Mr. Bob Collins:

I will take the questions in the order that the Chairman asked them. One of the points I could have made in my opening remarks, except that I wanted to keep them as brief as possible, was that we need to ensure broadcasters are fully present in a digital environment and that they are where their audiences access content. We recognise the need for continuing investment by RTE in its digital presence so that it is always ahead of the audience and is available wherever its audience chooses to receive content.

That is relevant to the discussion on UTV. With the development of DTT, greater capacity exists for additional channels. There were hopes and expectations that commercial digital terrestrial television might emerge with additional channels, all of which suggested that small as this market may be - if one considers it as a market - none the less by international comparisons it has relatively few domestic broadcasters. The emergence of UTV is an important development. It already has a strong presence in local radio and it has an established and long-term position in Northern Ireland. Its plans to develop a new channel in this State to carry new domestic content will be a source of additional choice for audiences. It will inevitably increase the level of competition for existing broadcasters and will probably have a greater impact on TV3 than on RTE because the ITV programming it will carry forms an important element of TV3's schedule.

The entry of UTV highlights anomalies in the legislation, about which we have spoken previously, in that UTV will apply for a licence under a section of the broadcasting legislation that imposes far fewer obligations than are imposed on TV3, RTE or TG4. It will not be obliged to pay the levy which funds the activities of the BAI even though RTE, TG4, TV3 and all the radio broadcasters contribute levies. That is anomalous and, on the face of it, unfair but it is what the law provides. Its entry will undoubtedly have some impact but it will probably also offer advantages to the audience in terms of additional choice and content made in Ireland if what it identifies as its plan comes to fruition and if the case it will make to the BAI for a licence is sustainable.

The question of how to define public service broadcasting is as old as broadcasting itself. The BAI and, I think, everybody else involved in broadcasting recognises that everybody who is engaged in broadcasting contributes to the public service and the public. The services provided by local radio stations and the news and current affairs programmes broadcast by TV3 and all the radio stations undoubtedly add to the sources of information available to Irish audiences. However, the law clearly defines public service broadcasting in terms of RTE and TG4. The law provides that apart from the 7% going to the sound and vision fund which we administer and which is open in the main to independent producers and broadcasters, the funding raised from licence fees goes to RTE and TG4. Our statutory review process did not give us the possibility of altering that fundamental statutory basis, which has been part of Ireland's infrastructure for the past 53 years. We recognise that every broadcaster has been under pressure because of the economic difficulties of the last several years and we have on a number of occasions put on record our appreciation of the extent to which they have attempted to sustain schedules as vigorously as possible within their constraints. Some of the newer radio stations are encountering more turbulent waters than others but the broadly based local radio stations are generally doing well. In their applications for new licences and licence extensions, the processing of which is currently ongoing, there is a significant degree of confidence in they way they are approaching the future.

The question of RTE 2fm needs to be raised with RTE because a clear distinction needs to be made between the way in which formal accounting is done for the allocation of licence funding and the actual costs and revenues of 2fm. It does not appear to make sense to have a significant licence fee attribution for the operational running costs of 2fm. The formal accounting for the deployment of the licence fee by RTE across its services is a different issue and it may not reveal the reality of the costs of 2fm. That is an issue that would be more appropriately explored in detail with RTE.

Crowe Howarth constructed its view on the base case, as RTE described it in its plans for the next five years. That base case was essentially the range of services currently provided. Crowe Howarth felt it could not interpose itself between RTE or TG4 and what it would like to see as the range of services available to an Irish audience. RTE clearly stated that it would like to do other things and it outlined them in general terms in a part of its five year plan.

That was insufficiently detailed to give us a clear view of what exactly would be in the schedule for the additional revenues that were returned. We would have failed in our responsibility had we taken the Crowe Howarth report, put it in an envelope and passed it to the Minister because we have a statutory obligation to take account of the detail in that report and reach our own conclusions on what we think is appropriate.

Given the intensity of the competition and the extent to which external television programmes dominate the environment, we took the view that the interests of the Irish audience, broadcasting and democracy require that there be a stronger level of domestic content than is available in Ireland from the public or commercial television broadcasters. For that reason we identified the need, subject to certain stringent conditions, for additional funding to be made available to RTE and for a rebalancing of the overall broadcasting funding to enable commercial broadcasters to have access to a greater level of commercial funding to improve everybody's capacity to produce more Irish-made content. In the case of RTE, we specifically said the content produced should clearly be of a public service character and distinctively different from what commercial broadcasters would be expected to produce.