The campaign by RTE to win an increase of £50 in the licence fee had won the backing of many Government back-bench TDs and senators, but yesterday the Minister for Arts, Heritage, Gaeltacht and the Islands, Ms de Valera, allowed only £14.50. RTE said yesterday it was disappointed by her decision.
It claimed its application for a £50 increase had been properly costed, but consultants retained by the Minister disagreed. Ms de Valera said she fully supported a strong public service broadcasting service but "this does not mean that nothing should change".
In the current financial year, without an increase, RTE's licence fee revenue would have been more than £67 million. The increase approved, which takes effect on September 1st, will add an estimated £6.1 million this year, equivalent to almost £15 million in a full year.
Ms de Valera said it was not unreasonable that licence-payers be reassured that the fee revenue was well spent.
The Independent Broadcasters of Ireland, which includes TV3, said a licence fee increase of more than 20 per cent was disappointing and could have detrimental implications for the independent broadcasting sector.
A spokesman for TV3 told The Irish Times the increase in the licence fee should not have been sanctioned because there was insufficient transparency in how RTE used its licence fee income.
"We are fearful of a distortion in the market," the spokesman added. He did not expect job losses in TV3 as a result, "but the decision does not encourage investment in the private sector."
One of TV3's concerns is that income from the licence fee could be used to make competitive bids for programmes already on TV3.
The Fine Gael spokesman on broadcasting, Mr Dinny McGinley, said a 20 per cent increase showed the Government had no commitment to public sector broadcasting. It amounted to no more than indexation to the consumer price index since 1996, the last time an increase was sanctioned.
In a statement, Mr McGinley said: "RTE is already in a perilous state. This year it has seen its advertising income drop, ad ding to the deficit which has been mounting since 1999. At this point RTE must already have lost more than £50 million. Basically, RTE is surviving on whatever is left over from the sale of Cablelink and whatever it can get by selling the transmission network."
The Labour spokesman on broadcasting, Mr Brian O'Shea, said the increase could have implications for programming and jobs. "The handling of this application by Minister de Valera has been unsatisfactory and inept. She has dragged her feet and put off making a decision until the Dail is about to go into recess and the Tipperary South by-election was out of the way."
Ms de Valera said her consultants could make no recommendations based on RTE's original application. It was not until further information was supplied last month that she could begin to finalise her proposal.
Film Makers Ireland, an association representing independent TV and film companies, said last night it was disappointed at the size of the increase.