The Minister for Arts, Heritage, Gaeltacht and the Islands, Ms de Valera, appears determined to make life difficult for RTE and to reduce the station's influence in terms of public service broadcasting. Her decision, reached after a delay of more than eight months, to grant the national broadcasting authority a licence fee increase of £14.50, when a sum of £50 was sought, was parsimonious. It ensures that RTE will continue to operate at a loss, ignores representations made by the Authority she herself appointed, and will almost certainly inhibit the station's involvement in a new, commercial, digital terrestrial transmission system designed to provide Internet and other interactive services. Last year, Ms de Valera became embroiled in a major controversy when she suggested that RTE should be excluded from a shareholding in Digico, which will operate the proposed digital terrestrial transmission system. Her Cabinet colleagues did not agree. The upshot is that RTE will buy a stake in the new digital company when it sells its transmission system later this year for an estimate of £40 million upwards. RTE was also expected to fund new services, such as a 24-hour news channel; an educational channel and a service aimed at young adults from the proceeds of the sale. The cost of the digital initiatives has been estimated at £57m by 2006.
In its request for the first licence fee increase in five years, RTE said the sum was required to deal with mounting losses within the station and to ensure the provision of a satisfactory level of public service broadcasting. In spite of a series of cutbacks and economies at the station, those losses have continued. The fee increase granted will raise an estimated £6m this year, it is not expected to cover the projected loss.
The Minister has embarked on a dangerous course of action. RTE is cash rich. It has a positive bank balance of £117m from the recent sale of Cablelink. And it may raise a further £40m through the sale of its transmission network. In the normal course of events, such resources would be used to grow and develop a business. And this is what RTE had intended to do through expansion into digital broadcasting and the provision of other services. But Ms de Valera appears to regard RTE's cash reserves as a wasting resource, to be frittered away through a series of annual deficits. It has been estimated that, by 2006, RTE's losses will reduce its reserves to £45m.
Deliberately running deficits is no way to conduct a business. That way lies commercial ruin. Seven months ago, the chairman of the RTE Authority, Mr Paddy Wright, warned that international broadcasting developments could marginalise Irish interests in the coverage of sport, music, politics and culture. And he advocated a securely funded national media organisation. Support for a strong public broadcasting station has also come from IBEC and the ICTU. By adopting a penny-pinching approach, the Minister appears to have lost sight of the big picture.