The system of funding RTÉ through a combination of the television licence fee and advertising is seriously distorting competition in the Irish television market, according to a report published by DKM consultants.
The report prepared for the Independent Broadcasters of Ireland, questions RTÉ's broad remit which allows taxpayers' money to be deployed to fund such shows as Fair City, You're a Starand Celebrity Farmwhich have no public service purpose.
According to Colm McCarthy of DKM, the licence fee is in essence a poll tax levied on the public regardless of whether RTÉ is viewed or not. "By our analysis only 30 per cent of RTÉ's programming fulfils a public service remit and based on this, we believe that there is a strong case for a radical overhaul of the licence fee," he said.
Commercial operators have long protested that the licence fee which accounts for approximately half of RTÉ's €300 million budget gives the State broadcaster a superior financial position and handicaps competitors in the acquisition of programming.
RTÉ's financial dominance is such that it can spend more on sport alone in any one year than the entire annual revenue of TV3, the report finds. RTÉ justifies its expenditure on popular programming as it considers its content to be part of a public service package.
DKM's analysis questions the economic rationale of classifying Champion League football games as public service when broadcast on RTÉ but not when they are carried by TV3. Similarly, Coronation Streetwas classified as public service content when broadcast on RTÉ but is no longer such when shown on TV3.
The report calls for a single communications regulator, possibly incorporating Comreg and the BCI, to oversee a more competitive market where public service broadcasting obligations are more explicitly defined and financed.
The report also recommends that RTÉ should be relieved from its current non-commercial obligations such as the National Symphony Orchestra and TG4 which could be funded through the Arts Council.