It might not be such a bad idea after all for RT╔ to get into bed with Rupert Murdoch. From the punter's point of view, at least, it looks like a winner. If RT╔'s three channels and TV3 were available on Sky Digital, you would today be getting for around £21 (€27) per month something - Irish-produced digital television - that it is otherwise hard to see us getting for several years, and probably at considerably greater cost.
This is how the argument stacks up. Everybody who has a television in the Republic is already obliged to pay £7.04 per month or £84.50 per year for a television licence that allows them receive the free-to-air analogue channels such as RT╔, BBC etc. Another 600,000 or so pay an extra £12 per month or more to subscribe to a cable network which gives them access to these channels plus additional analogue channels and, at some stage in the future, digital channels. Another 200,000 or so pay £14 per month upward for Sky Digital, which gives them access to numerous digital channels via a satellite dish, but not RT╔.
It would follow from the above that RT╔'s channels could be available on Sky Digital tomorrow at a total cost to the viewer of £7.04 plus £14 per month. The alternative Digital Terrestrial Television service planned by the Government is still on the drawing board and the cost, as yet unquantified, is unlikely to be less than £21.
Assuming that digital TV is something we all want as soon as possible, it sounds like there is now a compelling case for the Government to ditch its plans and for RT╔ to hook up with Sky.
The case is all the stronger when you look at the mess the Government DTT plans are in. A new company, called Netco, was to be spun out of RT╔ and sold to commercial interests that would upgrade the network to carry digital signals. RT╔ will retain a 28 per cent stake. The state of play on Netco is unclear. Some sources say that a deal will be done within weeks, while others claim nobody is interested.
One thing is clear. The plan is badly delayed and even if it does go ahead we are unlikely to see its fruit for several years, by which time Sky will be even more firmly embedded in the Irish market.
It is not clear how much Netco will charge subscribers, but it is unlikely to be able to achieve anything like the economies of scale attained by Sky, and hence it is hard to see it competing on price. Faced with this reality, it makes sense for the Government to revisit the logic of proceeding with its digital television plan. The temptation to abandon the current plan in favour of a link with an established satellite broadcaster - and Sky is the only such player in town - must be strong.
The deal would look all the more attractive to the Government if it gets it off the hook on the licence fee issue. RT╔ has made it clear that its digital plans are contingent on a significant increase in the licence fee next year. It can argue that the national broadcaster would be able to exit the transmission business earlier than anticipated and presumably sell the transmission infrastructure.
The case does seem compelling and someone in RT╔ would appear also to be of the same view. Last week, the company sought planning permission for a huge satellite dish at Montrose to allow RT╔ uplink to Sky's satellite. The official line from RT╔ is that hooking up with Sky is not an alternative to Netco, but is an avenue that will be developed in tandem. It would be a mistake to abandon Netco because it would leave RT╔ completely dependent on Sky and jeopardise its ability to fulfil its public service remit, RT╔ argues. Instead, the struggling broadcaster believes it is better served by splitting its limited resources and backing two competing broadcast platforms, even though one is already emerging as the winner.
Fair enough, but you would have to wonder how much of RT╔'s ambivalence towards Sky has to do with antipathy to Rupert Murdoch, the media magnate and controlling shareholder in the satellite channel. Even by going down the Netco route, RT╔ will cross the Rubicon of surrendering control over the distribution of its signal to commercial interests. RT╔ may hold a large stake in Netco but it will not call the shots and there is no reason to believe that owners of the other 72 per cent will be any less commercially orientated than Mr Murdoch's companies. The issues surrounding RT╔'s requirement to provide its signal free to air will have to be dealt with whether it goes with Netco, Sky or another third party.
A real concern is that the satellite television industry in Europe is not regulated in any conventional sense. Sky is based in Luxembourg and not subject to any Irish regulatory authority. At the moment, Sky is competitive with Chorus and NTL. It is also considered to offer as good a service if not a better one. This, however, could change and RT╔'s ability to fulfil its mandate might be jeopardised. Unlike Chorus, NTL and presumably Netco, the Irish telecoms regulator will not set service standards and price caps for Sky.
It is a significant risk but presupposes that Sky could act in an uncommercial fashion - not very likely - and also that it would be anything other than supportive to the Trojan horse that will get it into every household in Ireland.
At the moment, Sky needs RT╔ more than RT╔ needs Sky. That could change quickly if the already stalled Netco project falls apart, and Sky's Irish subscriber base continues to grow. Now might be the time to do a deal - but RT╔ should get out its long spoon.
jmcmanus@irish-times.ie
