An internal document prepared for RTÉ management has warned that a new free satellite service from the BBC could result in RTÉ and other Irish channels losing substantial audience share and revenue.
The document warns that within two years any viewer in Ireland will be able to buy a satellite dish for about €300 and access the BBC's new "Freesat service" which will give them more than 100 British channels.
The document says RTÉ, TV3, TG4 and cable companies such as NTL and Chorus could be seriously undermined by the development of the Freesat service.
The service involves the BBC broadcasting its services for free and unencrypted via satellite.
The company intends to introduce the service after terminating previous arrangements with BSkyB, which carried BBC channels on its satellite, but in an encrypted form.
While there has been discussion for some time about the threat of the service, the document indicates that the BBC's service not only has implications for RTÉ, but the communications sector in general.
While BBC channels and American channels such as CNN would be available on the Freesat service initially, the document warns that other channels - Channel 4, Channel 5 and ITV - could come on stream within two years.
"Crystal clear UK TV services will be available anywhere in Ireland for a one-off charge, probably around €300 or less, and many viewers in Ireland will simply cancel their cable deflector or MMDS services," says the document.
RTÉ sources have acknowledged that viewers will continue to want Irish programming and RTÉ would still be available via so-called "rabbit ears" aerials, but the station is worried that consumers will soon lose patience with switching from satellite to aerial and back again.
The other major concern about the BBC's move concerns what happens to programme rights.
The document warns that UK broadcasters may seek to buy rights for Britain and Ireland and then sub-licence the Irish rights to RTÉ, which would be an unwelcome development for the State-owned broadcaster.
However, the impact for TV3 would be lessened because of its links to Granada Media Group.
"Again this is an area fraught with uncertainty, legal difficulties and an element of custom and practice tolerated by third party licensors," says the document.
The document emphasises that the Freesat service also have implications for what it calls "Ireland Inc".
"A Freesat offer of all UK terrestrial channels available via satellite in Ireland would fundamentally undermine the business case for an indigenous DTT platform whether free or pay, due to prior availability, nationwide coverage and very low cost receivers," it warns.
RTÉ executives are concerned the station could end up being part of a pay digital service via Sky, while other viewers will be able to get other channels via the BBC service for free.
The document raises the possibility of "reviewing" the station's current satellite distribution policies.
RTÉ channels are currently part of the Sky Digital service in Ireland, although one possible implication of the BBC move is that RTÉ could attempt to end this arrangement and look for some way to join the BBC platform instead.
"Independent production companies based in Ireland would be considerably impacted by a large UK Freesat offer as this would impact audience shares, revenues, ability to commission programmes and commercial viability of some broadcasters in the longer term," says the report.
