Chairperson, Ladies and Gentlemen,
I’d like to begin by thanking the members and staff of the BCI for organising today’s conference and for inviting me to speak. This conference with its range of distinguished speakers is timely in the context of the consultation process surrounding the draft Broadcasting Bill published at the end of the summer, and in the context of the technological changes that are challenging our concept of what broadcasting is.
Times change. In 1988 at the set up of the IRTC a route was mapped for the development of an independent broadcasting sector in Ireland. It was to be different. It would reflect the unique local and regional make-up of Irish society and culture.
The principal franchises were offered for commercial operators to come and make a mark in developing a business with a freshness and newness. A space was made for community radio, reflecting the goodwill, community spirit and volunteerism prevalent in Irish society.
Casting an eye over the last two decades of independent broadcasting we see a hugely successful story of development. Listeners and viewers around the country have significantly increased choice.
Public service broadcasters have grown from strength to strength in that same period and have indeed multiplied - TG4 celebrating 10 years of a Suil Eile. Broadcasting in Ireland is inclusive, successful, established and dynamic.
Where will we be in another 20 years? Who knows? What I do know is that the rate of change only gets faster. However in change there will be opportunity. As Government we must ensure that the legislative and regulatory environment is flexible enough to accommodate such change if we are to ensure the continued growth and development of the sector.
It is to the draft legislation that I propose to turn your attention this morning.
The draft Broadcasting Bill has been sent to the Joint Oireachtas Committee on Communications, Marine and Natural Resources, who are holding public consultations on the proposals under the eDemocracy initiative. Following this process I propose to introduce a Broadcasting Bill into the Houses of the Oireachtas in 2007 in the light of the outcome of this consultation process.
The proposed structure of the Broadcasting Authority of Ireland is for a single body with two semi-autonomous committees, one dealing with the issue of the award of broadcasting contracts, the other dealing with compliance issues.
The BAI will work with everyone in the sector whether commercial, community or public service broadcasters, or independent content providers to deliver the needs and wants of the viewer and listener in Ireland.
The draft bill also proposes that the sector should contribute towards the cost of the BAI. The concept that the sector should pay for its own regulation is the norm rather than the exception – as is evidenced in the telecommunications, energy, financial services and aviation sectors.
Turning to the public service broadcasting aspects of the draft bill, two principal changes are proposed.
The first relates to the alteration of the public service remits of RTÉ and TG4. The changes proposed will permit them to fully utilise the opportunities offered by web technologies to deliver on their programming mandates, and to broadcast to the Irish emigrant community in Britain. On the issue of broadcasting to the Irish community in Britain – an issue that has broad cross Party support - I am currently exploring the possibility of introducing a separate piece of legislation to this facilitate this service.
This proposal arises out of the recommendations of the Task Force on Emigrants, and in an apt way demonstrates the cultural value and need for Irish generated content.
The second major change is the codification of the process for the oversight of public funding of RTÉ and TG4. The process proposed contains the following key features. Independent generation of proposals by the public service broadcaster, review by an independent body, transparency of decision making and political accountability for the overall level of what is regarded as a public service broadcasting tax – the television licence fee.
The draft bill also attempts to address some of the concerns expressed during the course of the Radio Licensing Review including but not limited to-
1. A perceived lack of transparency surrounding decisions of the BCI to award radio licences,
2. Concerns regarding the sums of money being paid on the change of ownership of radio stations, and
3. The costs incurred by applicants in preparing applications for the award of a radio licence.
As regards the first issue, in the awards process with such a lot at stake it is critically important that the process is transparent, and is seen to be transparent.
You might not agree with the outcome but you should understand the mechanism by which it was arrived at. In that regard the draft bill attempts to increase the level transparency surrounding such decision making.
On the issue of the amounts being paid for radio stations, there is a public perception that valuable radio licences are being issued at little or no cost to the awardees. They in turn are able to realise large capital gains through the sale of the company holding the licence. This perception is not fully justified. There are many good reasons for such capital gains including inherent value built by astute management, potential for economies of scale, and an unrealistic price paid by the purchaser.
There are however circumstances in which such concerns may be justified. Such circumstances may arise where there is a limitation on the number of contracts that can be awarded, for example due to spectrum constraints, and as such the potential for supernormal profits is high.
To allow the BAI to address such a possibility the draft bill proposes to empower the BAI to include as part of the selection criteria for the award of a contract the amount of royalty or cash sum that the applicant is willing to pay i.e. any likely supernormal profit bubble is lanced at birth.
It is intended that the use of such a mechanism would be the exception rather than the rule. The focus remains on ensuring high quality, innovative and diverse offering for the listener.
As regards the proposed fast-track mechanism. This is intended as an instrument to alleviate the cost to an incumbent of re-applying for a contract where there is no other substantive applicant.
The contract renewal period of five years has drawn criticism as being too short. Perhaps the purpose of this proposal has been misconstrued.
The view remains that competition for contracts is good for the listener and that there should be no automatic renewal of contracts, and the fact remains that the spectrum belongs to the people of Ireland.
The five year period is intended to allow the BAI to consider its overall contract award strategy with a view to ensuring substantive competition at a point in the medium term.
I propose to turn now to the issue of enforcement.
At present the principal enforcement instrument available to the BCI is the revocation of a broadcasting contract. Revocation is in essence a determination that a person is unfit to hold a broadcasting contract. As in other jurisdictions this mechanism is a measure of last resort and is rarely used.
In theory what is required is for the regulator to have an adequate range of proportionate enforcement instruments available to it – what Professor Ian Ramsay in his work for the Australian Communications and Media Authority has described as the enforcement pyramid model – ranging from warnings and persuasion at the base, through to fines and other instruments in the middle, and finally to revocation at the apex.
As you will have observed the draft general scheme proposes administrative fines as one means of addressing this issue.
A number of other options have been considered, but for the moment put to one side. These include the use of penalty points and the option of requiring all broadcasters to maintain financial bonds that could be drawn on in the event of non-compliance.
The former option suffers from the drawback that it is still focused ultimately on revocation, and the latter option might prove overly expensive for broadcasters to maintain, particularly for the smaller broadcasters.
Further work, consideration and debate is required on this element of the draft bill – a debate in which I am anxious to hear the views of all interested parties.
Finally I would like to conclude by again thanking the members and staff of the BCI for today’s opportunity to speak. I appreciate that for the last number of years they have had to live with the uncertainty as to the future of their organisation. Hopefully the recent publication of the draft Bill will mark a beginning to the end of that uncertainty.
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