In this issue
Minister must act with caution
|Kevin Rafter on why the government must act prudently on reviews of State assets and liabilities|
Pat Rabbitte would be advised to tread warily around the recommendations in the latest tome from Colm McCarthy. The UCD economist chaired the Review Group on State Assets and Liabilities. The group was established by the Fianna Fáil-Green coalition but its report on raising revenue for the cash-strapped Irish State was published last month by the new Fine Gael-Labour administration. Clocking in at 179-pages and dealing with an array of topics from forests to airports to electricity, the new Communications Minister should read carefully Section 15 on broadcasting.
Some of the recommendations in Section 15 make sense, including the sale of RTE Networks. This division manages the national broadcast transmission system from about 140 transmission and relay sites in strategic locations around the country. It is involved in a €70 million switch from analogue to digital technology which will help Digital Terrestrial Television (DTT) and free-up value spectrum space.
With adequate safeguards in place to guarantee state control of spectrum and usage in the event of a national emergency, the sell-off proposal is hardly contentious. The decision would also bring Ireland into line with other EU countries where broadcast transmission networks are independent of individual broadcaster companies.
The report moves into less clear-cut territory in relation to the recommendation that the proportion of the licence fee which is allocated to the Sound & Vision Fund - seven per cent of the total - should be "increased substantially". This funding supports independent programming in public service content areas. In justifying such a fundamental policy change, McCarthy offers a mere 14 words: "in order to better equalise conditions of competition between RTÉ and the private broadcasters."
A serious debate is needed on the future of the licence fee and on how to fund broadcasting content of a public service nature. Sadly, this report makes no contribution to this nascent debate. The licence fee suggestion is a lazy proposal that reads like it was written on the back of an envelope. No analysis for the rationale underpinning the decision is offered while no analysis of the impact of such a change is provided.
The concerns of privately owned broadcasters appear to be the sole reason behind the recommendation. These are worthy of consideration but joint-up policy making requires greater explanation of what "increased substantially" would mean for RTE, for programme content or for the audience. The public good - and public service content - are key concepts in any debate about the future of the licence fee.
There is serious merit in examining the allocation of the licence fee. The S&V fund has been a successful innovation in Irish broadcasting. Its introduction has impacted on the schedules of many privately owned TV and radio stations. Quality programming, particularly in the documentary and children's area, was produced with fund support. The impact of the more recent change warrants greater scrutiny to determine how and where the money has been allocated, and what type of audience value has been achieved.
Personally, I believe there is a case for an orderly increase in the allocation to S&V, and perhaps even ring-fencing specific budget amounts for broadcast output such as an independent national news service to enhance plurality. Any such move needs to carefully consider all the ramifications. It needs proper analysis and careful reflection, not more‘top-of-the-head' policies which landed Ireland in its current economic mess.
Total licence fee income in 2009 was €225.3m, with €55.7m coming from the State itself to fund the free system for over-70s and social welfare recipients, and the rest from the pockets of individuals like the current author. An Post received what seems like a generous €12.4m for running the collection and enforcement system. (Surely this fee must interest those focusing on value-for-money?) After An Post was paid, RTÉ received €200.2m in 2009 with €11.9m being allocated to S&V.
‘Minister Rabbitte must carefully consider what the licence fee is supposed to achieve and how it should be allocated' - Kevin Rafter
The amount to RTE represented 53.4 per cent of the station's income in 2009, the balance coming from advertising. This is where the McCarthy Report put its narrow focus, the impact of a dual-funded RTE on the commercial activities of privately-owned broadcasters. It is an issue but it is only one issue among many.
The first step in any review of the licence fee system should be to request far greater transparency in its internal allocation from RTE. The national broadcaster said licence fee income was spent in the following areas in 2008: RTE One, 40.9 per cent; RTE Two, 24.5 per cent; Radio One, 9.9 per cent; Lyric FM, four per cent; RnG, 7.5 per cent; support to TG4, 5.5 per cent and performing groups, 7.7 per cent.
RTE operates different internal divisions but it is far from clear from its annual report the extent to which these divisions engage in cross-subsidisation of non-licence fee activities with licence fee income. RTE says it does not, but a positive development would be to establish each division as a fully autonomous legal entity with full transparency in the linkages between them. Once this change was implemented, the minister could carefully consider what the licence fee is supposed to achieve and how it should be allocated.