Trevor Sargent (Dublin North, Green Party)
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Question 50: To ask the Minister for Communications, Marine and Natural Resources if he has satisfied himself that he has the necessary time and resources to respond within the one month deadline to the request by the European Commission for greater transparency on the application of public funding by RTE to public service broadcasting purposes; the timeframe within which the Government has to comply with the recommendations set out in the Commission's letter; and the consequences of failing to meet those recommendations. [8277/05]

Noel Dempsey (Meath, Fianna Fail)
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I propose to take Questions Nos. 50 and 82 together.

The investigation into the funding of public service broadcasting in Ireland arose in the context of a formal complaint by TV3, made originally in 1999, alleging infringements of Articles 92-94 of the EC treaty relating to, among other things, the payment of licence fee revenue and direct grants to RTE. This is one of a number of complaints made by commercial television operators across the European Union against the funding arrangements in various member states for public service broadcasters.

The investigation so far has involved the gathering of information by the Commission with a view to assessing whether there is any substance to the complaint. The letter which was received from the Commission on 3 March sets out its preliminary views and is regarded as a necessary first step in what could be a lengthy investigative process. The letter also sets out a number of recommendations which the Commission considers must be implemented before the funding scheme for RTE can be considered as compatible with the relevant provisions of the EC treaty.

The recommendations proposed by the Commission are of a detailed legal and regulatory nature which I will carefully consider with the advice of the Attorney General and I will also consult with RTE over the next month, by which stage a reply is required by the Commission. I welcome the fact that the Commission has found that the financial measures granted in favour of RTE and TG4, in the form of licence fees, are considered as existing aid.

It is worth recalling that the funding arrangements for RTE have been in place since the enactment of the Broadcasting Authority Act in 1960. That Act provided that RTE would be funded from a combination of television licence fee income and commercial income principally generated from the sale of advertising. In the time since Ireland's accession to the EEC in 1973 there have been many developments and clarifications in relation to European state aid and competition laws. As regards public service broadcasting, as recently as October 2001 the EU Commission published its guidelines on how it would interpret and apply the treaty obligations in this sector. In view of this it is not surprising that the Commission has found that some aspects of Ireland's arrangements are incompatible with elements of the EC Treaty.

This matter is being given the highest priority within my Department. Under Article 17(2) of Council Regulation (EC) No. 659/1999 laying down rules for the application of Article 93 of the EC Treaty, Ireland will have one month to respond to the Commission's preliminary view. Article 17(2) also allows for an extension of the time where the Commission considers this to be justified.

Following this process the Commission may then issue a formal letter under Article 18 making recommendations proposing appropriate measures designed to bring the scheme into line with the treaty. Such a recommendation may propose: a substantive amendment of the aid scheme; the introduction of procedural requirements; or the abolition of the aid scheme.

Under Article 19 Ireland must accept or reject these recommendations. If Ireland rejects the proposals, the Commission may proceed with a formal investigation procedure under Article 4 of the regulation. This is a more formal procedure which imposes strict deadlines. Non-compliance with a negative decision at the end of this process will be pursued by the Commission in the Court of Justice for the European Communities. At this stage I am confident that Ireland will be able to achieve a satisfactory outcome.