The Government will have to foot the bill for digital television as the private sector is no longer interested, a consultant's report to the Government has outlined.
It may also have to increase RTÉ's licence fee if it decides to go ahead with the multimillion euro plan.
The briefing paper, which was prepared by National Economic Research Associates, concludes that the Government's plan to establish a commercial digital television network is now "extremely unlikely" to be viable.
The report concludes that the lengthy delay between the first failed attempt by the Government to launch a commercial service in 1999, and the present, has undermined the chances of success for a commercial project.
BSkyB's continued penetration of the market and the BBC's decision to broadcast its channels unencrypted into Ireland have also significantly changed the competitive landscape, says the report which was released under the Freedom of Information Act.
Irish consumers would be reluctant to pay for a service that is already available free to any users with a satellite dish under the BBC's freeview model. The strength of cable and satellite in the Republic provides a strong challenge for an aspiring digital television operator, it says.
The report says that the Government now has two choices: doing nothing, and perhaps ensuring that digital terrestrial television (DTT) is never available in Ireland, or implementing the proposed DTT service itself.
DTT is a method of broadcasting digital television services to households using a national television network that has been upgraded from analogue. It is already offered in Britain, Spain and a host of other EU countries.
However, a Government plan to licence a private operator to build a DTT network in 1999 collapsed after lengthy delays in the process caused by disputes over the ownership of the network and the downturn in the market.
The consultant's report says implementation of DTT by a State body, probably RTÉ, has the potential to secure Government control and guarantee a high quality free-to-air service. It would also provide an enhanced service to viewers without the need to pay cable or satellite subscription fees and eventually enable the State to switch off the analogue transmission system.
As the DTT service would be free to Irish users, there is no direct way to cover these costs. So the Government would have to decide if the expected cost to the Government is justified in terms of the benefits to the Republic, concludes the report.
