RTE plans to launch four new digital television channels with annual running costs of about £40 million (#50 million), despite a lower than expected licence fee increase, according to its new director of digital media.

Mr Eugene Murray, who was appointed head of digital in May, says RTE is preparing detailed proposals for a 24-hour news channel, an education channel and a youth channel.

A fourth channel based on coverage of the Oireachtas is also planned. This would include live broadcasts of Dail question time, committees and the Northern Ireland Assembly.

The four new channels, together with RTE 1 and Network 2, would fill RTE's allocation in the multiplex operator, Muxco, which will market the service.

RTE's new proposals will be submitted by October or early November to the Government, which RTE hopes will sanction a new rise in the licence fee for the autumn of 2002.

RTE has expressed disappointment at the £14.50 increase set by the Minister, Ms de Valera, and some commentators have said this could affect RTE's digital strategy.

The running costs of the four channels will come to about £40 million. More than half this figure would come from advertising, partners and content sales, with the remainder made up from the licence fee.

In addition, RTE faces capital costs of £12.6 million to build digital infrastructure, and an additional £9.6 million to migrate existing channels onto the digital platform.

Some of the proceeds from the £117 million sale of Cablelink and the disposal of RTE's broadcasting network will fund the first few years of the digital strategy, says Mr Murray.

But an increase in the licence fee will also be required, he adds.

"The ongoing funding requirements of digital services should be agreed at a high level of government prior to RTE embarking on the digital project," he says.

Digital television will provide consumers with better sound and picture quality, more choice and interactivity. The cost of broadcasting is a fraction of analogue, says Mr Murray.

The first of RTE's new digital channels, its 24-hour rolling news channel, is scheduled to be on air by autumn 2002 and will need Government approval this side of Christmas, says Mr Murray.

"This would broadcast a news wheel similar to other 24-hour news stations, with headlines on the hour and the usual mix of sports, business and weather," he says.

"The real value added of the service is that we will start to broadcast the news from 7.00 a.m.; currently, the first TV news broadcast on RTE is at 1.00 p.m."

Customers will be able to interact with the channel using the Digital Terrestrial Television Network, which will be called Netco. About 20 per cent of network capacity will facilitate data transmission and some internet services.

RTE's news channel may differ from other comparable international channels as it will change into a sports channel from Friday evenings and over the weekend, says Mr Murray.

It would broadcast live indigenous sports events, including GAA, rugby and show sports highlights and archived material.

RTE proposes to broadcast the news channel in analogue format (without the interactive services) as well as digital because of the low penetration of digital television in the Republic.

By making it available to more people RTE would increase advertising revenues, which are estimated at £1 million in the first year, says Mr Murray.

But it will not be self-funding, he adds.

"Our current estimates are that it will require on an ongoing basis £8 million to £10 million per annum to run, so you are talking about £8 from the licence fee."

Although RTE is seeking to cut 330 positions or 15 per cent of its workforce to deliver cost savings, an additional 50 journalists will be required to deliver new content, he says.

The recent launch of the Onbusiness Web portal, which utilises resources from the RTE newsroom, Aertel and the RTE website, will become a model for other sections such as sport and entertainment.

But rationalisation of staff will not provide the cash to fully fund digital, and RTE is seeking partners to help it get the project off the ground.

RTE estimates its digital education channel would cost £10 million in start-up phase and £25 million per year on an ongoing basis.

In the early stage the station is proposing to fund the channel with £5 million from the licence fee and a further £5 million provided by the Department of Education.

"Right across Europe you find governments are looking at the extra broadband provided by digital to provide new learning services," says Mr Murray. "RTE is sitting down with the department and saying what is it that Ireland can do in the areas of lifelong learning and formal education."

When the channel is running, RTE hopes to attract £10 million funding from the department, £10 million from the licence fee and an additional £5 million from private sources.

These could be colleges or private institutions that want to establish courses on the channel, he added. RTE is currently talking to the National Centre for Technology and Education.

The bulk of the education programming would be commissioned outside RTE, although archived material and foreign programming would also be used to fill the schedules, said Mr Murray.

The digital format will deliver learning tools with strong interactive backchannels enabling viewers to click through during a broadcast to access textual information.

RTE's youth channel will be aimed at pre-school children until 4 p.m. and teenagers in the evenings. A lot of the material will be acquired from abroad with a focus on celebrities and comedy, but the channel will be fronted by Irish presenters.

"We think there is a good business case to build a youth-oriented channel, which will be self-funding in the medium term," says Mr Murray.

With running costs projected at about £4 million in the first few years RTE is seeking a partner for the channel.

The costs involved in setting up an Oireachtas channel would be small as the content is already provided free of charge by the Government, says Mr Murray.