Ms Dee Forbes:

I thank the Chairman and the committee for inviting us here today for what we hope will be a really good and robust discussion. With me here today are colleagues from RTE, Brian Dalton, managing director corporate affairs; Aisling McCabe, our head of platforms and strategy, and Eleanor Bleahene from our legal team. In addition we have asked two colleagues from the international media strategy firm Mediatique, Mathew Horsman and Paul Fleming, to join us, to help provide some important context on the specific issues of copyright reform and retransmission fees, which is a complex area.

Unfortunately, I was away last week so I missed the future broadcast event the committee held last Friday in Dublin Castle but I have had incredibly positive feedback from colleagues and others on the day. I echo the congratulations to the committee on having planned such an event. It seems there was broad agreement on the need for an independent, publicly-funded national media organisation to continue to play a central role in Irish life. It also seems there was a degree of consensus that the TV licence fee is in need of significant reform and modernisation. That is very welcome.

I am also delighted that the committee has engaged in a thoughtful process to understand the very real challenges facing public service broadcasting here in Ireland. RTE welcomes discussions on these issues, and if we can be of any help to the committee as it thinks more about this in the coming weeks we would be very happy to help.

As Ireland's largest public service broadcaster operating in an industry facing unprecedented change, the committee is aware of the many challenges facing RTE. We will shortly be publishing our annual report for 2016. The committee may have seen some of it already. While 2016 was a strong year in terms of audience it was also a challenging year in terms of finance. The exact details will be published next week and will show a deficit for 2016.

As I said the last time I was here, most of these challenges are for both RTE and the broadcasting sector to solve. We must continue to engage audiences with great programming and strong journalism. We must make the most of newer technologies to connect and interact with, and be relevant to, audiences in new ways. We must invest in our infrastructure and digital technology to position RTE for the future. We must restructure to create a more integrated organisation and, like every organisation, continually fight to reduce our costs. We must also develop new sources of commercial revenue to help sustain the public services and programming Irish audiences continue to really value. All of these areas are for us to address and while many of these are in progress, I look forward to outlining to members our new five-year strategy later in the year, once we have completed it.

The one aspect of public service broadcasting that is outside our control is the TV licence system. That is the responsibility of the Minister, Government and this House, and RTE cannot fix it though we are reliant on it for over 50% of our revenue. Some commentators seem to think that we should not continue to advocate for reform of the TV licence system, even though everyone knows, as was confirmed again by Friday’s discussions, that it is fundamentally broken. The reason we keep advocating for reform is because there has been no reform. The current uncertainty around the TV licence fee system, both in its current performance and in how and when it might be reformed, is making it almost impossible for RTE and those reliant on us to plan for the next year ahead, let alone the next five years as is expected by our regulator and the Department. The cost of the TV licence fee has now not been increased in a decade. This is unlike virtually every other public or private utility. To keep pace with inflation, stamps have increased in price, newspapers, pay TV subscriptions, health insurance, phone bills, hospital fees, electricity, broadband, bus fares - almost anything one can think of, so why not the TV licence?

During 2016, on average, Irish adults spent an hour watching RTE television and an additional hour listening to RTE radio every day. RTE’s online and mobile services are also among the most popular and frequently used in the country. Currently at €160, the TV licence costs Irish households 44 cent a day. The most vulnerable in Ireland have their TV licence paid through the household benefits package. If the TV licence fee had simply kept pace with inflation since it was last raised, as it is supposed to do as set out in legislation, the TV licence today would be at €175 per household per year, or rather 47 cent per day, still just over one quarter of the cost of daily broadsheet newspaper. That change alone would bring in an additional €15 million to public service broadcasting, to both RTE and the independent production sector which is very reliant on that income. Licence fee evasion in Ireland is among the highest in Europe at approximately 15%, with some €40 million being lost each year to public service broadcasting and programming in both RTE and the independent production sector. A further €20 million is being lost each year through outdated TV licence exemptions, no longer reflective of how people are consuming TV. These exemptions were written before the iPad even existed or a whole host of TV services like Sky Go, RTE Player and TG4 Player had become so prevalent.

The failure to reform and modernise the current TV licence system is now clearly unfair on those who do pay it and who are subsidising those who do not. It is costing jobs across the sector, is causing a stark reduction in Irish-made TV programming, threatens the provision of trusted news and current affairs and has a stifling effect on the potential of the Irish broadcasting sector as whole. Sensible and achievable reforms, many of which have been introduced in other European countries, could transform the sector here in Ireland and help to ensure the long-term viability of a strong Irish broadcasting voice.

I was encouraged by Deputy Dooley’s reported comments last week that the Irish television licence fee system needs to be completely reformed to ensure proper funding for public service broadcasting. In the context of comprehensive reform, I agree with him that it would be appropriate for a sensible discussion about how the increased proceeds of that reform might support public service broadcasting and programming, both inside and outside RTE. I very much hope that the committee will encourage decisive action and advocate for comprehensive reform, because without it much of the ambition that I know many in RTE have for public service media, and indeed that many members of this committee have for us, will simply be impossible to achieve.

In this context, we welcome the opportunity to give the committee our perspective on the proposed legislation and to give our views on the issue of retransmission fees, which we strongly feel should be accommodated within this amendment Bill. Indeed, as members will see from our own suggested amendments, they are relatively straightforward and they are sought in a context where RTE and other Irish free-to-air broadcasters must offer their channels to any appropriate network, no matter how small or how large. The key change we are looking for is the insertion of two words into section 77(11) and section 77(12) of the Broadcasting Act, which when allied with the Minister’s proposed changes to copyright legislation would simply provide for an entitlement for RTE to be paid for what it is obliged to offer. This would finally level the playing field for fair negotiation between Irish broadcasters and TV platforms. Sky, Virgin, Eir and Vodafone are key partners for RTE and other Irish broadcasters. We have worked, and will continue to work, well together - it is in all our interests. These pay TV platforms, crucially, allow us to maximise our reach with audiences, a key tenet of public service broadcasting, and allow us to generate commercial impacts. In turn, as Mr. Horsman and Mr. Fleming will illustrate in detail shortly, we are creating very significant commercial value for them. In our view the relationship, largely because of the law, is now very imbalanced in favour of platforms.

Creating a level playing field by amending legislation is not a guarantee of any outcome. It is not a handout and it is not double taxation as the platforms may allege, but it will allow for a fair commercial negotiation on the basis of value. Not only could these reforms help RTE maximise its commercial revenues, as it is required to do by law, it could also provide crucial new revenues to all Irish broadcasters, essential to ensure continued investment in Irish programming and the Irish independent production sector. These reforms would also ensure that broadcasters can protect the value of their channels and programming from a whole new category of market entrants.

Access for consumers to broadcaster channels on pay TV services is changing at a rapid pace. In recent years, the simple onscreen TV guide is increasingly being pushed to the side with home screens, which offer consumers all sorts of choices from on-demand programming, Internet services and movies and other services competing for the attention of audiences. It is reasonable to ask whether the existing pay TV providers in Ireland would have been able to grow such successful businesses here without free access to Irish free-to-air channels, the channels that remain, despite so much change, by far the most popular in pay TV homes. As of today, under existing must-offer legislation, should Facebook, Google, Amazon or Apple want to launch a TV proposition in Ireland, they could simply ask for our linear TV channels and we would be obliged in law to offer our channels to them free of any fees. While there may have been a rationale many years ago to support the growth of different forms of TV access, is it reasonable for this to continue now not just for the existing players, but potentially for a whole new set of operators, many of whom are some of the most well-resourced media companies in the world?

Members will have seen from our submissions in advance of this session that we have included two detailed papers relating to copyright reform and retransmission fees. One details our specific suggested legislative amendments and the other, from Mediatique, is a detailed submission which we believe sets out a fair description of the current arrangements between broadcasters and platforms in Ireland, and strongly makes the case for a fairer system. We are conscious that these are complex issues and that is why we have asked Mr. Horsman and Mr. Fleming to come in, walk members through their submission and give them the opportunity to ask questions on both the international context and the benefits of a levelling the playing field between broadcasters and platforms.

Before I do that I wish to briefly comment on the other aspects of the amendment Bill as currently presented. All of us here, including my colleagues around the table, share an ambition for Ireland to produce much more diverse and high-quality Irish programming and content to benefit the viewer; for there to be strong, fair, independent broadcast journalism and investigative reporting; for there to be more investment in key genres like TV drama and children's programming and in innovation; for there to be a thriving and creative independent production sector; and for there to be a plurality of voices, viewpoints and viable outlets and sources in Irish broadcast media at both local and national level.

Overall, given the scale of reform I believe everyone here considers necessary with regard to the TV licence fee in particular, if this version of the Irish media landscape is to happen, we are somewhat disappointed at the scope of ambition and likely impact of the proposed Bill. That is not to say there are not some welcome developments, because there are, but there an opportunity to do more.

RTE believes strongly in the central role of the broadcasting regulator, the BAI. Its role is becoming more complex as technology evolves and audiences are consuming media in more fragmented ways. Clearly the BAI needs to be resourced properly to fulfil its role. Making adjustments to facilitate the BAI regulating new broadcast services that may move to Ireland due to Brexit makes eminent sense, as indeed it makes sense to amend legislation to give the BAI discretion on section 71 licenceholders in respect of the BAI levy.

However head 4 of the proposed Bill is of concern to us. Given the context of a host of independent reviews - many of them conducted by the BAI itself - stating that RTE should receive increased public funding, we were somewhat surprised that an outcome of the Bill as proposed would result in a further cut in public funding to RTE. If, as stated, the current BAI levy was to be part-funded up to 50% from the TV licence fee, it would result, by our calculations, in a net loss of approximately €1.6 million to RTE per year. That monetary figure could grow further should the BAI's costs increase.

We are very aware of the financial pressures currently on all broadcasters and would welcome measures to relieve the regulatory cost burden for everyone, but to do so in a way that has the net effect of reducing RTE's public funding further hardly seems either fair or consistent with all the independent reviews suggesting the reverse needs to happen. We believe that any move to use TV licence fee revenues to directly pay for the BAI's costs should only happen after real TV licence fee reform begins to deliver increased revenues.

RTE welcomes the move to consider the TV licence collection arrangements. However, in respect of head 5 of the Bill as set out, it appears that should the Minister appoint an issuing agent following a public competition, it would not be given the enforcement powers, under section 145, to do the job. RTE would welcome further clarification from the Department as regards the proposed amendments here and what purpose they serve.

As for head 6, RTÉ welcomes the initiative to support the development of young journalists through a new bursary scheme administered by the BAI. The scope and scale of this scheme is, however, unclear, nor is it clear how it might impact on the funding allocated to other BAI schemes. RTE would welcome clarification from the Department as to what is being planned.

RTE greatly welcomes head 7, which proposes the removal of the copyright exemption that currently applies to cable operators. RTE has been advocating for such a measure for a number of years now and it is a welcome development. I will now hand over to Mr. Horsman and Mr. Fleming from Mediatique to take the committee through some detail on the transmission fees.