RTE criticised for Saorview broadcast fees

5. RTÉ multiplex capacity and cost

The BAI met with RTÉ in January, to establish the level of costs that
applicants are likely to have to pay for carriage on the RTÉ multiplexes and also to determine if there is sufficient capacity for the carriage of services additional to those already being carried or planned to be carried on the RTÉ multiplexes.

At the meeting, RTÉ agreed with the proposition that additional content would make the “Saorview” DTT platform a more attractive consumer offering. However, they indicated that the first DTT multiplex was full and that any new content would require the establishment of a second DTT multiplex. Costs would be calculated on a multiplex basis rather than total platform. This would mean that the cost associated with each multiplex would be borne by the content providers on each multiplex. Different costs would arise depending on which multiplex the content was on and also the number of channels that are carried on the multiplex. Hence if only one television channel was on the second multiplex, the entire operating costs of the second multiplex (€3.5m to €5m per annum) would be borne by the single content provider. Whereas, if the same content provider was on the first multiplex, the annual costs would be shared across all operators on the first multiplex and be in the region of €500k per annum for a standard definition television channel.

In February 2011, the Minister consented to certain new RTÉ channels being carried on the PSB multiplexes. This consent specified that RTÉ establish a second DTT Multiplex and that the RTÉ Two High Definition (HD) channel should be carried on this second multiplex with RTÉ jr/RTÉ plus moving to the second multiplex by the 1st September 2011

The BAI Executive was advised by RTÉNL on Tuesday 12th April that the annual transmission costs for content providers on the RTÉ DTT Multiplexes would now be calculated on a platform basis. The total DTT platform cost of between €8 and €11m annually would be divided between the content providers on the platform and not on a per multiplex basis. Costs would be calculated based on the actual data capacity used by each content provider divided by the total data capacity in use on the two multiplexes. The costs would increase or decrease annually based on the total number of content providers on the platform. In effect, this would mean that RTÉNL would receive a guaranteed income each year, while any spare or reserved capacity would be paid for by all operators on the platform. A content provider therefore would have a variable and unpredictable annual transmission cost for a standard definition channel of between circa €600K and €1m per annum depending on the total number of content providers on the platform and whether analogue television is still on air. Similarly for a HD channel, the annual DTT transmission costs would be variable and could range from circa €1.2m to €2.4m per annum. For radio services carried on DTT, the annual costs again would be variable year on year and range from €50k to €100k per annum. All of these costs have been calculated by the BAI Executive using a spreadsheet calculation tool provided by RTÉNL and using different scenarios of platform usage.

In terms of multiplex capacity, in the event that the main four television services migrate to HD, then capacity exists for between four and five further Standard Definition (SD) television services and some radio services in addition to those sanctioned by the Minister to date. If TV3 and TG4 decide to remain transmitting in SD, then capacity exists for up to 8 additional standard definition television services on the RTÉ multiplexes

The Oireachtas channel may not require the full data capacity of other channels due to the nature of the service. A lower data capacity of circa 1.5Mbps would appear appropriate. This is in line with capacity used for parliamentary channels in other administrations.

The data capacity used on the multiplex for video services should be reviews closer to analogue switch off (ASO) to see if any changes are required to data rates due to improvement in coding technologies. This could accommodate extra channels or facilitate further digital teletext, audio or assistive services. The only digital teletext service on the multiplexes is provided by RTÉ and it is unclear if analogue teletext is suitable post ASO in
an all digital environment. The interest by other operators should be reviewed closer to ASO in light of any data capacity requirement changes as outlines above.

BAI conclusion and recommendation

On a cost basis, the variable and uncertain cost of carriage on the RTÉ multiplexes is likely to be of serious concern to content providers and is very challenging in developing a viable business plan. It is the Authority‟s view that the RTÉ approach to cost will make the DTT proposition unsustainable for most if not all service providers. It is therefore likely that the only services carried on the RTÈ DTT multiplex will be those provided by RTÉ.

Section 130 of the Act gives power to the Minister to designate payments to be made by providers of services on the multiplex. Such payments are to be determined following consultation with ComReg, RTÉ and the intended provider of the service. It is the view of the Authority that any directions issued to RTÉ in respect of payments should have regard to the concerns expressed in this report.

In terms of multiplex capacity, it would be possible to carry between four and eight additional SD television channels and some radio services. If capacity is reserved, for an Oireachtas and Film Channel, then the number of potential additional television channels reduces to between three and six. In general terms, there would appear to be sufficient capacity on Multiplex 1 to carry the services currently available during the test period, together with the additional RTÉ services which were recently approved, following the sectoral impact assessment and public value review.

With regard to the proposed services emerging from the expressions of interest process, these are not likely to be in a position to commence operations until near to or beyond analogue switch off in October 2012. In these circumstances, the question of the requirement to introduce the second RTÉ multiplex in 2011 should be considered further by the Minister.

http://www.bai.ie/wordpress/wp-content/uploads/20110815_BAIDTTEOI_FINAL.pdf

Given the launch of the Irish DTT platform, Saorview, on the 26th May 2011, subsequent to the BAI‟s submission to the Minister, and given further developments regarding costs of carriage on the platform, some of the information in this report may not be current at the date of publication (August 2011). In addition, some submissions were made to the BAI on a confidential basis and the report, therefore, reflects the provision of information on this basis.

Elmo wrote: »

Prices below (2012)

Radio from 60000 to 92000
SD TV from 748000

Costs reduce as more channels are added to the service and as channels move from SD to HD.