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Wednesday 21 August 2019

TV licence fee to be replaced by charge on all households

  • Current licence fee to be scrapped
  • Homes without traditional TVs but that have a laptop, a tablet or a smartphone will be charged
  • 'Future-proof the funding model' - Richard Bruton
  • Government privately fears backlash over reforms, source says
Reforms: Richard Bruton. Photo: Gareth Chaney Collins
Reforms: Richard Bruton. Photo: Gareth Chaney Collins

Adrian Weckler and Gabija Gataveckaite

The Government is to scrap the current licence fee and replace it with a charge that will hit virtually every Irish home, regardless of whether a television set is present.

But even though the “device-independent broadcasting charge” looks set to become a household charge in all but name, ministers insist that it cannot be called as such. The new charge, the price of which has not yet been set, is intended to capture the one in 10 Irish homes that legally avoid the licence fee because they do not have a traditional television.

It will mean that anyone with a laptop, a tablet or a smartphone at home will be liable to pay. The move is likely to catch thousands of third-level students and young couples for the first time, as many shun traditional TVs in their apartments or flats in favour of streaming services such as Netflix and Now TV on computers and phones.

The measures are contained in the Government’s new Broadcasting Bill, which also includes plans to crack down on the 12pc of householders who currently evade the €160 annual licence fee.

The Government is to issue a new tender for the detection and collection of the current licence fee from such evaders.

Once the five-year contract tender is up, the State will then switch to the new household charge system.

"It is clear that due to the nature of technological change and the movement towards digital devices, the design of the TV licence fee will have to change," said Communications Minister Richard Bruton. "This is a fundamental reform that will take time to develop, but it will future-proof the funding model, taking account of changes in technology and in how content is now consumed."

Speaking on this RTÉ’s Morning Ireland today, Minister Bruton said that it is not currently known what devices will be included in the charge as technology quickly changes and develops.

"While we know there are certain devices being used, we don’t know what devices will appear on the scene in the coming years and we want to make sure however we devise legislation that that base is secure and doesn’t become eroded.

"One of the problems we have at the present is a high level of evasion and we want to set up a new system that is not subject to erosion in the same way," he said.

When pressed that RTÉ is short of funding now, the minister said that the Government has been advised to wait.

"I think we put in place a working group which had all the key players, they clearly have recommended that the complexity of implementing a broadcasting charge would not be robust at this point, it needs time.

"While I can understand RTÉ would like to see something come in very quickly, the advice to government is that we need time to get it right," he said.

Privately, Government figures are fearful of the backlash to what may be interpreted as a new 'household charge'.

"We are not necessarily talking about a new household charge," a Government source said. "We need to make sure public broadcasting is funded in a fair and sustainable way. Otherwise public broadcasting is being sacrificed at the expense of the internet giants."

Under current law, only homes with dedicated televisions must pay the annual €160 licence fee.

Pensioners with existing exemptions will not be affected by the new rule, however.

"Most people pay their TV licence fee," said Mr Bruton. "However, we still see approximately 12pc evasion which we need to address. By tendering for a contract of five years, this will allow the awarded body the chance to invest in a robust collection service."

The new measures may also tweak the funding model within the licence fee structure, with a review set to take place of the proportion of the TV licence revenue allocated to the independent broadcasting sector. This review may also require RTÉ, which received €189m from the licence fee proceeds last year, to spend more on commissioning content from other Irish television companies.

"Public service broadcasting is more important now than ever," said Mr Bruton. "Independent, objective reporting of domestic and international affairs is crucial. However, we must recognise that the landscape in which broadcasters operate is undergoing a transformation and that this gives rise to new challenges."

Opposition parties have fielded their own proposals as to how public sector broadcasting should be funded.

Last week, Fianna Fáil's Communications spokesman Timmy Dooley told this newspaper that his party in government would introduce a tax on digital advertising on Facebook and Google. This, he said, would be diverted into a new fund designed to financially support all "mainstream journalism", whether in broadcast or in print.

It might also allow for a reduction of the licence fee, he claimed. The idea behind this is to rebalance the destructive shift in advertising that has occurred from indigenous traditional media to these online tech giants.

However, Government sources were keen to emphasise that any change in how the licence fee is collected will be gradual.

"The TV licence fee will be collected in the usual way for the next five years," said a Government spokesman. "The new approach will take time to develop but in the long-term it would be unfair to rely on TV ownership to fund public broadcasting when technology is changing so rapidly."

An Post has raised concerns about the announcement and said that clarity is needed about the proposals.

"The Television Licence contract is an important part of An Post’s business strategically, a key facet of our public service role and an essential income stream for our Postmasters and the national Post Office network.

"An Post has long argued that the contract needs to be longer term than the current annual renewal to allow for investment into databases and IT to facilitate more efficient collection.

"In 2018 An Post achieved TV Licence sales revenue of €166m on behalf of the Department of Communications, Climate Action and Environment, with the sale of 1,038,986 TV Licences. This represents a 1per cent increase on the prior year and an additional €2 million revenue for the Department," a spokeswoman said in a statement.

"The 2018 evasion rate was 12.83ps, down from 14.1pc in the prior year.

"This 1.27pc improvement demonstrates An Post’s commitment and focus in growing licence sales in a very challenging market rife with difficult conditions, many of which are outside the control of An Post. Licence fee collection is a difficult and complex task as the TV Licence is a voluntary tax.

"Achieving a compliance rate of 87pc under current conditions is a credit to An Post’s Licence collection team across the country.

"An Post remains committed to delivering an effective and efficient TV Licencing system for Ireland and to providing great customer service throughout. We await the detail of the planned tender which is due later this year."

Irish Independent

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