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Pay-TV Operators Stand Firm against RTɒs Push to Introduce Retransmission Fee
05 Oct 2017 : Nathan Griffin
Pay-TV Operators have affirmed that they will not carry RT channels should legislation be passed by the Joint Oireachtas Committee that would allow RT charge a retransmission fee for their services.

On Tuesday, October 2nd, a number of Pay-TV operators submitted a joint report to the Joint Oireachtas Committee to argue against RTÉ’s proposal to removal legislation that would allow RTÉ charge Operators such as Sky for airing their current ‘free-to-air channel.

Currently, RTÉ are legally obligated to provide their standard definition channels to Pay-TV operators without charge. However RTÉ recently challenged this obligation, as they believe that its channels are the most popular on the Pay-TV platforms.

Aisling McCabe, RTÉ Head of Platforms and Partnerships, emphasised this point when speaking with the Sunday Independent:

"There is no justifiable reason why platforms such as Virgin or Sky should get Irish free-to-air channels and content for free and then charge customers to watch these Irish channels - the most watched channels on their platforms - and not give any fair value back to these channels to reinvest in original Irish content.”

"By changing the legislation, RTÉ will have the opportunity to negotiate a fair payment for the value we create for pay-TV operators through our original content. There is no hostility between RTE and platforms; this is just about getting value, on behalf of the licence fee-payer, for the content we produce, so that we can reinvest in original Irish content."

Contrastingly, Sky, Virgin, Eir and Vodafone commissioned a report by London based consultants ‘Communications Chambers,’ which warned of “significant drawbacks” to Irish broadcasting, should this legislation be passed.

The ‘Implications of retransmission fees for Irish broadcasting’ Report warned of a number of areas that would be affected by this change including: Price hikes due to double taxation, Loss of viewers due to customers changing to cheaper alternatives such as ‘FreeSat’ boxes, and blackouts on air, which are claimed to be heavily linked with retransmission complications.

Speaking to the Joint Oireachtas Committee on Thursday, Sky Director of Policy and Public Affairs, David Wheeldon stated:

“We are of the view that allowing it to do this would negatively affect all parties, including, most importantly, Irish citizens accessing programmes they have already paid for via a licence fee.”

“So for the avoidance of doubt, Sky would not pay RTÉ for its public service channels should RTÉ no longer be obliged to provide them for free. Of course, in such scenario RTÉ might decide voluntarily to withdraw from the main TV platform in over 40% of Irish homes in which case there can only be losers,”

When addressing the claims made by RTÉ that Sky does not contribute fairly to help generate original Irish content, Wheeldon said:

“We estimate that around €32m of RTÉ’s advertising income is derived from viewing on the Sky platform. Beyond this, our current commercial agreement with RTÉ means we provide specific financial contributions and benefits in kind to RTÉ, in return for certain services.”

Tony Hanway, CEO of Virgin Media Ireland also spoke to the Joint Oireachtas Committee stating:

“Unfortunately, the answer lies in the fact that RTÉ mistakenly believes that this (Legislation reform) will produce a large financial windfall that can solve its budgetary challenges whilst avoiding hard decisions that would otherwise be required to manage its costs. We believe it is not in the interests of the public to throw money at the problem so as to shield RTÉ from these financial realities,”

The TV licence which currently costs €160 annually has been the centre of much debate for a number of years, on a number of issues and does not seem to have an easy solution.

A ‘Public Service Broadcasting Charge’ on all primary residences and certain businesses was suggested by Enda Kenny’s Government (2011-2016), but is yet to materialise with Minister Naughten recently alluding to the idea once again, claiming that it would be a cheaper, more efficient process.

Denis Naughten, Minister of Communications:

“If we move to a universal type charge, if we do move to that type of charge, I would expect to see these costs for people coming down rather than going up, there is absolutely no justification for that (the fee going up) and it would be a far broader spectrum in relation to it,”

Minister Naughten believes that replacing the TV licence with a public service broadcasting fee would allow the government become more efficient at obtaining the annually fee from residents who own a television or radio in Ireland and therefore lower the overall cost of the fee. In September 2016 an estimated 13.75% of the population evaded paying their TV licence, representing approximately €40 million lost revenue for broadcasting and funding.  

“It’s not just about the funding, it’s about what you do with that funding, and let me be crystal clear to you, I’ve absolutely no intention whatsoever in increasing the licence fee because I don’t believe that the people who are paying for everything should have to pay more for the people that are prepared to pay for absolutely nothing and you’ll find that it’s the same people that pay for nothing.”

The TV Licence fee makes up 50% of RTÉs annual income, whereas the rest of its income is generated from the commercial broadcasting on its radio and Television stations. 7% of the balance is used for the BAI's "Sound and Vision Scheme", which provides a fund for programme production and restoration of archive material which is open to applications from any quarter.

TG4 did not obtain licence fee revenue directly prior to the 2011 Budget, but did so however indirectly as RTÉ was required to provide it with one hour's programming per day, as well as other technical support. RTÉ's accounts estimated the cost of this as a percentage of its licence fee income, amounting to 5.3% in 2006. The remainder of TG4's funding is direct state grants and commercial income.

The 2009 McCarthy Report, commissioned in response to a growing economic crisis, recommended that €10m of TG4's funding should in future come from licence fee revenue; without increasing the fee, this would entail a matching reduction in RTÉ's funding. This reduction was included in the government’s 2011 budget, which was introduced in December 2010.

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