Mr. Richard Moat:

I thank the Chair and the committee members for inviting us. With me is my colleague, Mr. Glen Killane, managing director of Eir TV and Eir Sport.

Eir is Ireland’s largest telecommunications provider, offering broadband, mobile, voice and TV services. We have invested €1.6 billion in the past five years and, specifically, we have invested over €600 million in upgrading our fibre network in recent years. This investment underpins our television and content platform, which we launched in 2013. To enhance this platform, we acquired Setanta Sports and offer the full suite of BT sports channels. We rebranded Setanta Sport as Eir Sport last year. We have acquired further exclusive content and now provide over seven different channels. Today, we have almost 75,000 subscribers to our television service and 220,000 subscribers to our Eir Sport service.

We are here to convey our concerns regarding the potential introduction of retransmission fees, which would fundamentally alter the current must carry-must offer framework and, in our opinion, would have a significantly detrimental impact on the broadcasting ecosystem in Ireland. It is our view that the current framework governing this area is fit for purpose. There is a symbiotic relationship between RTE and platform providers such as Eir. RTE’s content provides value to TV platforms like Eir, and there is also substantial value that flows in the other direction to RTE. Platform operators provide valuable distribution for the broadcaster, which increases audience reach, and operators ensure prominent placement on the electronic programme guide, EPG, which allows the broadcaster to maximise advertising revenues and fulfil its mandate for universal access as a publicly funded broadcaster.

In our view, the proposed change to the must carry-must offer provisions has very little international precedent. It would in effect introduce double taxation for over a million households with pay-TV subscriptions, according to the latest TAM Ireland figures, which are already paying the licence fee.

Practically speaking, the implementation of retransmission fees would be drawn out and complex and would impose a significant burden on the State’s regulatory agencies, which already have a full agenda. As detailed in the Communications Chambers report, as circulated to the committee, there is very little international precedent for retransmission fees, especially in jurisdictions where those broadcasters are already funded by a public licence fee. The United States has retransmission fees, however the broadcasters that receive them do not benefit from licence fees, so it is not a valid comparison.

Closer to home, the UK’s Department for Digital, Culture, Media and Sport, DCMS, considered retransmission fees in 2015 but, for reasons laid out in the Communications Chambers report, did not proceed with introducing them. The DCMS review only addressed the case for retransmission fees for commercial terrestrial channels ITV and Channel 4, as retransmission fees for the BBC were not sought by the BBC as it is funded by the licence fee. It is important to note that unlike the BBC, RTE already has a dual stream of income with public licence fees and commercial advertising. What is being sought is effectively a third, additional new subsidy.

We also take the view that the implementation of retransmission fees would likely be complex and drawn out and it would be several years before any funds would flow to RTE. There is no solid precedent for a standard economic methodology to set retransmission fees. There is no mechanism or body for determining appropriate rates. Based on what has happened elsewhere it is unclear how disputes between the broadcasters and pay TV platforms over the appropriate level of fees would be resolved. The changes mooted to the current framework could end up requiring serious time and resources from the BAI which is the obvious dispute resolution body. Undoubtedly this change would end up consuming scarce resources with the platform operators such as ourselves, which could otherwise be put to good use to produce either more Irish content or greater product innovation for Irish consumers.

We would like to frame the debate from a different perspective, one that better reflects the rapidly changing global media landscape. Consumers are shifting away from traditional broadcast TV to view content through alternative methods provided via global internet brands such as Google, Apple, Microsoft, Amazon and Facebook. Increasingly, viewers are watching content delivered over the internet at the time they want it and on the device they want to watch it on. Eir and other service providers are investing significantly to provide the connectivity consumers need to access this world of content. Eir and the other Irish Pay TV platforms continue to place the RTE brand front and centre of our respective entertainment propositions and we invest heavily in product innovations that help keep RTE relevant. The introduction of retransmission fees would significantly damage the dynamic between platform providers and the broadcasters and over time could undermine the place of RTE in over 1 million homes served by the platforms. We suggest the focus should be on fostering even greater levels of partnership between the companies. We look forward to continuing to explore ways to work together to meet the evolving needs of Irish viewers in a global entertainment market.