I thank the Chairman. I will give a brief introduction and background to the legislation before moving on to discuss the substance. I would first like to thank the Chairman of this committee, Deputy Naughton, for inviting the Department to participate in today's meeting. I hope that today's exchange will be of benefit to the committee in its consideration of the proposed amendments to the Broadcasting Act. I will make a brief opening statement and then, following the contributions from RTÉ, TG4 and the BAI, my colleagues and I will be available to answer questions.
Following a request from the Minister, this committee agreed last October to review the issue of the future funding of public service media. This culminated in a very useful consultative forum at Dublin Castle last Friday, which in turn helped to educate and inform stakeholders about the challenges facing public sector broadcasting. When the Minister wrote to the committee on this issue, he indicated that he would also be bringing forward legislative amendments to the Broadcasting Act 2009 to deal with some of the shorter-term funding issues. Since then, the Minister has sent the draft scheme of the Broadcasting (Amendment) Bill 2017 to this committee for pre-legislative scrutiny.
Committee members have already been provided with some briefing on the heads of the Bill. In addition to scrutiny of the Bill, the Minister requested that the committee consider the issue of retransmission fees, which are not currently included in the legislative amendments. I propose to set out the key elements of the Bill and an outline of the need for consideration of retransmission fees. The draft scheme of the Bill contains a total of seven heads, which deal with the funding of broadcasters and improving TV licence fee collection. I will set out the most significant proposed amendments.
One of the difficulties associated with the current TV licence system is the unacceptably high level of evasion, which is estimated to be more than 14.6%. This is very high by European standards with, for example, the UK having an evasion rate of 7%. The figure in Ireland equates to a loss of approximately €40 million per annum to public service broadcasting, which includes the broadcasting fund that supports the independent audiovisual production sector. The evasion rate in the UK fell from 13% in 1991 to the current 7% after the BBC engaged commercial companies to undertake the licence fee collection role. On the basis of legal advice received from the Office of the Attorney General, however, it is clear that the current legislation does not allow for the Minister to appoint a TV licence agent by way of public tender. The proposed amendments to section 145 would rectify this situation.
The proposed amendments to sections 33 and 123 of the Broadcasting Act 2009 are designed to allow for the Broadcasting Authority of Ireland, BAI, to be allocated public funding from TV licence fee receipts towards meeting its operating expenses. A further amendment in section 33 provides criteria that the authority can consider when determining the granting of exemptions, deferrals or reductions in the levy for individual broadcasters or classes of broadcaster. It is intended that the consequent reductions in levy contributions would be applied across the board by the BAI in order that all broadcasters would benefit in equal proportion from the measure. It is proposed that smaller community radio stations will be exempt from the levy altogether.
The section 71 licensing process was established in the 2009 Act as a means of encouraging new market entrants, and particularly with regard to new and innovative forms of audiovisual media that might have a smaller audience appeal. As such, it was determined that section 71 broadcasters would not be subject to paying the BAI levy. Section 71 is, however, the only way in which new entrants, including traditional linear broadcasters, can establish themselves to provide broadcasting services in Ireland. Given the likelihood that some UKbased broadcasters will look to establish a base in Ireland following Brexit, it is considered that the current provision should be amended in anticipation of this possibility. This head, therefore, proposes providing the BAI with greater flexibility in determining the classes or types of section 71 contracts that might need to be issued in a postBrexit scenario. The proposal and provides for amending the levy provisions to allow for the possibility of bringing section 71 broadcasters within the scope of the BAI levy. This would ensure that, where appropriate, such services can be required to contribute towards the costs of their regulation, which would serve to reduce the burden upon other broadcasters paying the levy.
It is proposed to amend the provisions of section 154 to allow for the creation of a new funding scheme that would allow the granting of bursaries to journalists in local or community radio stations. The purpose of the scheme is to promote the development of good journalistic practices and standards in local radio. The proposed amendment takes account of the BAI's objective to "provide a regulatory environment that will sustain independent and impartial journalism" set out in section 25(1)(d). The authority would determine the number and amount of bursaries.
It is proposed to repeal the current exemption for cable platforms that is provided in section 103 of the Copyright and Related Rights Act 2000 on the basis that there is no longer a public policy objective served in maintaining this exception. This exemption was originally introduced in the late 1980s to support the roll-out of cable television services in Ireland. This task has largely been achieved and, in any case, television services are now available over a wide range of platforms, including satellite. The exemption only relates to Irish broadcasters. The cable operators are not exempt from clearing rights in respect of any of the UK channels that they carry. The way the system currently works is that RTE, TV3 and TG4 clear both the broadcast rights and the content rights for all platforms. By repealing this provision, the rights holders for the content would have the flexibility to negotiate the clearance of their rights with the broadcasters or directly with the platform operators, whichever was deemed most beneficial to them. The broadcasters would also be free of the onus to clear all of the rights for every platform. The amendment would also remove the anomalous situation where a platform operator can exploit this provision to retransmit content which the public service broadcasters do not have the right to broadcast outside of their own network. It is worth noting that a similar approach has been taken in the UK Digital Economy Act, which was enacted at the end of April this year.
I will now address retransmission fees. The issue of amending section 77 to allow Irish broadcasters subject to "must offer/must carry" obligations - RTE, TV3 and TG4 - to negotiate adequate compensation for the content they provide to television service providers has been identified by RTE as a potential significant source of revenue for public service broadcasters. A legislative amendment would be required in order that broadcasters can seek to agree financial terms with relevant platform operators, including Eir, Sky, Virgin Media and Vodafone. The platform operators are not in favour of amending the existing regime in this area. The Minister is of the view that it would not be prudent to progress any legislative proposal without detailed consideration being undertaken. He had advised the Cabinet of his intention to ask this committee to engage with both the public service broadcasters and the platform operators on the issue of retransmission fees.
I hope this submission assists the committee's consideration of the draft legislation and I look forward to answering any questions members may have.