Business Opinion: An uneasy truce appears to be holding between RTÉ and TV3 over the issue of how public money is allocated and used in the broadcasting industry.
The Department of Finance estimates that you, the public, will probably chip in about €178 million to RTÉ's coffers in 2005. A firm decision on whether the licence fee should be increased is expected to be taken this week when Noel Dempsey meets his Cabinet colleagues.
Based on the company's most recent set of accounts, advertisers are likely to contribute at least €132 million in sponsorship and advertising income to RTÉ.
TV3 has a problem with both of these things.
The station, owned by CanWest, Granada Group plc and some private Irish investors, has maintained that RTÉ's role in the advertising market is highly damaging to competition in the sector.
The station claims that RTÉ deliberately does not charge the true price for its advertising in an attempt to squeeze competitiors and effectively engage in some kind of below cost selling.
TV3 has also alleged that RTÉ unfairly outbids TV3 for bought-in programmes, much of it in the sports area. Unfortunately for TV3 these claims have now been tested by the Competition Authority and a group of Government-appointed consultants and found wanting.
Last week a report commissioned by Mr Dempsey rejected the TV3 complaints without equivocation. Firstly, it made the not unreasonable point - why would RTÉ deliberately endanger its own commercial prospects by charging below cost for advertising? Especially when it incurred losses of €14 million in 2000, €71 million in 2001 and €56 million in 2002. It only broke even in 2003.
The report also suggests that advertising prices are not set according to some kind of "smoke and mirrors" system hidden from public view. They are set based on a cost per thousand system. In other words, the report stated, the rates are set "by dividing viewers reached by RTÉ into the net revenue paid to RTÉ".
The figures calculated for one month form the rates for the following month.
So, on this basis the only way RTÉ could be fiddling with the system would be if it was giving substantial discounts or rebates to advertising agencies or their clients without the knowledge of auditors or other agencies. The report however knocks this on the head. "We had no evidence of that."
The report also brutally dispatched the TV3 argument about RTÉ outbidding competitors for bought-in programmes. "There are occasions when RTÉ could very well be justified, by the reasonable expectations of attracting larger audiences, in paying a higher price for programming."
In other words, why should RTÉ not outbid others for programmes, particularly when it has such a broad public service remit and seeks to serve all parts of the community?
But this is where the authors drift onto weaker ground and maybe it is where TV3 can find some crumbs of comfort.
The authors base the premise of their report on the following bald assertion: "The essence of the remit laid upon RTÉ is that, if RTÉ were the only television or radio channel that Irish viewers could receive, it should be complete and satisfying for the population, including minority interests as a whole".
It suggests the whole RTÉ schedule "may be thought of as public service broadcasting" as a result.
But self evidently RTÉ is not the only service available - there are now six services operating out of the Republic alone - RTÉ One, RTÉ Two, TG4, Sky News Ireland (albeit on a limited basis), TV3 and Setanta Sports, never mind the plethora of channels streaming in from the UK. The Broadcasting Commission of Ireland is considering licensing more services.
Clearly the old remit cannot be sustained if it is solely based on this argument about "if RTÉ were the only television channel viewers could receive".
The real argument the Government needs to examine is not what is good for RTÉ or TV3 or Sky, but what is best for the viewer. More competition might be a start? While politicians regularly decry tawdry elements of American television, consumers are increasingly embracing digital TV with its endless choices. Sky has over 300,000 digital subscribers for instance.
Viewers would appear to like more choice and advertisers might reasonably expect prices to come down with more channels chasing the revenue. Setanta is a good example of a small Irish owned station serving a specialised audience. Why not have channels in that mould?
The recent report quoted TV3's allegation that RTÉ regularly outbid TV3 for sports coverage at prices it had no hope of recouping via the licence fee. But the report points out that TV3 has the right of first refusal on programmes from the Granada stable, including serious money spinners like Coronation Street.
Because there is so little Government planning or policy direction in this area we have a surreal broadcasting landscape.
RTÉ is spending large sums acquiring overseas sporting rights like Formula One and British Premiership football, Irish language station TG4 is buying in American movies like the Matrix and TV3 each week at peak times simply shows the same programmes that are on UTV (the report found that 20 per cent of the channel's peak schedule was simulcasts with UTV).
The latest report on this controversial area manages to kill off some longstanding claims and counterclaims. But we will need another report to finally tackle the wider issue of getting greater competition, diversity and choice into the market.
