The Broadcasting Authority of Ireland (BAI) has today (Wednesday 16th June) published draft broadcasting rules that, if adopted, will increase the amount of advertising permissible on independent commercial television in Ireland.  The Draft BAI Rules on Advertising and Teleshopping (Daily and Hourly Limits) propose to revise the maximum amount of advertising permitted per hour from the current maximum of 10-minutes up to a maximum of 12-minutes per hour. In addition, the maximum amount of advertising permitted per day would increase from 15% of daily broadcasting time up to 20%. If adopted, the rules will apply only to independent commercial television channels licensed in the Republic of Ireland and targeting Irish audiences e.g. TV3, Setanta Ireland, City Channel. The rules do not impact on the amount of advertising permissible on public service television e.g. RTÉ 1 and TG4, because limits on advertising per hour and per day for these services are set by the Minister for Communications, Energy and Natural Resources.

The BAI is now providing members of the public and interested groups with the opportunity to submit their views on the draft Rules (including this proposed increase in per hour and per day advertising limits). A copy of the draft Rules can be downloaded from the BAI’s website or obtained by phoning the BAI’s offices (01 644 1200). Written submissions can be posted to the BAI or emailed to straynor@bai.ie. All responses should reach the BAI on or before 5pm, Friday 9th July 2010.  
 
Commenting on the draft rules, BAI Chief Executive Michael O’ Keeffe said, “The BAI’s proposal to increase the permitted daily and hourly advertising limits is informed by an awareness of the need to ensure that the independent commercial television sector in Ireland competes effectively with competitors in the wider European commercial television sector (including UK channels targeting Irish audiences). The BAI is also of the view that the proposed increases in advertising limits will help to protect and stimulate Irish employment and sustain Irish programme content in a context where the television sector has suffered a significant decline in commercial revenue.”
It is anticipated that all responses to the consultation on the draft rules will be considered by the BAI at their meeting in July and that the finalised BAI Rules on Advertising and Teleshopping (Daily and Hourly Limits) will be introduced in August 2010.

The Regional Newspapers and Publishers Association of Ireland represents 44 regional weekly/bi-weekly titles of record in Ireland, with weekly sales in the region of 500,000 copies and a readership of 1.4 million. Gross annual turnover equates to €138m and direct employment of approximately 800 people. It is a core component of the Irish media landscape, with a particular significance for, and importance to, local and regional communities and their economic and social infrastructure.

It is unarguable that the media advertising market in Ireland is essentially an integrated one, and that changes in any sector of that market will inevitably affect some or all of the other sectors involved. This implies that policy decisions taken in any one sector should be taken with regard to the possible consequences of such a change for other sectors, based firmly on the best available evidence, and on the principle that uncompetitive distortions should not encumber the market-place.

We regard the Consultation Document issued on behalf of the BAI as seriously deficient in terms of (a) its procedural basis, (b) its evidential basis, and (c) its rationale for the proposed change, to such a degree that we believe that any policy decisions taken on the basis of the facts and arguments advanced thus far would be extremely premature and would amount to unfair procedure.

The consultation document states unambiguously that the BAI has already decided to support an increase in the amount of advertising permitted. This declaration calls the consultation process completely into question, and reinforces our belief that the present "consultation process" is fundamentally flawed and open to serious challenge. The RNPAI is also aware that discussions are currently taking place in the commercial radio sector to pursue a similar increase in permitted advertising volumes.

In the light of this, and in relation to (a) in particular, we feel it is incumbent on the BAI to review this and other responses to these proposals in the light of any observations that may be made on them by potential beneficiaries of the mooted policy change, and to give the RNPAI and other respondents the opportunity to comment on any proposals made by potential beneficiaries, before a final decision on the matter is taken by the BAI.

We reserve the right, as the makers of this submission under Section 44 of the 2009 Broadcasting Act, to take further action in this regard if necessary in order to defend our rights, as interested parties, to natural justice and fair procedures.

Notwithstanding the above, our views on the BAI’s proposal to amend the rules on advertising and teleshopping (daily & hourly limits) are as follows:

What is your view of the proposal contained in the draft rules to increase the amount of advertising permitted per hour on commercial television broadcasters from the current maximum amount of 10 minutes per hour up to 12 minutes per hour?

What is your view of the proposal contained in the draft rules to increase the amount of advertising permitted per day on commercial television broadcasters from the current maximum of 15% per day up to 20% per day.

These two questions are effectively two sides of the same coin, although it is worth noting – and requires clarification – that there is no explanation offered for the fact that the proposed increase in hourly minutage is 20%, while the proposed increase in the amount of advertising permitted on a daily basis is of the order of 33 1/3%. This apparent sleight-of-hand, which magnifies the effect of the proposed changes, requires an explanation and justification, if such is available.

There is no indication in the document of the source of this proposal as adopted by the BAI. The source of the proposal should be identified, and the minutes of the meeting at which such a proposal was adopted, together with copies of all documentation supporting such a proposal, should be made available on request to all interested parties for their observations before any decision is taken.

The hourly limit set out in Article 18(1) of the AVMS Directive refers to a maximum of 20% within a given clock hour. A maximum is not a requirement, but an option, and permissive legislation is not prescriptive in relation to any new limit that may be adopted between the present figure and the legal maximum, but requires justification by evidence and argument.

The BAI is required, under the same article, to consider whether any proposed limit properly protects the interests of consumers as television viewers. This consideration is entirely absent from the rationale adopted in the Consultation Document, which refers only to competition issues, and indeed to an extremely short sighted and sectorally limited view of such issues. This is a major deficiency based on a partial, inadequate, and highly arguable interpretation of the Directive concerned.

Do you have any views regarding the BAI’s rationale for increasing the maximum amount of advertising to be permitted per hour and per day?

The BAI’s rationale can be fairly stated as being based on (a) the competitive environment within which the independent commercial television sector operates in Ireland, given that Irish television channels are competing with UK channels to sell advertising to Irish businesses, and (b) the belief that the proposed increases in limits will help to protect and stimulate Irish employment and sustain Irish programme content. These can best be dealt with separately.

(a) The competitive environment

The argument that the Irish limit should be the same as the UK limit is not supported by any evidence that – for instance – Irish commercial television channels have been turning away advertisers because of the shortage of advertising minutage available to them. Such evidence is absolutely necessary to support any argument that the present regime puts Irish commercial channels at a competitive disadvantage. In the absence of such evidence, the fact that the time regime in the UK is different has no evidential value whatsoever, and it cannot be argued that increasing the minutage would enhance the competitiveness of Irish commercial television. Before any such decision could be taken, there would need to be evidence that the rates being charged by commercial television in Ireland were so competitive that there is surplus demand for advertising minutage that cannot be met within the existing time constraints. The proposal does not indicate that there is any such evidence, and indeed we would not be surprised if the existing minutage allowed is under-subscribed, or is fully subscribed only on the basis of free or bonus advertisements provided to advertisers as an incentive for their above-the-line spend. Such free or bonus advertisements cannot legitimately be included in any rationale for an increase in advertising minutage. They are also profoundly anti-competitive in that they can be offered at will to fill any amount of advertising minutage (including, any extension of the advertising minutage that might be approved by the BAI) without incurring additional production costs of the kind incurred by newspapers, where any increased allocation of space to advertising involves irreducible additional production costs. In this context, the proposed extension of advertising minutage would further intensify the existing anti-competitive distortions in the media advertising market in Ireland, and would lead a race to the bottom in rate cards that would make Irish media generally, both broadcast and print, even more vulnerable to loss and closure than they are at present.

(b) The protection and stimulation of Irish employment and Irish programme content

The increase in advertising minutage would reduce the amount of non-advertising content on Irish commercial television channels. It is difficult – to put it mildly – to see how this can be advanced as an argument for sustaining Irish programme content. It would also strengthen the more commercially successful of these channels vis-a-vis their indigenous competitors, leading to an enhanced risk of failures, closures and job losses in the stations so affected. If adopted, it is also highly likely that the increase in advertising minutage might so seriously affect other media sectors and their viability that any job protection – let alone the more problematic job increases – in the commercial television sector would be balanced or exceeded by losses in other sectors affected, so that the absence of any net employment gain would be accompanied inevitably by a loss of media diversity and critical media infrastructure. In any event, the proposal does not contain a shred of evidence, other than an assertion, to support its argument that such a change would have a beneficial effect on employment within this sector of the media industry.

Are there any other comments you would like to make about this consultation and/or the draft rules?

The RNPAI is of the view that, in addition to the procedural changes advocated above in connection with this proposal the BAI should as a matter of urgency take effective action to explore and police anti-competitive practices within the broadcast industry in fields such as sponsorship and product placement with a view to ensuring that national legislation is not being breached in these areas and that appropriate enforcement mechanisms are in place.

The RNPAI is also concerned that the anti-competitive advantages which are sought to be conferred on the commercial broadcasting sector by this proposal may, in turn, be extended to the public service broadcasting sector, with further deleterious effects on Ireland’s media infrastructure unbalanced by any gains in employment or in the quality of media available to consumers. In this context, the ‘demonstration effect’ of such a unilateral, inadequately researched and superficial proposal would, in the long term, be even more damaging to the prospect of creating a level playing field for indigenous Irish media as a whole, in competition with each other and with extra-national media industries.

The industry is working hard to sustain itself, to maintain jobs and continue its contribution to the Irish economy. It has not sought any subsidies or favours: it simply requests the opportunity to compete in a market that is fair and balanced. The industry already contends with unfair competition from the public service broadcaster and any implementation of this proposal - which will unfairly favour the independent broadcasters - will further threaten the Irish newspaper industry’s ability to sustain itself.