of his colleagues were of the opinion that RTE could operate a channel specifically for Dublin. While people in other parts of the country might view RTE One as being a Dublin channel of sorts, people involved in local government in Dublin feel that the different regions of Dublin receive inadequate coverage and only do so when disasters happen. Do people still hold that opinion?

Mr. Hickey made what appears to be an important point in respect of royalties. On that issue, when the independent sector gets a price from the State broadcaster, does it not already include the possible spin-offs from the product in other markets? Is that not the existing situation? Mr. Hickey's point regarding children's television is important if we want to emphasise aspects of our own cultures in the future and I welcome it. The joint committee is supportive of the comments regarding statutory recognition.

Before the early 1990s, this was a wasteland. I congratulate Screen Producers Ireland and its members on all the recent work and programmes, including the recent famous documentary. They are an important development in respect of Ireland's history and how we view ourselves. What kind of potential does Mr. Hickey envisage if the legislation is framed correctly from the point of view of his members?

I do not understand Mr. Hickey's position as to why TG4 needs statutory independence. Mr. Hickey makes the point about the need to have TG4 statutorily independent or statutorily recognised in the new broadcasting Bill. Surely, given the provisions of the 2001 Act, if implemented, there is no need for further statutory recognition in that regard. Second — I apologise for missing the start of Mr. Hickey's presentation — I have not yet heard anyone speak about the fund for programming which the Minister made available from the new increased licence fee. Perhaps Mr. Hickey mentioned it in my absence. However, it seems to be remarkably slow to appear.

The joint committee has had a response on that topic. I explained that the Deputy was at another meeting. We had a response from the BCI stating that it is ready to proceed and that everything is in place, but the EU has asked a number of questions. It has been held up at EU level.

I thank the Chair. Mr. Hickey is more than welcome to spill the beans or add to the BCI's response if he wishes. Sometimes it is difficult for people in statutory authorities who must be careful about what they say. Perhaps Mr. Hickey can add some colour to that description as a representative of an independent association.

I would also like to hear Mr. Hickey's comments on the debate regarding TG4, as to whether it should be free-standing and independent, part of the main national broadcasting service or otherwise.

Mr. Hickey

Regarding TG4, Deputy Eamon Ryan's point is correct as there is a statute which enables the independence of TG4. As far as TG4 is concerned, our primary concern is that it is properly funded on an independent basis. TG4 itself appears to believe that independence is the way in which it will gain proper funding and we support that. As regards Deputy Broughan's point about price, I will ask my colleague Steve Carson, who has experience both here and elsewhere in terms of dealing with independent productions, to discuss what is or is not included in the price.

Mr. Steve Carson

With regards to RTE, a price is struck to cover what it physically costs to make a programme. Thereafter, an allowance called the production fee is made which is the supposed return to the producer. In reality, RTE essentially dictates the cost per hour and consequently, most producers delve into their production fee to get the work done. The current terms of trade for RTE state that in return for that payment, the producers assign copyright to RTE. This is an entirely different position to that which now exists in the United Kingdom. My company is registered in both Dublin and Belfast. We are in the unusual position of dealing with BBC 1 and Channel 4 where we keep and exploit the rights and also with RTE, where a different situation pertains. However, although RTE owns the copyright — or rather the copyright has been assigned to RTE — it has an allowance whereby if programmes are sold, the independent producers are entitled to 30% of what is called the back-end, after many distribution costs and other items have been stripped out. My company has experience of making programmes for RTE which have been distributed and the returns to the company have been nugatory.

Essentially, we argue that we are the best people to exploit these programmes. RTE has a huge catalogue, international sales and programming is a specialist field and we are best placed to do it. For example, our Belfast company is making a Channel 4 documentary. Because we own the rights outside the United Kingdom as well as any other ancillary rights such as DVD rights, we were able to collect a distribution advance of £40,000 for a single documentary. Clearly, more money comes into the industry in general and to my company in particular through a simple assignation of rights.

Is Mr. Carson's company paid for its production at a similar rate to other TV channels throughout the British Isles and further afield?

Mr. Carson

Can the Chairman repeat the question?

Mr. Carson stated that he was paid a certain amount for his production by the public service broadcaster. I presume that its negotiated rates of scale are probably similar to what one would get from the other channels just mentioned by Mr. Carson.

Mr. Carson

No. For historical reasons, until recently, RTE had extremely low licence fee settlements for a number of years. Irish production rates are approximately 60% of those pertaining in the United Kingdom. Typically, an Irish budget for a documentary would be €90,000 per hour, which sounds like a large amount. The equivalent for a British main channel — nothing special — would be £150,000 or £160,000 per hour.

Has Mr. Carson's company done some work for the commercial stations here?

Mr. Carson

As a body, part of the problem we face is that RTE is the only show in town. We have worked for TG4, but it is partially within the national broadcaster fold. As for TV3, the joint committee put to the BCI——

Did you get more or less from the commercial broadcasters?

Mr. Carson

TV3 simply does not commission from independent producers, except in very limited circumstances.

Does Mr. Carson think a national station with a national licence, which will come up for renewal at some stage in the future, should be required, perhaps by legislation, to commission programmes from independent Irish producers rather than simply broadcast foreign-produced programmes?

Mr. Carson

There is a clear expectation, not just on behalf of the industry but also on behalf of the viewers, that when an independent channel is set up, it will contain Irish programmes. I understand that TV3 is within the terms of its remit in the sense that European legislation allows it to count programmes like "Coronation Street" as European — read domestic — programming. We would call for TV3 to give very clear commitments to produce Irish programmes when its licence comes up for renewal.

Regarding the hour-long documentary, is it still cheaper for the national broadcaster to outsource to Mr. Carson's company rather than make, for example, Mr. Carson's famous recent documentary in house?

Mr. Carson

I do not know. RTE's accounts have not been analysed in that way. I think Mr. Hickey has done some work in this area.

Mr. Hickey

RTE's accounts do not show specifically how much the cost of the production of internal programming is on a per hour basis so that we can establish the relationship between what we produce and independently produced programmes. We believe that independent producers produce programming both creatively and economically on a more cost-efficient basis but we do not have any formal evidence for this.

My colleague, Gerard O'Rourke, will now say a few words about children's programming.

I have looked at the schedule for this week from the RTE website this morning. If a person were to tune into RTE Two, he or she would find 63 hours of children's programming from Monday to Sunday. Of the 63 hours, eight hours are produced in house by RTE. The other 55 hours are made up of acquired programming, predominantly animation. Within the 55 hours, three are composed of programmes acquired or commissioned from the local industry. Some of these programmes are re-runs — they were made in a previous period. Irish children's programmes on RTE, animation or otherwise, represent less than 6% of the output in any week.

Children watch "Barney and Friends", "Tractor Tom", "Rugrats", "Tracey McBean" and "Fairly Odd Parents" everyday, Monday to Sunday, and do not get to see Irish stories or projects made locally by a very vibrant community that is servicing the international market very well. The animation sub-committee of SPI has gone to great lengths to ask RTE to establish quotas and give a commitment rather than buy in children's programming. A report produced in 2002 revealed that RTE had the second largest output of animation, acquiring 1,400 hours, with less than 6% of the programming originating in Ireland.

On a point of information, is Mr. O'Rourke including all programmes or is he just talking in terms of animation? When one thinks about it historically, RTE has certainly produced some very famous children's programmes that became icons of culture of the time. Is Mr. O'Rourke saying that this is no longer the case? Is he talking purely about animation or is he looking across the entire territory?

I looked at the Monday to Sunday schedule for RTE Two for the current week. There are a few drama series for children in the schedule, for example, "Foreign Exchange". The eight hours that are produced in house include "The Saturday Show", "Sattitude", "The Links" and "The Den". We have Dustin and other characters. However, 90% of the rest of the programming is acquired animated programming.

We will move on because we must finish up. It was important to clarify those issues.

Mr. Hickey

My colleague, Andrew Lowe, will say a few words about film production.

Mr. Andrew Lowe

I will address Deputy Broughan's question about what we see as the potential if we get the legislation right. The film industry has had opportunities recently to address other Oireachtas committees about issues relating to the film industry. The industry has enjoyed a resurgence over the last ten years or so. This can be attributed primarily to two factors: the existence of the tax incentive, section 481 of the Taxes Consolidation Act 1997, and the re-establishment of the Irish Film Board. A considerable amount of good work has been done in developing and producing indigenous films for the local market.

One crucial element that is missing is investment by the national broadcaster in indigenous films. It is no exaggeration to say that Ireland is unique in this respect. Every other European broadcaster which receives some form of licence fee or national subsidy invests in film as part of its role as a public service broadcaster. In the UK, the BBC invests a minimum of £10 million per year in feature films. Public-private television channels like Channel 4 and ITV in the UK also invest in film production. There is very significant investment from both private and public channels in France. This investment puts Irish producers at a competitive disadvantage when it comes to trying to finance local films for the local market compared with their European counterparts.

The success of Irish films in recent years, for example, "Intermission" and "Adam & Paul", have demonstrated that there is a real appetite amongst Irish audiences for Irish films. Given that RTE receives the public sector licence fee and made a commitment to invest in film as part of its argument for the licence fee increase, we would like to see that in this legislation.

Would SPI also like to see in the legislation an obligation on the commercial sector to purchase home-produced programming?

Mr. Lowe

The argument in terms of investing in film is couched in the context of the licence fee. Part of the purpose of the licence is to invest in cultural programmes like feature films. When it comes to the private sector, my company has sold two films to TV3 in the last year so it is active in the area.

Mr. Lowe did not answer my question. We have had a long day. Would Mr. Hickey answer my question in order that we can have the answer for the record? Would SPI like to see a similar system in place whereby commercial television stations — a new station will start shortly — would also have an obligation to buy home-produced programmes?

Mr. Hickey

Yes. We want TV3 to be required to commission more home-produced television programmes. The Broadcasting Commission of Ireland admits, if asked, that it was unable to enforce a sufficient level of indigenous production upon TV3.

Leave the matter with us.

Has SPI had any contact regarding indigenous production with promoters of the two new stations that will allegedly come on stream in the coming months?

Mr. Hickey

Is the Deputy talking about new stations?

Mr. Hickey

I am not aware of the stations to which Deputy Broughan is referring.

We are supposed to get a Dublin channel.

Mr. Hickey

A representative from this channel will appear before the committee shortly.

We wish SPI every success in the future. It should keep up the high quality of work that it is doing and we look forward to engaging with it again in the future. The committee will suspend for two minutes until the other three groups appear before it.

Sitting suspended at 3.28 p.m. and resumed at 3.30 p.m.

I welcome Mr. David Harvey, chairman of City Channel Limited, Mr. Niall Cogley, CEO of Setanta Sports Channel Ireland, and Mr. Michael O'Rourke, joint CEO and founder of the Setanta Sports Group.

Mr. Arthur Blake

I am attending in Mr. O'Rourke's place.

I welcome Ms Eleanor Collier, director of marketing at Setanta Sports Channel Ireland, and Mr. Shane Wallace and Mr. Steve Harris of North West Television.

Before we begin, I advise everyone that we must try to strictly adhere to the schedule. We are behind time due to a false fire alarm. I will allow three five-minute presentations. I ask the witnesses to be brief and to make their most important points on broadcasting authority and regulation.

I draw everyone's attention to the fact that members of this committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Furthermore, under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

Mr. David Harvey

The position of City Channel Limited, which is a private limited company and which will be granted a licence by the Broadcasting Commission of Ireland, is as follows. We will begin broadcasting in September under section 41 of the Broadcasting Act 2001 as a provider of content on cable-MMD. We will broadcast 24 hours per day. Our channel has been mentioned already today and it is great to know we are getting so much advance publicity.

Our service will be available to an initial audience of approximately 400,000 Dubliners by going directly into approximately 110,000 digital homes on the NTL platform. We are promoting a mix of lifestyle entertainment and information. We are not involved in sports or news programming, only subjects we feel are of interest to ordinary Dubliners, such as property, motoring, fashion, happenings, finance, leisure and some degree of current affairs. We will mix our output with ongoing news, weather and traffic updates and a variety of texting and competitive opportunities. City Channel wants to be a relevant, innovative and affordable medium, the first of its kind in Dublin. It will hopefully stimulate a greater interest in local television in Ireland, which has not, as the BCI will inform the committee, been terribly forthcoming.

Our simple submission is as follows. We want the terms of the Broadcasting (Funding) Act 2003 to be reviewed to allow local television services to benefit from the fund, which has been mentioned often today. It is financed by an amount equal to 5% of the television licence fee and is aimed at the production of television and radio programmes in the areas of culture, heritage, the Irish language and adult literacy. At present, the fund stands in excess of €20 million. Under the terms of the Act, the scheme may only fund television programmes that are broadcasting on a free television service providing near universal coverage in the State or on a cable or MMD system as part of a community content contract under section 39 of the 2001 Act.

As the scheme stands, it effectively limits participation to RTE television, TV3, TG4 and organisations that hold a provision of community content contract. TV3 has indicated that it may not wish to take part in the scheme. In this event, programmes produced under the scheme will only benefit RTE and TG4, which are already in receipt of substantial licence fee incomes. In 2004, these amounted to €166 million. We contend that this clearly defeats the purpose of the Act and that persons or companies holding provision of MMD-cable content contracts are unfairly excluded from the scheme. We ask the committee to review the 2003 Act to allow local television services to benefit from the fund at the discretion of the BCI.

Mr. Niall Cogley

I thank the Chairman and the committee for this audience. Our presentation will hopefully be as brief and succinct as Mr. Harvey's. I will start by asking Mr. Blake, my colleague from the Setanta group, to briefly outline some of our services and reach. I will then try to do what Mr. Harvey has done in terms of indicating what we are seeking.

Mr. Blake

The Setanta Sports Group, which is Irish-owned, is a broadcaster of televised sporting programming in international markets. The group was established in 1992 by Mr. Michael O'Rourke and Mr. Leonard Ryan, who remain joint chief executives of the group. Setanta is headquartered in Ireland, a conscious decision on the part of the two chief executives, and currently employs in excess of 150 people, with approximately 100 of these being in skilled employment in Ireland. The Setanta Sports Group is part of the Irish television industry and is recognised internationally as being a serious player in international sports rights markets.

The group currently owns or operates nine television channels on the Sky digital platform, broadcasting a range of sporting content to television viewers in the United Kingdom and here. In addition, the group is involved in the North American Sports Network, which broadcasts sporting content into Germany, the Netherlands and Switzerland. It will expand into further European markets in the near future. The group also has some significant North American operations and is available on the major US satellite and cable networks. It recently launched Setanta Sports North America, a sports channel dedicated to Irish and European sporting content on the direct television platform. This channel is available in 12 million television homes in the United States of America. The group has investments in other businesses, including local radio in Ireland, and in new media operations.

Mr. Cogley

Setanta Sports Channel Ireland produces and commissions a range of sports programming. Some of these programmes are free to 100% of the Irish population, provided they have the right reception devices. Setanta Sports Channel Ireland is already available in over 850,000 homes in Ireland. Our content range includes commercial properties such as Formula 1, the English Premier League and the Scottish Premier League in football and the Celtic League in rugby. We also produce and commission community services. We produce coverage of events such as the Dublin county championship, to which we hope to add by covering other county championships and local events. We are seeking and would appreciate the help of this committee and others in order to achieve this move.

One of the signature events we produced over the past year was the Setanta Cup, which achieved the arrival of over 2,000 Linfield fans to Dublin. This would not have been expected 12 months ago. Not only did they emerge with their integrity and good reputation intact, they also emerged with the trophy. When the Minister launched the Setanta Cup, he indicated that agreements between leaders and politicians were good but that they needed to be followed up by genuine contact between communities. This is something the Setanta Sports Group has achieved.

We have some concerns about the proposed legislation in respect of the funding that my colleague, Mr. Harvey, mentioned. We urge the committee that the legislation be future-proofed rather than concentrating on traditional definitions of free to air, namely, that the reception device definition be specifically enlarged to include modern technological developments, such as satellite reception and DTT, digital terrestrial reception. We are concerned that this may not happen. We would also like sport to be defined, in its own right, within the legislation. At present, it can be potentially included as a drop-down category within the "cultural" headline.

We also submit that the legislation provides for 5% of the total licence fee to be made available to broadcasters, hopefully like ourselves, who apply. We would encourage that the 5% not be an upper limit.

Mr. Steve Harris

I thank the committee for providing us with the opportunity to present the case for independent local commercial television. The committee has received our submission and our main point concerning legislation is that a major opportunity was lost when the 2001 Act enabled and then disabled the potential for local television. Mr. Wallace and I have experience with a number of local TV stations in the UK and Northern Ireland, including Derry, Southampton and Portsmouth. At the latter I was briefly managing director, a painful experience from which I have learnt a great deal.

Principally, I learned that the basis for building a successful local television station is easy access, broad availability and a free to air service with no subscriptions and no conditional access. The customer should be able to simply click and view the channel. That involves multi-platform availability, conventional roof-top aerials and set-top boxes, cable MMD, mobile phones, laptops and mobile computers and the rapid roll-out of broadband to domestic computers and computer networks. NTL has carried out an interesting 3G experiment in Oxford broadcasting local and national TV to mobile phones. At its core the basic distribution system needs to originate in a terrestrial transmission system and at present that must be analogue. In any future planning for digital media, local television needs to be taken into account. In the transition to digital the Broadcasting Act 2001 did not enable local TV yet spectrum scarcity is not a problem in Ireland. Local TV could be enabled and licensed now on analogue to build awareness and audiences before moving into the new digital environment. In view of this we ask the committee to consider issuing dual standard licences, enabling licensed broadcasters to broadcast in analogue and then transit through to digital.

There is a new product on the market, a new transmitter made by ABE, that can broadcast in both analogue and digital and will switch automatically between the two standards at no cost. The other factor that increases the possibility for local television, compared to when we first started trying in 2000 and 2001, is the plummeting cost of technology and the fast developing capabilities of the new technologies, making the business model for local TV more viable. I refer to some examples contained in our submission. A three-chip, broadcast-quality camera, editing hardware and software costs about €7,000. Broadband will allow rapid and cost-effective content transfer, allowing local TV to build a large effective interactive local network. The new dual-cast transmitters are around £15,000-£20,000, which compares favourably with what they cost recently.

We propose a network of local commercial TV stations, perhaps mirroring the highly successful network of local commercial radio, operated extremely successfully in Ireland. This is a no-cost option for the local community and is a form of local TV funded from various forms of advertising, not using local budgets or money from the Government. However, the network must fit into a broader strategy for rolling out the new digital network. It has been powerfully pointed out to me that it is easier to roll out a national network first and then fit in local television around it. There is no spectrum shortage and there is no problem slotting a number of local channels between the national network. Equally, with new technology, it is possible to insert local programming into a national multiplex if space is made available, preferably with some legislative power behind it. Digital terrestrial TV is an urgent need because, as the committee is aware, digital switch-over begins in the UK in 2008, including Wales and the west country. Spill-over programming in Dublin and the east coast of Ireland will disappear very soon after. If there is not a digital replacement people will switch to satellite. We argue that local television could be a major component in drawing people to digital terrestrial television. If that is an original part of the menu offered to viewers in the future it will be a powerful and effective weapon. Mr. Shane Wallace will now speak on programme content and programme content generation.

Mr. Shane Wallace

Mostly, our schedule will be planned with local news and current affairs. We plan to have two 30-minute local news bulletins each day. On current affairs we will try to do a local programme where minutes from the local authority meetings are recorded. That will happen at least once a month. We are currently considering local documentaries, advertorials and community programmes. Community groups can avail of a service whereby they can produce their own programmes, including short features. In this way the channel can be used as a platform to air the views of the group. This will be edited, more or less, by us.

There will also be entertainment and social features. As well as delivering local services through digital television, which will not happen for a few years, we want to implement a system whereby people who are not frequent users of computers can access social welfare details and information on student grants and car tax. We are currently trying to develop that structure with local authorities.

We are also trying to develop services through educational programmes and health services. Some pilot programmes that we examined in the UK involved people in rural areas having access to their nurse through the digital platform. We are considering a number of platforms to deliver content.

I thank the delegation. Mr. Harris's presentation states that there should be provision for three hours per day of advertorial material. Does this mean that three hours per day be should be spent advertising the station's programmes?

Mr. Harris

No. Advertorials are enabled by the broadcasting act of 1996 in the UK. The big advantage of local television over local radio is that it can demonstrate. If one has a product, such as a car or a washing machine, it can be demonstrated on television. Rather than a 30-second commercial an advertorial is a ten or 15-minute programme feature paid for by the advertiser.

On local American television the local second-hand dealership has its own programme for half an hour. There is a contrast between the presentations of Mr. Harris and Mr. Harvey on the potential of local television. Although I welcome the imminent arrival of a Dublin city channel, Mr. Harvey's presentation suggested it would not provide much in terms of news and the community. The presentation by Mr. Harris, concerning the north west, demonstrates the direction in which we should go. This would give the local authority a chance to be on air. We had the old cable link Dublin channel and on 5 September we will have another channel but will it be any different? Will it be the 56th channel on the NTL digital package? Deputy John Gormley used to say that there were between 50 and 60 channels on American television, yet there was nothing to watch. Is it possible that the ambition of Mr. Harvey's group is too low and the plan suggested by Mr. Harris is the one we should follow? Obviously Irish broadcasting will need to be developed.

In answering that question, Mr. Harvey could advise us if any payment is received from NTL for broadcasting. I presume it is part of the basic NTL package.

Mr. Harvey

The answer to that is "No". I made it very clear that investors in our company are investing on a risk to reward basis. It is up to us to make a profit on this venture from advertising and sponsorship.

I will respond to Deputy Broughan's point although I do not know if he asked a question or simply made an observation. This is not a competitive licence. Anyone can get a licence provided one can find a company to carry the service. If one could find a carrier in the city there could be ten, 15 or 20 channels and therefore we have no obligations.

This legislation was enacted only three years ago and that was the time to put handcuffs on people concerning output. There are no restrictions on what we do but we are trying to formulate a mixture of programmes people will watch. That involves distilling content to the lowest common denominator. If we wanted to run a news channel we would focus on that but we would be foolish to do so when there is a competitor such as RTE. We would be foolish to run a sports channel in competition with a provider such as Setanta. We find people tell us about their lifestyles and events that happen in Dublin and want information on leisure. That is the type of channel we try to provide. We are not encroaching on Mr. Harris's space. He is in a catch-all community based operation. Ours is a commercial local television channel. We must focus our content exactly at that. That is the only observation I can make.

The legislation allows for specialisation. If somebody wants to run a news channel or focus on local government, he or she is perfectly entitled to apply to the BCI to do so. Finding the carriage to do so is another matter entirely.

Mr. Harris

The reason we chose this route is that it is quite impossible to deliver television in the north west and across the west coast of Ireland unless terrestrial transmission systems are used. If one delivers local programming it must contain a large amount of news because that is what will set it apart. If it is not local and just shows re-runs of "Bewitched" then it is just one of 50 or 60 channels. The one aspect that can set it apart with which nobody else can compete is producing local content and news in the broadest sense of the word.

Mr. Harvey

I wish to comment on that.

One moment please, Mr. Harvey.

It was Bruce Springsteen who said, "57 channels and nothing on". Mr. Cogley and Mr. Harvey both make similar applications to us, to whisper in the Minister's ear that the Broadcasting (Funding) Act 2003 should be extended to programme makers providing services on NTL or Sky. A delegation from Sky was before us this morning and it was interesting to hear their views on the world.

As a licence payer who is quite happy to see money being given to programme makers outside of RTE, I am unhappy as someone who does not subscribe to Sky or NTL that public money is diverted to a channel to which the public does not have access. I understand that the parties argue for it but the case seems remarkably weak. As many people cannot afford to buy into Sky, why should we provide public money for an exclusive service for which one must pay a significant amount of money to access? I cannot see that the argument stands up.

It was interesting to hear about Mr. Harris's experience in Portsmouth. I had the pleasure of being on Channel 9 in Derry.

Mr. Harris

Channel 9, that is correct.

A friend recorded me and it was great. I was pleased to be on it. Will Mr. Harris give us the background as to how it works? What platform is it on? Mr. Harris stated that it did not work out in Portsmouth. Is Channel 9 working out? Mr. Harris has made the point that if the main British free to air terrestrial stations such as the BBC go towards a digital platform, Irish customers will not be able to receive them free. When does he expect that to happen?

Mr. Harris

The roll-out begins in 2008. The schedule was originally 2007 to 2010. It is still scheduled to finish in 2010 but begins in 2008. It will be done on a region by region basis and it means switching off analogue. One night it will be analogue the following night it will be digital.

If we do not have a national digital service in that time and BBC is lost overnight to 60% or 70% of Irish households it would be a remarkable sales opportunity for Sky or others that would carry it.

Mr. Harris

It would. That is why there is an urgency in doing a quick review of spectrum. It does not need to take a long time. Spectrum availability for the national marketplace could be immediately followed with a spectrum allocation for local services around the country. It is not difficult or time consuming but it is urgent.

Very much so.

Mr. Harvey

To answer Deputy Ryan's concern, I stated our position is that we would like the fund reviewed to allow television services benefit from it at the absolute discretion of the broadcasting commission. It does not regulate Sky as I understand. As it regulates content providers such as ourselves, it would be entirely at its discretion. That is the nub of my point.

Mr. Cogley

We make the same point. We are regulated in Ireland by choice by the BCI. One does not need to be a Sky subscriber to avail of our service. The programmes we propose funding under the 2003 legislation would be broadcast free to view and unencrypted. Anybody with a satellite dish would be able to receive them.

I need to have a satellite dish.

Mr. Cogley

Our argument is that technology is changing. The number of homes that have access to Setanta Sports is approximately 850,000. That is probably more than the number of homes that have traditional aerials. Technology is changing and satellite reception is better and more reliable than analogue aerial reception. We argue that if we get funding for a particular event or strand of programming we are licensed to broadcast it unencrypted to 100% of the homes in the country. Our submission is that technology is changing and we are concerned that the Act as it was written in 2003 does not provide for the fact that the device of reception is evolving. It is a satellite dish, it was an aerial and it may be something else in the short or medium-term future.

I took the time to look at the channel on NTL in my apartment last night. I have to pay for it as part of the basic package. Does Mr. Cogley receive funding from NTL for providing that service?

Mr. Cogley

Yes

Does Mr. Cogley provide services in Australia?

Mr. Cogley

We have a closed circuit service in Australia.

I was wondering because we had the pleasure of watching Cork beating Kilkenny in Australia. It was late at night in case any members of the press think I took a day off on that important fact-finding trip to Australia last September. I have no doubt it will be written about on Saturday. We watched it on Setanta Sports and we were grateful to be able to see Cork do such a magnificent job on Kilkenny that day.

I welcome the presentation by Setanta today and what they told us in the past. It is becoming a big player. I do not think we are aware of what a big player it is. Having Celtic and Rangers in the same broadcasting outfit is a remarkable achievement. I welcome what was stated on county football and hurling championships and minor Irish sports, such as badminton and rowing, which only get coverage at Olympics time.

Yesterday we read that Setanta poached an important executive from Sky. Could a time arrive when it puts in a bid against RTE for important events in domestic games, rugby or football and despite our legislation we may be in danger of needing to access Setanta in order to view important events? Certain events were designated under the legislation when Deputy Dermot Ahern was Minister for Communications, Marine and Natural Resources. Is it possible that a time will come where Setanta's success means it will beat RTE to the punch in negotiations for events verging on importance such as the Gaelic football all-Ireland quarter-finals and we will have to pay to view them?

Mr. Cogley

I suppose it is possible that such a time will come. I underline the fact that as licensed operators in this territory we are not patch-wearing pirates. We are not visitors who do not make a significant contribution to the industry and to the federations with which we deal. We are an Irish service based in Dublin.

We are proposing an alteration to the legislation that would be specifically related to how we broadcast. In other words, we would select the programming and ensure it is enabled in free view so that 100% of people can view it. We are not making a submission that requests a revision of the listing process. The Government has already been through that process and has determined what events should be in free view. One might realistically have concerns about events that may be deemed peripheral, such as All-Ireland quarter finals, but the sports federations must be free to make a decision in circumstances where we make a bid for such an event. Otherwise, it is up to the Government to broaden the listing process. The sports federations own the events that they broadcast and they enter a tendering process to determine who should broadcast those events. They must work out a balance between promotion and finance. In every territory a decision must be made as to whether the federations want more money, as with Sky's proposals, or better exposure, as with the BBC's proposals in the United Kingdom. That is the perennial balancing act that must be performed. Ultimately, we would hope to be able to get our fair share but we are not seeking a rewriting of the entire landscape. Rather, we are asking that the door to the 5% of the fund should not be closed to us for specific requests that the BCI can accept or reject on application.

That point is clearly stated in the submission.

First, I wish to compliment the delegations on the quality of their submissions. I have a number of concerns, one of which is the numerous references made to the surplus fund or broadcasting reserve that is available. It appears that this fund is over-relied on by various broadcasting groups and aspirant broadcasters. It may not be as beneficial as it appears unless, as has been suggested, the legislation is altered to change the broadcasting funding.

As a sports follower, I believe that there is nothing as bad for the promotion of sport as having a lacklustre, haphazard match of any description, where there is no crowd in attendance, no cheering and none of the excitement that one expects on great sporting occasions. One or two examples of this readily come to mind, although I assure the Chairman that they were not Cork versus Kilkenny matches. However, it can be damaging to the broadcasters and to the sport. I will not say anymore on the issue but there is at least one channel that broadcasts bad matches from time to time. There is also an opportunity in rebroadcasting classical contests from the past, of which we do not see enough. I do not wish to tell the members of the delegation their business, but I can assure them that there is a niche market there.

Before Mr. Cogley answers those questions, with the digital terrestrial platform coming onstream, every viewer in the country will be able to avail of the digital signal. Should the digital platform be independent of the public service broadcaster and should all broadcasters buy space on the platform, similar to the manner in which the national grid now operates separately from the ESB? Perhaps the telecommunications infrastructure should have been kept in place also, but that did not happen. Is what I have described the model that we should advance for all those who will use the digital platform? I ask each delegation to answer that question once Deputy Durkan's questions have been dealt with.

Mr. Cogley

I thank Deputy Durkan for his references to events which might more appropriately be left alone. It is not in anyone's interest to cover an event poorly and to represent a sport badly. Some time ago, it was indicated by influential members within the GAA that there was a fear that over-exposure of matches would encourage supporters to stay away from games. However, we have seen that the opposite has been the case. Proper broadcasting production and support for an event has the opposite effect in that it attracts more supporters. Setanta's arrival has coincided with a significant uptake in coverage, not just from Setanta, but from TG4, RTE and also TV3 of items like the Eircom League, which before the arrival of Setanta, was getting no more than three matches per year covered by outside broadcast. We are happy to have raised the tide for all broadcasters and this is something we have been very conscious of, across the board. In fact, we seem to have attracted, developed and generated interest and value into all the sporting events in which we have expressed an interest in this country. That is simply business or commerce and we are happy to have provided that injection of support.

We have acquired archive rights to Gaelic games and to soccer internationals dating back to the 1970s and we are hoping to broadcast those in the coming year on Setanta Sports. Rather than dominate the discussion, I now ask one of my colleagues to field the question about digital terrestrial television.

Mr. Harvey

My view is that the digital platform should be managed independently. I would also argue that this is a very exciting time for television and communications in general and, without being a crawler, I compliment the committee and its colleagues in the Oireachtas because the legislation is far-reaching. From time to time I wonder why holes are being picked in the legislation because it is way ahead of its time in allowing local television to flourish. Local radio has done an extraordinarily good job for this country and that is probably because the public service broadcaster was excluded from that arena. It employs between 700 and 800 people, has a turnover of between €76 million and €77 million per annum and is a flourishing business. There is the same potential in local television and the structure is there to be used. What the committee should do is encourage the growth of local television and do what it can to make it happen.

Mr. Harris

The argument we would put forward is that local television on a free-to-air basis is not flourishing. It is certainly not flourishing in the United Kingdom. In terms of the Chairman's specific question, the roll-out of the digital platform must be on a mixed economy basis. However, I would caution that the digital platform necessitates a considerable investment and it may well be that the national broadcaster will be required to take a lead and that has been the case in the United Kingdom. Digital terrestrial television really took off when Mr. Greg Dyke led the free-view initiative and that has transformed substantially the delivery of digital terrestrial television. Recent survey work indicates that, given the choice, viewers prefer the free-view option to the Sky option.

I understand that RTE has its own network company that deals with the transmission. That is one of the reasons I put it to the delegation that there should be no obstacles to other broadcasters accessing and using the digital platform. I must point out that as I flicked through television channels last night, I looked at all of the channels, RTE, TV3 and so on, not just Setanta, in case I gave the impression that I was favouring one broadcaster over the others. Also, when I was watching the Australian match, it was not during Dáil time, it was 12.30 a.m.

That was a massive sacrifice of the Chairman's time.

Mr. Cogley

Did the Chairman see the match between Cork and Kerry on Setanta last night?

No, I saw the game featuring Mayo last night.

It is helpful for the committee to provide a platform also to air views before legislation is produced. We will suspend for five minutes to allow the next presentation to be set up.

Sitting suspended at 4.10 p.m. and resumed at 4.15 p.m.

A number of groups are still to appear before the committee. I welcome Mr. Pat McKenna of the Irish Hard of Hearing Association. Before we begin, I advise everyone that the Chair must adhere strictly to time limits. Members of this committee have absolute privilege but the same privilege does not apply to witnesses before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Under salient rulings of the Chair, members 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.

Mr. Pat McKenna

I apologise but we are having difficulty with the SpeedText technology.

Sitting suspended at 4.16 p.m. and resumed at 4.17 p.m.

I welcome again Mr. McKenna and Ms Bernadette Casey.

Mr. McKenna

I am totally reliant on the SpeedText technology. A slight delay will occur between speech and the text appearing for me on screen. Will I read my script?

The executive summary is quite sufficient as the committee has read the presentation.

Mr. McKenna

Our association feels that a single Act should include and update all existing legislation. I am unsure of whether the Disability Bill 2004 has become law, but a section in the Bill amends the Broadcasting Act 2001. A part in the Broadcasting (Funding) Act 2003 relates to the ring-fencing of 5% of the licence fee, which is administered by the BCI and can cover subtitling. It is only rational that a single Act, when the opportunity arises, should include all legislation.

On the question of funding, there are three dimensions to subtitling. These are the levels of subtitling, its standards and its promotion. This involves making people aware of the service and encouraging them to use it. These are the dimensions that have been foremost in discussions. However, if ambitious targets are to be laid down for subtitling for all four indigenous broadcasters, one must face the question of funding.

In its plans for the coming year, RTE outlines how much subtitling it is going to do and also the emphasis on peak time. Our association makes a submission before an increase in the licence fee is sought to the effect that the increase should be justified. RTE at least has access to funding to do subtitling and, to some extent, TG4. However, if TV3, the independent commercial channel, given its relatively small audience, is to reach challenging levels of subtitling, there is a requirement to examine the whole area of social responsibility and the possibility of the State subventing subtitling on TV3 to some extent. The same applies to any other small channel that sets up. We maintain that if there is a licence fee, a person who has a hearing loss is entitled, as a payer of the licence fee, to equal access to the free-to-air channels. Apart from that, under the Equal Status Act 2000, people with a sensory disability have a right to access all information or entertainment on all channels. That is our belief and our vision for subtitling.

If we are to set ambitious levels of subtitling for the four indigenous channels, the question of expertise to deliver subtitling at the required standard arises. Subtitling can be divided into two areas. The first is subtitling of news and discussion programmes such as "Prime Time" where subtitling follows speech, as is happening here today. The second is subtitling of films and soap operas such as "Coronation Street" and "Emmerdale", which can be subtitled in advance of transmission so that there should be no difficulty in achieving a high standard. When it comes to live subtitling, for example on the 6 p.m. news programme, which lasts for a full hour, the subtitling takes place as a person speaks. If we want to have good synchronisation, matching text with speech, we must have very skilled stenographers. We have been told by RTE that there is a skill shortage, that the ITFC subtitles the live news for RTE and it has experienced skill shortages. The news is being subtitled from Canberra, Australia, from last week and delivered here. That illustrates the difficulty in getting skilled personnel. If that is the case, and if the high levels set out by the Broadcasting Commission of Ireland are to be achieved within a reasonable period, the whole skill pool must be examined to see whether anything be done to train stenographers to that level of skill.

I have also been told, regarding the transmission technology, that when faults occur in the transmission of subtitles the TV channel is not aware of them until somebody from a user group reports them. There is, therefore, a need to examine the whole area of technology to ensure it does the job the user groups expect of it.

A firm in Rathnew, County Wicklow called PCR subtitles the "Late Late Show", a programme of two hours' duration. It also subtitles peak time television. The standard is excellent. There is good synchronisation of live programming. I have very few complaints about it. It demonstrates that if there is a pool of skilled people, there is the opportunity for training more people to that level.

Under the television without frontiers directive, if a TV channel such as Sky is broadcasting from outside to Ireland, it falls under the jurisdiction of the member state where its head office is located and where the schedule decisions are made. If the licence is granted outside of Ireland, the subtitling rules of the BCI do not apply. In Britain, Ofcom has its own code and rules. There are six grounds of exemption from that code of rules. Among them is the extent to which the audience lies outside the UK. If that is the case the TV channel can qualify for an exemption from Britain's rules. It can happen that if the BCI's rules do not have to be followed, Ofcom's rules do not have to be followed. I am not too clear on the position regarding the licence for Sky News Ireland. It does not subtitle at 10 p.m. or at 7 p.m., the two slots it has for Sky News Ireland.

We raised that matter with Sky today. I understand it is taking steps to address that. I thank Mr. McKenna for his presentation. I have a final question for him. Following the association's last appearance before this committee we accepted an invitation to visit RTE to inspect the subtitling work being done. Is his association happy with the level of subtitling from the public service broadcaster?

Mr. McKenna

We are happy with the level of subtitling in RTE. The overall level set down by the BCI from 1 March 2005 is approximately 55% but RTE has already reached 100% on peak time most evenings, that is between 6 p.m. and 11 p.m. With the subtitling of "Nationwide" it has reached 100%. It also subtitles more programmes in the afternoon. These are the two times when RTE has the highest audience levels and that is when one would expect it to subtitle. It also has a policy of subtitling major news items which are generally transmitted live. We are quite happy with the levels reached by RTE. I do not know whether the committee wishes me to comment on the other channels.

Mr. McKenna

The two other broadcasters covered by the Broadcasting Commission of Ireland rules are TG4 and TV3. TG4 has what is known as open subtitling — it appears on screen and is not accessed through the Teletext system. The levels are reasonable. I am sure it will meet the target set by the BCI. However, TV3 subtitles only two programmes of which I am aware, two soap operas. The level set for it by the BCI for the current year is 12%. That 12% applies only from the hours of 7 a.m. to 1 a.m. — an 18-hour period. It subtitles many of the repeats. The number of repeats probably matches the number of original regional made programmes. There is no rule set by the BCI that restricts that. In the spirit of the rule more programmes should be subtitled than the current two.

I thank Mr. McKenna. That is an important contribution.

I apologise for missing the beginning of Mr. McKenna's presentation. I welcome him to the committee. It is good to discuss the important issues he has raised. Is the technology for subtitling becoming less expensive and is it being improved? Some time ago Deputies saw a voice recognition software demonstration in which our speech was transferred onto a computer screen. The presentation was by IBM, Dragon technology or whatever. Is the technology becoming better and cheaper? In other words, should it be easier for broadcasters to meet even the minimum standards laid down in the access rules?

Mr. McKenna

There is new voice recognition technology where the computer picks up the sound. I gather the BBC uses that technology but there were difficulties with it. As regards a machine listening to a speech the variance would be accent and clarity of speech. It could produce the wrong word. The technology is improving and is the future of subtitling. As we stand the skill of stenography is the important issue with live subtitling.

My information is that the costs keep falling. I do not know the costs for any particular channel. However, I do know that in the Netherlands, the public service broadcaster estimates that access services are less than 1% of total budget. That is quite a low figure. According to the NOS, and I am also informed by the Royal National Institute for Deaf People in the UK and by some people at Ofcom, the cost of subtitling appears to be falling.

I thank Mr. McKenna for his submission. We note the difference in the legislation between our Broadcasting Act 2001 and the British Communications Act 2003 which not alone covers persons who are deaf or hard of hearing, and persons who are blind or partially sighted, but also persons with a dual sensory impairment.

Sitting suspended at 4.34 p.m. and resumed at 4.36 p.m.

I welcome Mr. William Fagan, chief legal and regulatory officer of Chorus and Mr. Mark Mohan, sales and marketing director of NTL. As we are running behind time we may not be able to devote the amount of time required today. I draw attention to the fact that members of the committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Furthermore, under the salient rulings of the Chair members 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.

Before inviting Mr. Fagan to commence, I remind him that I am only in possession of this document now despite writing three weeks ago requesting a submission through IBEC. I am at a total disadvantage. I had the opportunity to read all the other submissions last night. I invite Mr. Fagan to give the committee a summary of the contents of the document regarding the future regulation of broadcasting in Ireland. However, I will not be able to have regard to the document in detail.

Mr. Mark Mohan

I thank you, Chairman, for the invitation to come before the joint committee. On the point raised, our invitation to attend here came very late last week through IBEC. I understand that the committee had sent a letter to IBEC some weeks ago but it was very late last week when we heard about it. That is the reason our submission was late. I shall move through it quickly and hand over to my colleague, William Fagan, from Chorus.

We submitted our document in presentation format and I will move through it quickly. There is at least one relevant point on each page that I wish to make and I will keep to five minutes. Our background is that we were previously known as Cablelink and owned by RTE and Telecom Éireann. Our main business is multi-channel television. We have over 354,000 residential television customers of which 110,000, approximately one third, are digital TV customers. We are very much an Irish cable company with over 500 employees in Ireland.

As we told the committee in 2003 when last invited, we intended in 2004 to roll out a major broadband programme across our networks and set out some targets in that presentation to the committee. I am happy to say we have delivered on those targets with over 120,000 homes enabled for broadband in that time period. The roll-out programme for broadband is ongoing. We have in excess of 13,000 broadband customers at this time. Page 3 of our document sets out our network service areas but I will not dwell on it. Page 4 of our document outlines our main competition which is satellite broadcasting in the form of British Sky Broadcasting which has 355,000 residential customers in Ireland. As the committee will have heard from Sky, it is very much a UK-centric organisation. Its advertising revenues compete with indigenous Irish advertising revenue. Sky customers in Ireland pay UK VAT at 17.5% to the UK Exchequer as opposed to Irish VAT of 21% to the Irish Exchequer which our customers pay. Sky is not regulated in this marketplace.

I wish to make some relevant points regarding the multi-channel television market in general. Page 6 outlines clearly that only one third of television homes in Ireland depend on analogue terrestrial broadcasts alone and that the other two thirds depend on larger, multi-channel services, be it by cable, MMDS or satellite. Following on from that, page 7 gives a comparison with the United Kingdom market and members can see that despite the introduction of DTT or freeview, as it is commonly known in the UK, the proportion of analogue terrestrial dependence remains about the same as in Ireland. In fact, it is slightly higher. Analogue terrestrial dependence here is approximately 33%; it is 36% in the UK. That is an interesting comparison to which I draw the committee's attention.

Slide 8 lays out an analogue and digital breakdown of the multi-channel TV market and it is clear from that graph that the market is moving towards digital at a very rapid rate. The multi-channel TV market is migrating to digital TV and it is clear that the cable and MMDS digital investment in the past three and a half years has played a substantial role in driving that trend.

Slide 9 demonstrates the breakdown between cable and satellite. Cable was slower to market in this country for a number of reasons but it is clear from the slide that the cable and MMDS digital market share continues to grow at a strong rate quarter on quarter.

Slide 10 is very relevant in that it draws a European comparison across the top ten digital TV nations. Members can see that Ireland performs strongly and has the second highest market penetration in terms of digital TV. That is without DTT. Some of the other countries have DTT. The UK is the strongest. The remaining points should be clear to committee members.

I will skip through the next few slides, which deal with the product line-up NTL provides, and go straight to slide 16, which is a market summary slide. Strong competition is definitely driving digital migration in this economy. The dependence on analogue terrestrial broadcasting is in decline. Progress has been driven by the private sector and the cost to the consumer of going digital is falling rapidly, with just a €5 increment per month on top of basic pricing from 1 January this year.

Would you skip through that also to the broadcasting policy goal, which is what we are interested in?

Mr. Mohan

I will be happy to do so.

I must say to Mr. Fagan that we received his presentation in time and I had an opportunity to read it. I would not like him to get the impression that I did not do that.

Mr. Mohan

The objective of the earlier slides was to lay out the key sentiment we would put forward today, which is that a large part of broadcasting policy should be focused on the digital switchover plan and on the 33% analogue terrestrial viewers.

Slide 20 deals with the aspect in which the members are specifically interested. We wanted to refer to digital terrestrial television, the plans recently announced by the Department for the publicly-funded pilot introduction of a DTT service and the fact that expressions of interest have been sought for both multiplexing and network service elements, and for a project manager. NTL Ireland wholeheartedly supports the moves towards digital switchover and, in particular, the digital transmission of the Irish terrestrial channels — RTE One, RTE Two, TG4 and TV3.

We very much support the expansion and enhancement of Irish terrestrial services, of which we would like to see more. Successful digital transmission of Irish terrestrial channels will be very welcome. The main priority of Irish digital broadcasting policy should be encouraging the 33% of analogue terrestrial broadcast only viewers to go digital. There has not been sufficient focus on that point and it has not been drawn out to any large extent in the media over the past five or six years of debate about digital terrestrial television.

NTL is very interested to see how the DTT pilot develops. We are unsure about the requirement of three or perhaps four multiplexes. We know that one multiplex will suffice for the four Irish terrestrial channels. We are interested in hearing from the Department on the new channels that are envisaged and we are also interested to understand the pilot network overview that is set out in the documentation, which sets aside capacity for satellite channels to be received from the Astra satellite.

As regards the sites for the DTT pilot, we would question why transmission will be from Three Rock and Clermont Carn. The DTT pilot should focus on the 33% of analogue terrestrial broadcast viewers who have not yet gone digital because we do not believe that transmission from Three Rock and Clermont Carn will catch a substantial number of those viewers. What will happen is that the DTT trial will take place principally in areas already served by two digital platforms. That is a key point about which we have questions. Overall, we would be very interested to see the impact of the DTT pilot on the multi-channel television market.

Moving on to slide 22, we believe there is a role for more Irish channels, be it terrestrial or otherwise, and we support that in every way possible. Independent indigenous commercial programmers are leading the way in that regard. The committee has heard today from Setanta Sports and City Channel, and Channel 6 is on route to market as we speak. We believe that is good for the market and we welcome it.

Overall broadcasting policy on DTT must become clearer. The platform should have the objective of expanding and enhancing the range of Irish terrestrial services. A key specific objective must be drawn out in regard to Irish digital broadcasting policy in terms of those 33% of analogue terrestrial broadcast only viewers.

The final point concerns must-carry obligations. The Broadcasting Act deals with must-carry obligations in respect of the Irish terrestrial channels, and we are happy with those obligations. The terrestrial channels are very welcome on the platform and are a key component of the platform. We are extremely supportive of Irish channels in general. However, Article 31 of European Directive 2002/22 states that must-carry obligations should only be imposed where they are necessary to meet the clearly defined general interest objectives and shall be proportionate and transparent. We would like that requirement to be implemented in Irish broadcasting legislation.

Thank you, Mr. Mohan. Mr. Fagan, your competitor has stolen some of your time, so to speak. I know you will be brief, as you always are when you appear before this committee. We thank you for your presentation in advance.

Mr. William Fagan

Thank you, Chairman. That is a good introduction. I thank the committee for the opportunity of making a presentation on these issues. Mr. Mohan set out where we stand in terms of our industry and the development of digital broadcasting. Currently, one third of our customer base would be digital — 65,000 out of approximately 200,000 customers. We expect that to increase to close to 100% in the next four to five years and we hope to be close to 40% by the end of this year. With our organisation, NTL and Sky, 37% of the Irish market currently is digital, which is fairly high by European standards, without the introduction of digital terrestrial television. My first point will relate to that issue.

Some witnesses earlier appeared to express concern about the allocation of the digital terrestrial licence. In fact, it is a series of licences, starting with a trial for a transmission and multiplex service provider. A transmission or distribution company might also be involved. We welcome the Minister's announcement of the trial and wish it every success. Anything that increases the level of digital coverage in this country is good for our business and we believe we can play a role in providing a ubiquitous digital service. Given the level to which digital television is already available in Ireland, we may have to consider creative solutions to providing ubiquitous free-to-air digital television here. I am not sure if the model which has worked elsewhere will necessarily succeed here. Initially, in the United Kingdom, digital terrestrial television failed and then the freeview model was introduced. Unfortunately, the freeview model which operated in the UK cannot be introduced here for copyright reasons. We know this from our own negotiations with the BBC and UTV. We know that the Irish public demands the right to watch UK television even though we do not pay the UK licence fee. There is a major demand for such stations. It is the core raison d’être for our business. Therefore, if our DTT is to succeed, it will have to have that element. I do not see how it can compete in such a vigorous marketplace without that element.

This leads me to my first point, namely, the model for licensing which allows the Minister to designate two companies — a transmission company and a multiplex company. That was introduced in 2001 and since then we have had the Communications Regulation Act 2002, which prohibits the Minister from giving directions to ComReg in regard to licensees, licences and the award of spectrum. Since those two legislative measures appear to conflict with one another, there is a need for clarity in that regard.

There was a further development since 2001, namely, European Directive 2002/20, which provides for a framework for the award of spectrum on the basis of criteria which are objective, transparent, non-discriminatory and proportionate. I admit it provides for a type of carve-up for public interest type objectives, but the DTT licensing provisions in the 2001 Act may not be fully in accord with the existing regulatory framework. We tried to be helpful on this matter and not to cause any kind of obstruction but we consider it needs to be revisited. I went into this issue at some length in my paper, the detail of which I hope was not too tedious. I would be happy to talk to whoever will draft the committee's report about what the precise points mean, although I believe I have made it reasonably clear.

Mr. Mohan made a point in regard to the must-carry provision. I heard the other day that the European Commission is considering enforcement proceedings against member states which have not carried through this general interest provision. This can be a hot topic. In the context of the must-carry provision, we have to carry RTE, TG4 and TV3 on our cable systems and we have to carry TV3 on our MMDS systems. They are our current "must-carries". We are proud and happy to carry those channels because they are the ones most viewed by our customers. However, with the development of digital television and more channels coming on line, there must be clearly defined rules as to what can and cannot be a must carry. The nub of this is covered in Article 31 of European Directive 2002/22. Under the terms of that directive there is a basis on which that can be determined.

I can foresee a situation down the line where many channels might seek must-carry status. As matters stand, if the BCI so designates, community channels can become must-carries on our networks. We have already discussed with the BCI the difficulties that will be caused if one had 30 community channels from different parts of Ireland. Spectrum and space are scarce on our networks. It might involve some kind of decision process, for example, a sharing among the community or there might be a single community must-carry channel for the whole of the country and then every locality would have its own space on that channel. There are ways around this. However, we need to get to the nub of the issue, namely, the must-carry obligations which we carry at our own expense. We do not charge for that service. There is provision in the directive for appropriate remuneration for those companies that have to carry must-carry channels. We are not seeking that today; what we are seeking is that there would be a genuine general interest criterion in place.

The final issue on which I want to touch is rather controversial. Currently, the Broadcasting Commission of Ireland has a policy document on ownership and control policy. We will make our own submission in that regard. This has been a vexed issue over the years and, to be blunt about it, there probably are too many legislative measures addressing the same issue. They include the Radio and Television Act 1988, the Broadcasting Act 2001, the Competition Act, which includes media ownership provisions, the Television Without Frontiers directive and I could go on. We consider that it is a legitimate public interest objective to consider issues such as plurality of media ownership. In other words, we are not saying that is not a relevant issue. We view media and content issues as being somewhat separate from transmission issues even though the United Kingdom has followed the model of having a single regulator, namely, Ofcom.

Parallel to that, there is the question of economic regulation of the sector as against what I call media regulation, which is considering extra-curricular criteria in regard to competition law. It does not apply solely to economic concentration, that is, to market power; but rather to the question of whether one person controls all the news in the country. There is a model in the European directives and we checked the European regulatory framework which basically excludes broadcast content. However, it is without prejudice to measures taken at Community or national level in respect to such services in order to promote cultural and linguistic diversity. In other words, in excluding broadcast content, it does not exclude the possibility that one can have regulation in this regard. It is done by a simple device of defining electronic communications services. It excludes services providing or exercising editorial control over content transmitted using electronic communications networks and services. I do not have the time today to go into all the ins and outs of this issue.

I have stated a basic possibility in the paper I submitted. In the context of the next legislative measure on this area, the Legislature would do a good day's work if it could separate these issues and help bodies such as the BCI, the Competition Authority or the various other regulatory authorities involved in this area to be able to make clear decisions. For example, in the context of considering the issue of the new owners of a local radio station on the basis of economic market concentration power or on the basis that they do not want the same body broadcasting all the news. Those are the three points I wished to make.

I thank Mr. Fagan for his presentation and for his patience in waiting to contribute.

I congratulate the speakers on their submissions. A number of points occur to me which I am sure will also occur to the consumer. With the increased emphasis on competition and deregulation and the increased appearance of regulators on this and every other scene, there is a tendency for the consumer to be incidental to the process. While I agree that competition is beneficial and that the more players there are in the marketplace the more choice their is for the consumer, I would like Mr. Fagan to address the issue of the degree to which the consumer can expect a quality service having regard to all that he envisages unfolding in terms of digital TV and the benefit it will have for the consumer.

The representatives of NTL mentioned broadband. Our roll out of broadband compared with that in other countries is appalling.

The Deputy should stick to the issue under discussion.

That element was mentioned in the submission.

The Deputy is aware of the issue we are discussing. We are all getting tired.

Fair enough.

We will be examining the issue of broadband next week.

No, it is referred to in the submission. There is no point in avoiding issues. Many of the representatives' ambitions are dependent on the high availability of broadband. If it is not available, there is the question of the degree to which the representatives can provide the services that are within their reach to provide, as such provision will be affected by lack of adequate broadband.

I have come to my last question. I note the Chairman is sensitive, he must have been looking at too much television last night. I wonder about the degree to which the customer will have to face changing technology in replacing aerials with satellite dishes. To what extent has that been worked out and who will bear the cost? One of my colleagues already referred to that issue.

Mr. Fagan

As regards the broadband issue, we would like to make a submission, but it is a different subject for a different day.

We have appointed a consultant to advise us.

Mr. Fagan

He has been in touch with us.

The Sub-Committee on Information Communication Technology will be reactivated next Wednesday and it will consider the 12 recommendations which were made to see what progress has been achieved.

Mr. Fagan

I will ask my colleague to answer the questions about the cost of satellite dishes. As regards consumers and the level of service, with which I dealt a lot in a former life, we were bad in the past. It is time for the sackcloth and ashes. However, we have improved considerably because of competition. In 2001 we had 250,000 customers. We probably lost 100,000 of those to BSkyB because it has an airless model which does not rely on cables and is not affected by trees, which block signals. We got back 50,000 of those customers as a result of competition. We now have 200,000 customers, but we know we have the scars. We had to improve the level of our service. The former director of telecommunications regulation, Etain Doyle, said she got more complaints about the two cable companies, particularly our company, than she did about the incumbent telecommunications company, Eircom. That is no longer the case, although we are under a lighter regulatory regime. The European Union regime since 2003 is based on competition because it is good for consumers. We comply with consumer laws.

Investment will improve the level of service. There are plans, which we are not at liberty to discuss here today. We have been acquired by a new shareholder. It has big plans to invest a lot of money in our company. Not only will there be competition for Sky, but also for Eircom and it will be good for consumers. Those plans are in place. There are certain contingencies and things going on at present with the Competition Authority which are matters for it. However, substantial investment is on the way. One will then see the benefits of competition and investment for consumers.

Mr. Mohan

I will briefly address the three points made by the Deputy. As regards competition, deregulation and how the consumer is served, the consumer is being served exceptionally well today. The investments which have been made in the cable and MMDS infrastructures in the past three years bear out that. We now have 110,000 digital television customers. It is only three short years since we started rolling out digital television. They are migrating in their droves and it is an inexpensive activity to move to digital television.

As regards the degree to which replacing aerials with dishes is required, people do not need satellite dishes. We urge them to keep away from them, particularly if they are within our network service areas. It is easy for people to go digital. They only need to telephone us and there will be a small incremental surcharge to get digital television from NTL Ireland. If we had more time, I would be happy to lay out the specific costs. They are outlined in summary format in the submission. There is no requirement in terms of satellite dishes associated with our service.

As regards providing broadband, Ireland is behind the game, but it is moving quickly now. The competition that cable is bringing to the DSL option is playing a large part in driving that. We made that point to the committee in 2003 and we made a commitment then when we said we hoped we could broadband enable approximately 100,000 homes across 2004. That is network activity on an existing live network to change it from a one way broadcast network to a two way broadband network. We delivered on that commitment. That activity will continue until we complete the full network upgrade and provide more broadband.

I thank Mr. Mohan and Mr. Fagan for their presentations.

Consumers are concerned about the continuity of service, notwithstanding the greater availability of choice. Is it possible to guarantee continuity of service in so far as such guarantees are applicable?

Mr. Fagan

Is the Deputy referring to outages, etc.?

Mr. Fagan

Yes, if investment in the network is available. The Deputy is talking about our company and NTL to a certain extent. Much of the network is old. Ireland was an early entrant into the cable system because of the demand I mentioned earlier to see the UK multi-channel programmes. We remember the people campaigning in Cork to get BBC. Much of that network has reached the end of its useful life and it needs further investment. That investment must be encouraged.

I wish to advise Mr. Fagan and Mr. Mohan that the committee has not received any recent complaints about either of their organisations. I thank them for appearing before the committee. They raised a number of points about legislation. I do not have any doubt the Department officials who are attending here today will refer those to the Minister and his staff.

I welcome Mr. James Morris, chairman of TV3, and Mr. David McMunn, director of government regulatory and legal affairs, to the committee. As we are behind time, we are trying to keep to a five minute presentation followed by questions from the members present. A number of members are attending other committee meetings. The important part of today's presentation is to get submissions and to give people an opportunity to air their views on regulatory matters and the way forward.

I draw everyone's attention to the fact that members of this committee have absolute privilege. However, the same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Under the salient rulings of the Chair, members 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 thank Mr. Morris for his presentation which he has submitted to us. We have had the opportunity to read it. Perhaps he could give us a summary of the points he made.

Mr. James Morris

I will outline the main points we included in our proposal. It is important for all the stakeholders, including RTE and TV3, that this process is carried out in an open and transparent manner so that we understand the thinking behind the legislation. What is happening here today is a good example of the consultation process, although it is the exception rather than the rule in terms of how we feel the legislation will progress.

The broadcasting regime has not created a flourishing broadcast industry. We have had a substantial licence fee increase; it has doubled since 1998. Nevertheless the audience share throughout the RTE stations has reduced from 45% to 39%. Our basic argument is that we would like legislation promoting a balanced indigenous sector with thriving public service broadcasting and viable independent broadcasting.

Approximately three quarters of channels directly targeting Irish audiences are UK-based. Some 11 of the 16 channels that are specifically broadcasting into the Irish market have chosen UK regulation and bypass our own regulatory system and this committee. This is taking place because there is a simpler and more flexible system of regulation in the UK which regulates for choice as well as solely public service broadcasting. In regard to our competition with RTE, there must be some kind of mechanism for regulating competition issues which a single regulator would provide but which we have not had up to now. We favour strongly a single regulator.

Our main point is the need for a strong independent market regulator which would be able to hold all broadcasters to account. In regard to RTE, it would also expect a properly defined public service mandate so that this could be identified in respect of receipt of the licence fee. This would produce a balanced broadcasting policy and reduce the impact of UK intruder channels that are coming into the Irish market but giving back nothing. It would promote more Irish-based channels that would choose to apply for licences and add to the total number of TV channels available to Irish audiences.

Has Mr. Morris views on who should be the regulator? Should it be an independent body or should the Broadcasting Commission of Ireland play a role in this regard?

Mr. Morris

The principle should be a single regulator for all TV and radio channels. There is tremendous convergence in media and technology and there should also be convergence in regulation. The BCI, which already exists, would be able to do the job. The real issue is the terms of reference for the regulator so that there is a clear set of guidelines for public service broadcasting channels. The same should apply to independent channels. One mindset should apply all the rules across the board. I would favour a single regulator. The BCI is in existence and has the experience of regulating the independent sector. There are issues in terms of adapting to a different set of criteria that would be applied to some aspects of RTE's broadcasting.

A number of issues were raised in regard to the delegation's commercial station. In his presentation, Mr. Pat McKenna was less than happy with its record on subtitling. The Screen Producers of Ireland spoke about the lack of home-produced programming by the station and the absence of work for companies such as his. I recall when the witnesses appeared before this committee some time ago, they were committed to increasing the level of home-produced programming. Perhaps they would advise the committee if this is the case.

Mr. Morris

The total amount of home-produced programming we broadcast on a daily basis is 27%. That compares favourably with RTE Two at 30%. RTE Two receives €35 million from the licence fee towards that 30% which is not the case in respect of our station. We believe that we are performing pretty well on that front. We are meeting all our obligations under the regulations to which we signed up and we are in excess in some cases. We have a programme to increase subtitling.

Mr. David McMunn

There was a consultation process which ended towards the end of 2004. We have been set a ten-year target, as has RTE and TG4. We are poised to meet our first year target, which we intend to exceed. We intend to exceed the targets each year for subtitled programming.

I want to inquire about the development of independent television in this country. Have comparisons been made with the development of television in the UK? How do the witnesses see independent television developing here based on that experience?

Mr. Morris

The fundamental difference is that the UK has a public service broadcaster which is funded only by the licence fee. The duopoly there has worked extremely well in terms of giving what was ITV, but now a range of other channels, exclusive access to advertising. This is not the model we have, and it is an exception in Europe. What we have here is more common in countries like France, Denmark, Germany, Holland, Italy, Spain etc. We are more like the European model. It is important to remember that RTE, as the public service broadcaster vis-a-vis the licence fee, is the largest advertising channel in the country. It dominates the television advertising market. The combined effect puts it in a dominant position. Given that it is a regulated and not a free market, regulations should acknowledge the status quo and ensure there is market design so that independent channels can find a space to develop more channels at home.

Mr. Morris referred to Sky in his presentation. He said it is taking €200 million from Irish consumers and that it has 355,000 customers. During the break, I calculated that it is getting probably in the order of €217 million from subscribers at an average of €50 a month. The company is not regulated, even though it claimed in the Amsterdam treaty report to be regulated by the UK regulator. Is this something about which Mr. Morris is concerned?

Mr. Morris

It does concern us. When Ireland had the EU Presidency, one of the campaigns the Minister, Deputy Dermot Ahern, pursued was that channels which are created for one country, but broadcast out of another, should be regulated by the country that receives the channel, not the country that sends the channel. If one has Sky News Ireland, the channel which is designed exclusively for the Irish market, it would make sense to have it designed and regulated by the market in which it operates rather than the country from where it happens to send the signal. Some 13 countries in Europe, mostly the smaller countries, have signed up to support that principle.

The impression we are getting today is that the debate should begin at EU and ministerial level.

Mr. Morris

It is a good principle. We agree with RTE and TG4 on that point.

Mr. McMunn

The Liverpool conference will take place in September during the UK Presidency. One of the issues raised will be the country of origin and the country of reception rule. The larger nations do not have a view on the matter because they are not affected. The 13 smaller member states have made a concerted effort to put the issue on the agenda. Apparently the European Commission will examine ways of addressing the issue. Understandably, it is in favour of a single market in Europe because this is part of the European process. It also accepts that each sovereign nation state is entitled to have certain standards relating to programming and advertising. This will be a live issue in the next six months.

The committee has heard submissions from the NUJ and the RTE group of unions on the format for the new regulator and regulations. Their view is similar to that of TV3 that there should be an independent body. Their view is that the body should act as a content regulator with two divisions, one responsible for public service broadcasting and the other responsible for commercial broadcasting, and that there should be a separate licensing body for radio and television operators. They made the point that difficulties could arise on regulatory matters which could be a source of conflict with the licensing arrangements when a reapplication is made for a commercial licence. What structure is envisaged by TV3?

Mr. Morris

It is vital that the regulator is a content regulator but also a competition regulator. Any equivalent network such as the ESB or Bord Gáis has a regulator, for example, ComReg for telecommunications, which has been set up to ensure fair play between new entrants and the existing dominant player in the market. A regulator which is forced to operate in separate boxes will result in the reverse of what is happening globally which is a convergence of different media and distribution channels. A single regulator should combine the regulation of both content and competition. It means if TV3, RTE or TG4 have an issue, we can all go to the same office. This is a principle of natural justice whereby a ruling on who is right or wrong can be given based on the legislation. At present there are two or possibly three separate jurisdictions which have no contact with each other and therefore different standards of decision and justice are used.

Did Mr. Morris refer to ComReg?

Mr. Morris

I used it as an example of a regulatory system where a licensing authority also addresses competition and consumer issues.

Does Mr. Morris regard Ofcom in the UK as being a role model for the regulation of broadcasting as well as telecommunications?

Mr. Morris

That might be too much too soon. A single broadcasting regulator would deal with all broadcasters using the same legislation. A content and competition regulator for broadcasters would be the first objective. To have that based on the Ofcom model might be too much in one go.

The point was made by the BCI that in the UK there has been a diversification into different groups. I am interested to hear the views of TV3 on this matter.

Mr. Morris

On the regulatory body.

Mr. Morris

Our priority is to have a single broadcasting regulator with a remit for both content regulation and competition issues to create an environment to encourage new channels.

Would that regulator also have responsibility for licensing?

Mr. Morris

Yes.

Is it the view of the delegation that the digital terrestrial network should be operated by an individual network company as opposed to one service provider attached to the public service broadcaster or others?

Mr. Morris

The network should be separate from the users of the network, in other words, the airlines should be separate from the airport and the runways and they should be kept under separate ownership.

In the same way as the national grid has been separated from the ESB.

Mr. Morris

Yes. There should be a network operator.

I thank Mr. Morris and Mr. McMunn for their attendance and for sharing their presentation with the members. It is a detailed presentation which the committee will consider. I hope the exchange of views has been helpful to all and to the framers of policy in the Department of Communications, Marine and Natural Resources.

Mr. McMunn

I wish to make two final points. Regarding the separation of the network from broadcasters, Ireland is the only one of the original 15 EU member states with a vertically integrated broadcaster, that is, the broadcaster also controls the transmission network. The second point is about the regulator. The RTE group of unions and the NUJ both said there should be two separate divisions. I refer to ComReg and the UK experience. The single regulator is not divided but there are slightly different rules for the dominant player. For instance, RTE would be subject to somewhat different and more onerous rules because it is in receipt of the licence fee. A single regulator is a well accepted and well tried formula.

The other groups would have a different view. I thank Mr. Morris and Mr. McMunn.

It is now late in the evening and I am holding the fort for the members who are engaged in other activities. I ask someone to inform the Taoiseach that I have been here all day since 10 a.m.

I commend the Chairman on his diligence. He will be aware that the communications portfolio has received significant news today about An Post, ESB and about a new whitefish and shellfish decommissioning programme. I am not sure if the publication of this news was timed to coincide with the meeting of this committee. It is certainly fortuitous that so much seems to be happening today. I commend the Chairman.

I ask Mr. Pól Ó Gallchóir to introduce the members of his delegation.

Mr. Pól Ó Gallchóir

Gabhaim buíochas as cuireadh a thabhairt dúinn chuig an comhchoiste Oireachtais inniu agus caipéis a chur ina láthair. I mo chuideachta tá Pádhraic Ó Ciardha, leas-cheannasaí TG4, Alan Esslemont, stiúrthóir na teilifíse TG4, Pádraig Ó Domhnaill, commercial director TG4, Mary Uí Chaidhain, finance manager TG4, agus Teresa Kenny, dlíodóir-solicitor TG4.

Bunaíodh TG4 naoi mbliaina ó shin agus déanadh obair mhór in ullmhú agus i seoladh na seirbhíse agus tá obair iontach déanta le naoi mbliana ag cothú na seirbhíse agus ag déanamh dul chun cinn.

We thank the committee for the invitation to make a written submission and to address it on the issues to be considered in the context of proposed new legislation on broadcasting. Our submission gives an update on the current operation in TG4, the issues that most concern us in the context of new legislation and an outline of conclusions.

TG4 is a publisher-broadcaster which commissions most of its productions from the independent sector. It employs approximately 70 people, most of whom work in the ceannáras in Baile na hAbhann in the Connemara Gaeltacht. It creates the equivalent of 340 full-time positions in the independent sector in all the counties of Ireland.

As outlined in the submission the main issue is to conclude the process to establish TG4 as an independent entity. Consultants were appointed a few weeks ago. They hope to conclude their study by late September. The second issue is to establish a legal mechanism or formula to fund TG4 on an ongoing basis, and the third issue is to commission cost-effective programming and to develop the independent sector.

We have a very cost-effective model of multi-skilling within TG4. This model has worked well and we would like to continue with it. The independent sector is under a great deal of pressure and TG4 requires additional funds to channel to the independent sector to produce more programming.

The fourth issue is that it is a priority to establish an indigenous, free-to-air digital platform in Ireland. The fifth is that TG4 wishes to continue its role as a public service broadcaster, primarily producing Irish language programming. The sixth is that TG4 has a specific role in Northern Ireland under the Good Friday Agreement, which involves a three pronged approach incorporating availability throughout Northern Ireland, the production of programming about the people and cultures of Northern Ireland and the development of the independent sector in Northern Ireland.

I welcome the delegation. I congratulate the delegation on the success of the organisation's output over many years, particularly in the areas of music and sport. Irrespective of whether one's Irish is up to scratch, people have a deep affection for TG4 and its role in providing a background in Irish culture that is impossible to replicate in any other national medium. The initiative by my great party colleague, Deputy Michael D. Higgins, in support of the TG4 project has borne fruit. The Labour Party has considered the possibility of having a full-scale Dáil debate on the future of the channel because we have been told year after year that legislation will be forthcoming. Given the specific and important cultural role of TG4, is special legislation required to guarantee its independence and financial security?

The presentation emphasises the amount of revenue being taken out of Ireland by a number of broadcasters and the loss incurred by the Exchequer as a result in terms of the ability to provide resources for stations such as TG4. Should this be addressed in broadcasting legislation? Every time I meet screen producers from the independent sector, they lavish praise on TG4. The 350 direct and indirect jobs provided by the channel are an important asset.

To some extent, TG4's competitor in Irish language television broadcasting is the national broadcaster, RTE. Should this continue and develop in future? Competition is good at every level and we in politics are used to a high level of it. Does TG4 welcome the Irish language broadcasting output of RTE? Should RTE continue to perform such a role and, if so, should its role be strengthened?

TG4 has shown an interest in broadcasting the proceedings of Parliament. I commend the hard work of the Chairman and clerks in organising this meeting on a day when Deputies were required to attend various meetings. It is excellent that most of the main actors in the broadcasting sector are participating in this interesting public debate. The large number of people who continually e-mail Deputies about broadcasting issues could have followed the meeting on television. Does TG4 still have an interest in broadcasting parliamentary proceedings? Should this issue be considered as part of the drafting of new broadcasting legislation?

Mr. Ó Gallchóir

Competition between broadcasters is healthy and there is a market. One can argue that all five Irish broadcasters compete against each other. TG4 has developed a cost-effective model which allows us to compete and try to gain audience share. We have a particular niche and remit to which we adhere in as far as possible. TG4 is a mainstream channel for a niche audience and intends to continue in this role.

Legislation is already provided. The Broadcasting Act 2001 allows for the establishment of TG4 as an independent entity and provides that the Minister may appoint an establishment date. We welcome this provision and hope it will be acted on before the channel's tenth birthday.

Resources are a difficulty. Between 2001 and 2005, if one takes the consumer price index into consideration, the grant-in-aid for TG4 fell by 11%. The organisation's revenue lags behind and its purchasing power is quite low. This hurts us a great deal and the independent sector suffers if we cannot channel funds to it from the grant-in-aid. We have done considerable work, as has the Government through various initiatives, in building a strong independent sector in the Irish language and this must continue. We work with Screen Producers Ireland which last year produced a very good report on TG4 and the independent sector, mainly in the Gaeltacht areas, in which the need for increased investment and resources in TG4 was recognised.

On the question of televising Dáil or Committee of Public Accounts hearings, TG4 has led in this field and would like to extend its coverage of Dáil Éireann and its committees.

What size of audience watched TG4's broadcasts of the Wimbledontennis tournament?

Mr. Ó Gallchóir

One of the good things about the tennis coverage was it enabled us to reach an audience which would not usually tune into TG4. Up to 300,000 people, mainly new audiences, tuned in for the Wimbledon finals.

The various trade unions oppose the separation of TG4 from RTE. Mr. Ó Gallchóir stated that TG4 employs 70 staff. Given the desire of the company to separate from RTE, is it safe to assume that most staff would also be happy with such an arrangement?

Mr. Ó Gallchóir

Yes, under the 1996 model the company was to be independent and, as such, TG4 operates autonomously from RTE. Staff are fully behind the move towards independence which we hope will conclude in the near future.

Are costs shared centrally between TG4 and RTE, for example, in the areas of invoicing and management resources, or is TG4 completely independent?

Mr. Ó Gallchóir

TG4 is autonomous. We acquire all our own programmes and in terms of audience research, we sit independently on the Nielsen body. We have our own management, administrative and financial structures.

TG4 receives no support services from RTE in terms of administration or other assistance.

Mr. Ó Gallchóir

We receive no direct support, although we co-operate and work together. The main area on which we rely on RTE is the transmission broadcast system which is operated by RTENL, an RTE subsidiary. We deal with that company as other broadcasters do.

The National Union of Journalists and other trade unions in RTE should have no fear about the survival of TG4 if they become separate organisations.

Mr. Ó Gallchóir

Survival depends on adequate funding for the organisation.

TG4 receives a certain amount of hours of programming from RTE. Is that not the case?

Mr. Ó Gallchóir

Yes, we receive 365 hours of programming, 182 hours of news and a further 182 hours of various genres from RTE every year.

Will that continue when the two companies are separated?

Mr. Ó Gallchóir

We hope that will continue because it is important to us. We are delighted with the quality of programming we get from RTE.

Subtitling arose today. Is TG4's subtitling in Irish and English?

Mr. Alan Esslemont

The core reason for subtitling is translation. From the beginning we have had on-screen subtitles appearing in white. They are done using a different code from teletext subtitling. We are in discussions on bringing that forward but, given our restricted resources, our first priority is to create a translation for viewers who do not have Irish. We must do more than we are doing at present but we are limited when it comes to live subtitling.

Different views have been expressed today about the roll-out of the digital network. Should that be managed by a separate company or should it stay within the remit of the public service broadcaster?

Mr. Pádhraic Ó Ciardha

To paraphrase Deputy Durkan, the service consumer is the important person in this but many of the business plans for satellite and terrestrial concentrate on high population areas. Not everyone lives within reach of a double decker bus and has access to infrastructure. The TG4 television signal is carried to homes around the west coast and inland areas by small, sometimes community-based, transmission services. Our concern is that in this brave new world those small communities would have the same universal access as citizens to the public service broadcasting services they currently enjoy.

The experience is the same in Scotland and Wales. Some of the outlying areas do not appear on anyone's map because they are not commercial propositions. Irrespective of who runs it or owns it, the taxpayer is entitled to a service and that is the view of all the main public service broadcasters.

How is TG4 regulated?

Mr. Ó Gallchóir

We have our own board, bord seirbhísí, comprised of six members chaired by Dr. Peter Bacon, under the RTE Authority.

Does the station have an opinion about being under the new authority? The NUJ and others called for an independent body as a content regulator with two divisions, one for public service broadcasting and one for commercial broadcasting with a separate body for licensing for radio and television.

Mr. Ó Gallchóir

We would like to wait and see the proposals. The British model, Ofcom, works reasonably well regulating both content and regulation. Two bodies for regulation and content should be considered as well.

Would that be along the lines of the British model?

Mr. Ó Gallchóir

The British model works reasonably well in Britain but the second model would work and should be considered with a commission for regulation and a body for content and perhaps competition.

Should there be special arrangements for a minority station such as TG4?

Mr. Ó Ciardha

Under the existing legislation, TG4 has been set up as an independent body with its own authority. In the changes proposed, it would be easy to fit in. TG4 has unique status in an all-island context because, in the Good Friday Agreement, we are specifically mentioned in terms of extending our signal and, with the creation of an Irish language broadcasting fund, for the first time there is British funding for Irish language content. It is interesting that in the changes in Britain, Ofcom has taken an interest in minority and Celtic language broadcasting, specifically Irish language broadcasting, in a way that previous British regulatory regimes did not. We are heartened by that.

Is there an equivalent of TG4 in Scotland and Wales?

Mr. Ó Ciardha

TG4 was based in the 1990s on the S4C model in Wales. Independence has been proposed for TG4 and that has been the case in Wales since 1982. The move to independence for TG4 would complete the picture.

What about Scotland, where the language is essentially the same?

Mr. Ó Ciardha

There are many similarities between the two languages. There is no dedicated Gàidhlig television service yet but there is a vibrant debate towards that end. In all Ofcom policy statements, that is envisaged and would fit in neatly with its regulatory landscape.

The BCI has made a case that it should be the regulator. Does TG4 have any difficulty with such an organisation being responsible for regulation in the future?

Mr. Ó Gallchóir

There should be regulation and we should all have an agreed transparent mandate with fair competition. We should also have adequate funding. We were given a public service remit and we are willing to undertake it but we must also be given the resources to carry it out.

I thank the delegation from TG4 for appearing and apologise for the delay in receiving the presentation. We wish TG4 every success on the road to independence. The committee would like to visit the facility in the near future.

Mr. Ó Gallchóir

The committee is most welcome to visit TG4 in Baile na hAbhann.

I welcome the delegation from RTE — Mr. Cathal Goan, director general of RTE, Mr. Tom Quinn, secretary to the authority, Ms Patricia Galvin, head or regulation and Ms Bride Rosney, director of communications. This is the last session of the day.

I draw everyone's attention to the fact that members of the committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Under the salient rulings of the Chair, members 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 thank Mr. Goan for the information he submitted previously and the additional information we received today. I hope he has had an opportunity to listen to all of the presentations made here since early morning. Perhaps he could state his vision of regulation and what he thinks of the broadcasting authority Bill to be published in the new year.

Mr. Cathal Goan

Táimid buíoch as an deis a bheith anseo inniu i gcuideachta an choiste agus é i mbun machnamh ar Bhille atá fíor-thábhachtach, ní amháin ó thaobh RTE de ach ó thaobh an seirbhís chaolacháin poiblí agus gach gné den chraoladh atá le teacht in Éirinn sna blianta atá romhainn.

I thank the Chairman for the opportunity to come before the committee today. We had the opportunity of addressing it recently about RTE's annual report for 2004 and welcome this opportunity to discuss the proposed broadcasting legislation with it. I express the regrets of the new Chairman of the RTE Authority, Mr. Fintan Drury, who is on holidays at present but would have wished to be here with us.

The committee is aware of the dynamic nature of the broadcasting landscape which is rapidly changing from the competitive, regulatory and technological points of view. RTE has made a short submission to the committee setting out in brief what it believes to be the key points for the proposed legislation.

We have supplied supplementary information today which is a review of public service broadcasting in Ireland since the deliberations of the forum on public broadcasting in 2002. It is a useful starting point for consideration of the philosophy that supports and underpins the general approach to public service broadcasting in Ireland. Those deliberations led to a very welcome increase in the licence fee at the end of 2002.

Rather than go through that we would welcome questions. I would, however, like initially to clarify several points that arose during the day. I had the opportunity to eavesdrop on some of the hearing and my colleagues kept me in touch with it.

We thought RTE would be broadcasting this all day.

It will broadcast it tomorrow night.

Mr. Goan

There appears to be a misapprehension that the European Union requires independent regulation to be a single regulator. The emphasis is on independence of government and broadcaster rather than specifying the number of regulators. There is no specification for one single regulator.

I understand that the Broadcasting Commission of Ireland, BCI, referred to not being aware of any service regulated by it which does not achieve the 20% news and current affairs obligation. For the sake of clarity, on page 9 of the submission we made this morning we referred to the number of services which have sought derogation from that rule. Our information is based on the BCI's website.

Is Mr. Goan saying that what the BCI told us today is not true and several stations have not fulfilled the 20% rule? I recall at least one station which was to be modelled originally on RTE One but which has become more of a music station.

Mr. Goan

No. Page 9 of the documentation we presented to the committee this morning contains a reference to several services which have sought and received derogations from that rule. The information comes from the BCI website. I am not making any comment about anything else. That is a clarification.

It appears that what we were told earlier today was disingenuous at least. We should ask BCI to come back here and explain that. It said nothing about derogations or anything else of that nature. There were reports in the media about stations that sought derogations but we seem to have been told that BCI was not aware of any station not complying with the 20% rule.

Ms Bride Rosney

If the Deputy has a chance to look at the consultation document on news and current affairs available on the BCI website he will see the list of derogations in numerical terms not by names of stations. A total of 65% of the commercial independent stations have received a derogation for news and current affairs. That is the information we have used.

We cannot comment on how that information varies with what was said here today. We are merely citing the source of our information which was on the website as late as last Thursday and Friday. I am sure it is still there.

Deputy Broughan specifically asked that question today. We will review the transcript and ask for clarification from the BCI in that matter. I did not have an opportunity to look at this document because we received it only today. I read the other documents last night. That is one reason why we could not pursue that with the BCI. To be fair we will put the question to it and seek clarification on that issue.

Mr. Goan

We have made several short points in keeping with what I understood to be the Chairman's requirement that we make some general observations about key elements to be considered in the forthcoming broadcasting Bill. Rather than read our presentation we would welcome questions from the committee.

A major point emerges from RTE's presentation about which the Chairman asked TG4 and others today, namely, RTE's preference for dual regulation. For example, does it want to a regulator akin to Ofcom in Britain, although there the authority continues to exist in regard to the British national broadcaster? Does RTE want to have a content regulator for itself alone or for every broadcaster and a regulator on all other matters such as licensing and spectrum?

This committee represents a Department which in reality combines three Departments, making it a very important enabling Department for communications, energy and marine. In most countries these would be three separate Departments. We have had a busy day in respect of the Department.

Some would argue that it might be time to have a single regulator in the transport and energy sector. For example, in the future if there were to be a communications, broadcasting and culture Department there might be a single regulator for those areas. Does Mr. Goan continue to hold the views he articulated at his last appearance before the committee?

Mr. Goan

Since publication of the Labour Party's Green Paper on broadcasting in the 1990s, which presaged a unitary regulatory framework with a super authority, RTE has consistently said that it recognises the need for a unitary regulatory authority. In our presentation to the committee and on other occasions we have said that we question the seamless migration of the BCI to that authority because some of its requirements in the past have been at odds with what we believe to be the appropriate regulation for RTE.

I would like to tease out the various constituent aspects of regulation. I am not making a black and white statement. There are difficulties involved and issues specific to the Irish context. The Deputy has already pointed out the number of Departments involved. The Departments involved in the UK have quite different remits too. It is clear that simply borrowing a UK model for Ireland would not be appropriate, since even regarding the scale it would not be an obvious runner.

There are seven different aspects to regulation. Content regulation is setting and assessing programme codes and standards, including content complaints. Content funding includes the broadcast fund that has been brought forward in legislation. There are content licensing, commercial terrestrial television and radio channels, cable and satellite content contracts, EPGs and so on. There are the evaluation and assessment of licensing, including market analysis, licence reviews and competition considerations. There are infrastructural regulation and telco and service provision. There are spectrum management, broadcast planning and so on, and there are the oversight and monitoring of the fulfilment of public service broadcasting obligations clearly set out in legislation and, in the case of RTE, in a public service charter.

We are not saying that they cannot be addressed within a single, unitary framework but that they are separate issues that must be addressed. We seek a debate on the best model for Ireland given the scale of our market and its current constituents. Our specific concern as the national public broadcaster is to ensure that the values espoused in public service broadcasting are defended in that context. No criticism is implied if we say that we doubt that the BCI is the appropriate model. It is simply that the circumstances are different and we seek fresh thinking.

I apologise for having to step out for the previous presentation. Like the witnesses, I had to give an interview on the radio, something equally compelling and demanding, as the Chairman knows.

The Deputy is very popular today.

It has been one of those days. On the independence of the national broadcasting authority and the public service element, do the witnesses see any dangers for the national broadcasting service in a future of increased competition, deregulation and so on? The repeal of certain parts of the Broadcasting Act with particular reference to digital terrestrial broadcasting was referred to. Independent broadcasters say that the national broadcaster has an unfair advantage. Given the broadcasting fund now set up, how does Mr. Goan see the playing field developing between RTE and the independent broadcasters? What will happen with that see-saw given that the fund has been in place for some considerable time? We all await the new broadcasting Bill which will probably tell us more regarding the answers to those questions.

Mr. Goan

Rather than the dangerous competition suggested by the Deputy, we see them as real challenges for us in that the market has changed dynamically. Over recent years, members will have been aware of the spread of satellite television. More than 30% of Irish homes now have digital satellite television. Well in excess of 50% receive cable or MMDS. Multichannel television has been a reality in Ireland for a long time. What has changed is the number of channels which has increased exponentially over recent years. In those circumstances, it is not surprising that broadcasters, particularly the biggest guy on the block, get pinched.

Since the 2002 submission to the forum, we have said that our circumstances are such that we propose a unique offering for the Irish public through programming particularly relevant to them, made at home, and for and about those audiences. In return for the receipt of public moneys, we made certain commitments. There is no such obligation for any other broadcaster with the exception of TG4. For the purposes of the argument I make, I include that. It is part of the public service approach to programming that in return for certain moneys, certain obligations are fulfilled.

We believe that in Ireland such a mixed-funding model is appropriate for the future. The unfair advantage alleged to be given to RTE in that context depends on one's vantage point. RTE is in receipt of dual funding, but it does not have the same regulation regarding minutage of advertising per hour. It is allowed approximately 20% less minutage per hour than TV3, and the same applies on radio.

Should legislation be introduced?

Mr. Goan

No, I am not asking that there be that. I am simply pointing out that special pleading is made on one side, and I would like to redress the balance somewhat by saying that the circumstances are not all in favour of the public broadcaster. I do not seek to change it but for it to be more widely appreciated.

RTE is responsible for a significant amount of home production in house and with the independent sector. It is part and parcel of Ireland's sense of itself. It is not a matter of the individuals at this meeting or even of those employed by RTE. It is about the sense of Ireland as a society having an opportunity to express itself free of special interest. That is the idea that we prize. We have found a particular way of funding it through public and commercial sources. We seek to maintain that in an era when the opportunities for the sovereign expression of a view are ever more endangered.

There are some views to the effect that TG4 should be independent of RTE and free-standing, on the basis that it would allow for greater competition and that it would be able to compete more with every other competitor in the marketplace. It might also be better able to measure its developmental requirements and needs. How does Mr. Goan feel about that?

Mr. Goan

I am slightly torn on the issue. The Deputy will know that I was connected with TG4 for several years. A pragmatic view, shared by my colleagues in RTE, expressed by it as far back as the time of the forum and informed by the experience of the past nine years is that funding is crucial. TG4 already has editorial autonomy. There is no element of determining the nature of TG4's schedule to compete with either RTE One or RTE Two. The key issue is funding to allow TG4 to provide an Irish-language schedule to the audience coherently. That remains my view. The view of TG4 is that independence is the best way to achieve that funding, but I differ.

Does Mr. Goan regard RTE as the big brother?

Mr. Goan

I would be wary of saying that. I have regarded RTE in various ways over the years. However, having had the experience of dealing with a very motivated group that believes in a public service enterprise, I feel that the heart of RTE's concern is the expression of Irish views in an Irish way across all media. TG4 would be better served within that overall structure. It is not the view of the service or the Government. We will enforce absolutely the view of the Government and facilitate whatever is required. However, I would like to express that reservation.

What about the programming that RTE supplies to TG4?

Mr. Goan

That is already provided for. It is a statutory provision in the 2001 Act.

Is Mr. Goan saying that at some point a hostile Government might find it easier to squeeze TG4 if it were not part of the State's main public service broadcaster?

Mr. Goan

I would not like to second-guess the future. I say simply that in an area of increased competition where the focus should be on enriching what we in the publicly owned broadcasting enterprise can sponsor together, in the context of international competition our collective chances are better. This is my own sincerely held view, which is not shared by TG4.

Different views are emerging with regard to the role of the regulator. For example TV3 has said the BCI should be the regulator and it was passionate on the subject. TG4 has no problem with the BCI or some similar body being the regulator. The RTE group of unions and the NUJ made the case that there should be one independent body acting as a contact regulator, with two divisions, one responsible for public service broadcasting and the other for commercial broadcasting, because of the differences involved. They also urged that there should be a separate body to issue licences for radio and television. In other words, the regulator of content should not be involved in the awarding of licences. What is the view of Mr. Goan's organisation on that?

Mr. Goan

I have tried to outline the various areas which require attention. It is perfectly possible for those areas to be given specific attention within an overall unitary regulatory framework as long as the specific remit of each of those divisions is clearly defined. I am not suggesting that the Ofcom model should be followed, but in so far as it is a regulator of the general market in the UK, with the exception of BBC content, it has very clearly defined cabinets of responsibility where specific areas are catered for, while being referred back to the centre, overall, for a co-ordinated view of everything. I am not suggesting this should be the solution for Ireland, but it is possible. Once the specific areas of responsibility and concern have been identified as well as the manner in which they should be addressed, all of that can be catered for under a single regulator.

Yet the BCI observed today that the Ofcom model is not working satisfactorily in the UK.

Ms Patricia Galvin

In many respects the Ofcom model is a British solution to British broadcasting ecology. It was seven years or more in the making. An enormous amount of public debate and attention was invested into how it should be statutorily set out. It functions as a converged regulator, as the director general mentioned. There are specific distinct functions within that regulatory body, such as dealing with the telecommunications infrastructural area, content and complaints, the new media and the development of content regulation. There are distinct functions within that format for which the persons responsible report to a board. That reflects the policy objectives that are set by both the DTI and the DCMS in government. It appears to be working extremely well.

Is Ofcom's an advisory role or does it have a licensing function as well?

Ms Galvin

It does. It has all of the functions, in fact, that the director general just outlined — the seven distinct functions that we have identified. However, public service broadcasting is still very much the preserve of its own charter and reports directly to the government. Ofcom has responsibility for programme standards and codes that the BBC must also adhere to, such as taste and decency and basic programming mores. In market analyses, if the BBC, for example, is to introduce new services, Ofcom has a role in carrying out a competition assessment to ensure these will not impact on the wider broadcast market. There is a PSB charter, but then all other functions sit within Ofcom.

Is there any difficulty with Ofcom, as regards the EU or does Brussels have any difficulty with that particular model?

Ms Galvin

No, it does not.

I welcome Deputy Eamon Ryan back and I thank him for his time as he has been involved in other matters today.

I must apologise to the committee as I was preoccupied with the Minister of State with responsibility for marine affairs. A news story was breaking and, unfortunately, I had to respond to that and other matters. I apologise for my absence, but I will be able to check the record of proceedings. If I ask a question that has already been dealt with, I would like the Chairman to intervene.

Mr. Goan's comments here some months ago indicated difficulties he had in the different treatments applying to the BCI subtitling arrangements in respect of TV3 and RTE. One of the main arguments he made at the time was that it might be difficult for the commission to become a single regulatory authority. Given that the BCI said today that it recognised that its role in a broader regulatory authority would be one that oversaw the implementation of the RTE charter as it was, as well as the conditions applying to commercial broadcasting, is there any reason other than the example he has given, of subtitling, which would justify the BCI not being able to act in this capacity?

One of the interesting points the committee heard from Mr. Harris dealt with the development of digital services, particularly in the UK, and the likelihood of the possible roll-out of a national digital service there from 2008 onwards. As regards RTE's role as the caretaker or manager of the transmission system, has Mr. Goan any fears that if we have not developed a national digital transmission system by 2008, or close to that date, that we are in danger of a de facto situation where commercial satellite broadcasters will become, almost, the national platform, given that so many of the channels the Irish public is accustomed to watching on a wide free-to-air basis will only then be available in this format? Is there a danger that if we do not develop our own digital system very quickly, that in a sense we will be subject to forces outside our control and will not have control of the main platforms that evolve and develop?

Mr. Goan

To return to the issue of subtitling, perhaps I did not convey as effectively as I should my belief that a subtitling requirement of 100% of programming is a legitimate ambition, not just for PSBs but for all broadcasters. It is a matter of right. I do not believe that commercial considerations in the evolution of subtitling, as emanating from certain points in history, is relevant. We are talking about the present and the target should be 100% for everyone. I used that as an example at the time, simply to indicate that there were different considerations. It is not the only one.

I referred earlier, when Deputy Eamon Ryan was not present, to some consideration we have given to the consultation process that the BCI has on derogations from the 20% news and current affairs requirement for independently run radio services. That is a matter of concern for us. It is a matter of concern that there should be equally applied criteria. There are obviously different elements but they should be approached with equanimity of spirit as regards what the consumer gets rather than anything else. I am not gainsaying the requirement of independent companies to make a return for their shareholders. However, I like to think that there is a common good involved as well, which should take precedence over this, in certain cases. I am not sure that the history of the BCI, set up as it was for entirely bona fide reasons to do one thing, can emerge to be another. That is the point I have been trying to make.

I note that the last time we spoke on this subject that it was the only topic that was picked up afterwards by the newspapers. I regret that, as we talked about a range of matters on that day. I would not like this session today to be characterised as BCI bashing by RTE. It is not. It is simply to point out that we have reservations about certain things. Our concern, which I hope has been conveyed effectively today, is that the viewer and the listener are best served by any change in legislation. We are here to serve them.

Mr. Goan knows that we have no control over what people will broadcast or write.

Mr. Goan

I know it well.

Am I right when I say that Ofcom in the UK has the responsibilities mentioned by the director general, but that the content of the public service broadcaster in the UK, the BBC, is regulated by its board of governors? The EU has no difficulty with this model which is more or less the same model being operated today by the RTE authority.

Ms Galvin

Yes, that is correct. The European Commission has no concerns about this model. The BBC is undergoing its charter review at the moment and it should be renewed in 2006. There may well be some changes to the structure of the board of governors, but the belief is that the governance of public service broadcasting is a separate and distinct function that requires a perspective that is different from commercial broadcasting and its regulation.

Some time ago, Ofcom published interesting papers on migration to digital broadcasting. We have not had such information from either RTE or the BCI. In areas like that, Ofcom can set out a way forward for all broadcasting and the public sector broadcaster would be expected to grapple with that as well.

Ms Galvin

Absolutely. There are core programming standards, taste and decency issues and codes of practice on broadcasting to which all parties adhere.

Mr. Goan

We must be alive to the fact that we are behind in rolling out digital broadcasting in Ireland. A number of people receive digital satellite television from Sky and a small minority have Freesat from the BBC. For reasons to do with rights and spillover, I do not think that unencrypted digital satellite is a viable option for Ireland in the medium term. For reasons of sovereignty and regulation, digital terrestrial television, DTT, is the best answer for Ireland. The authority has articulated that view very clearly in the past and it is a matter of some urgency that we finalise our plans for that. We welcome the fact that the Department of Communications, Marine and Natural Resources has asked for declarations of interest in establishing a pilot programme for DTT in Three Rock and Clermont Carn.

Is there a concern that if we do not get DTT quickly enough, the market may get ahead of us and it may be impossible to introduce it after a commercial satellite system has taken the lions' share of the market?

Mr. Goan

There is always that concern. We are available on satellite and we are not disenfranchised to the extent that we are not carried on certain services. The key determination is national regulation and satellite platforms are not regulated within this territory. I know that some of the previous speakers pointed out that some broadcasting services are targeting their services at Ireland but are not regulated here. That seems to us to be a significant danger for Irish broadcasting.

Who should intervene in such a case?

Mr. Goan

The position outlined by the chairman of TV3, Mr. James Morris, and by RTE, TG4 and the Minister, Deputy Dermot Ahern, during the Irish Presidency of the EU is that these services should be regulated in the target country rather than the country of origin.

The Irish Hard of Hearing Association was very pleased with the progress of RTE on subtitling. The committee commends RTE on that work. Screen Producers Ireland said that RTE pays the lowest production fees when compared with other UK-based broadcasters. I will not question Mr. Goan on that because we will ask him next year why RTE paid too much. However, the area of copyright is very important. Programmes are made for RTE, which then owns the copyright and does not pay royalties to those who made the programme. We had the same difficulty when we were in Australia with the screen producers there. We visited the public service broadcaster in Australia and it uses subtitles in 43 different languages. I have no doubt that Mr. Goan feels that Screen Producers Ireland and the companies associated with them are a very important part of producing programmes for RTE.

Mr. Goan

It is a significant indication of the changes in Irish broadcasting that there has been such a burgeoning of independent production. We are very proud to have been involved in the commissioning of some very high quality programming from the independent sector to complement the high quality programming which we develop. Our commitment to the independent sector is well beyond that which is required by law. This year, RTE will spend €60 million on the independent sector, which is well in excess of double the legal requirement for the sector. There is no reluctance to engage with the independent sector and we value it. There is a sense that we need to work together to develop the sector and to have producers who are capable of leveraging their position in Ireland to greater effect internationally.

We have a fundamental difference with SPI on the question of copyright. There is no question of RTE ever depriving independent producers of the opportunity to profit from their work. In most cases, the programmes are 100% funded by the public purse and there is an obligation on us to ensure that we retain as much as we can of the return on that. That does not preclude the producer from being involved in discussions on how to maximise the return. It seems to me that we have been caught up in some point of ideology about who goes best to market when selling these programmes. That is a moot point and we are happy to engage with SPI on it.

However, our primary aim is to service the Irish audience. Where the programmes we commission are for the Irish audience, it does not bring a guarantee that the material will be necessarily suitable for an international appetite. There are tensions around that and we must manage them. We believe that the approach that we have adopted has been pragmatic. In future, as evidenced by our investment in the independent sector, we will continue to be pragmatic and to help independent producers develop.

Another point was made today by SPI about children's programming. RTE has been very conscious that it is required to spend more on children's programming. There is no question about that and we have committed to spending more. It is probably a compliment that we are where we are and that people have so many expectations of us, including the feature film sector. However, our primary purpose is to service television, radio and, increasingly, on-line audiences and we propose to do this. Where it is in keeping with the interests of broadcast television schedules, we have invested in feature films and will continue to do so. However, it would be entirely wrong for us to subscribe to a quota of moneys for feature films out of the public purse.

We are committed to increasing the quality and range of our children's programming and this is something of which we are acutely conscious.

Does that include animation?

Mr. Goan

We have a seed fund for animation at this time. It is a limited amount of money which we make available for Irish animation. Like feature films, animation requires very significant investment. RTE can be of benefit as a co-producer or co-funder. However, our likely contribution to products that would have international sales would be relatively small.

With regard to copyright, is Mr. Goan saying that once a production is made for RTE and shown on one of its stations, it then belongs to RTE or the State?

Mr. Goan

The copyright is retained by RTE but we are happy to discuss with anyone how the future exploitation of the production can be managed most effectively and how profits can be divided.

RTE has done some outstanding work in terms of archiving and a tranche of national cultural assets. This is an area in which we must reiterate the importance of public service broadcasting as the guardian of such assets. Does RTE interact much with the commercial sector with regard to archiving or is the sector expected to maintain its own archives? Is there a sense that RTE is the guardian of the entire broadcasting sector? Is there much interaction on the cultural side in terms of commercial broadcasting? Has there been any attempt to utilise the orchestra and choir further?

Mr. Goan

With regard to archiving, the Deputy has rightly pointed out that most of the material has been amassed thanks to public support of the licence fee over the years. The primary consideration for RTE into the future is preservation of that material, which is transferred to digital, and the solving of genuinely complex questions surrounding access for the public and other broadcasters who may wish to exploit the material. Some level of payback must be achieved. All this happens in the context of rights because while we acquire material, we do not have complete rights over it. Residuals must be paid to the producers, actors or writers involved. It is not a simple case of us having the material and doing what we wish with it. There are significant issues surrounding the matter.

We have stated to the new and previous Ministers, as far back as our submission to the forum in 2002, that we believe a national approach to an audio-visual archive policy is required. It extends beyond broadcasters into many other public institutions which have gathered, for one reason or another, significant, valuable assets. I do not propose the establishment of a national audio-visual archive because that is not necessarily required. However, a unified policy that considers questions of access, copyright and exploitation is required.

Would Mr. Goan suggest putting that in legislation to make requirements of commercial broadcasting in respect of this area?

Mr. Goan

Archiving was mentioned as a specific aspect in the first phase of the broadcasting fund. However, we are disappointed that it has not been developed in the first tranche. The BCI is actively consulting with broadcasters at this time about how that might develop and I would welcome that.

I thank Mr. Goan and his officials for attending. We have had a very useful exchange of views today which has been helpful to the committee. I hope the Minister and his officials will also find the presentations helpful when framing the new legislation and also take account of our deliberations which will add value to the process.

The committee proposes to issue a report which includes the submissions made and transcripts of today's evidence. It will set out, in tabular format, the issues that should be addressed in the forthcoming legislation. The committee does not intend issuing any recommendations. However, we gave the main players an opportunity to put forward their views and clear the air on a number of issues which we hope will be taken on board by the Minister and his officials.

Is there not an e-government experiment in regard to this Bill? Is the Chairman intending to put today's deliberations on the Internet? In addition to the main players, ordinary citizens will be able to make a response to the matter. I am not sure if it will happen on the Department's website or the Oireachtas website.

I am advised by the clerk that all the transcripts of today's meeting will be up on the website in ten days' time. We will then put everything into a report format in hard copy. We had a disk for last week's report. When the report is completed, everything, including the transmission, will be on the website.

I thank everybody for attending, in particular my colleagues who have been in and out of different meetings today on behalf of their constituents and parties. I also thank everybody who made a presentation. It has been an extremely long day and I am glad that we finished business within one day and that everybody had the chance to put forward their views and cases. Once again, I thank Mr. Goan and his officials.

The joint committee adjourned at 6.35 p.m. sine die.

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