Mike Flynn
26th July 2002, 06:19
Cable TV viewers face €18 hike as BBC ups charges
CABLE TV customers could face increased bills following a demand from BBC1 and BBC2 for a 150pc rise in their charges to NTL and Chorus.
In a letter seen by the Irish Independent, the British broadcaster's lawyers said it had decided to push up fees following the entry of Sky into the Irish market.
If the two cable companies agree to the increase it would mean an additional €7.2m would have to be paid by consumers.
This would result in an annual €18 hike per subscriber but any price rise would have to be sanctioned by the telecoms regulator, Etain Doyle.
The BBC letter said when it originally agreed to the fees in 1998 the cable operators were the "only purchasers" in the market.
The document said: "The position has now changed. A competitor to cable operators has entered the market, namely, BSkyB.
"BSkyB has been carrying the BBC1 and BBC2 channels since March 2001 and is paying BBC Worldwide a royalty that more nearly reflects BBC Worldside's view of the true value of the channels."
The letter, from legal representatives of the British stations, said if Irish cable television dropped the UK channels, consumers would switch to Sky.
It added since the BBC would be paid by Sky for each subscriber who swapped cable for satellite services "the equation is now completely different than it was when the present agreement was negotiated in 1998".
The BBC said it would be to their "detriment rather than benefit" to have two purchasers continue to pay at "monopoly-buyer rates". A spokesperson for NTL said the company did not comment on its negotiations. A Chorus spokesman also declined to comment.
It is understood the two cable companies have been angered by the development.
One market source claimed: "Sky is increasing control of content and transmission in Ireland. If it continues in the future it will control programmes like the 'Late Late Show'. Meanwhile, the Irish cable companies are facing an extremely difficult time."
The cable companies have been angered because they undertook to develop the Irish market on the basis that they would operate exclusively in their franchise areas.
However, Sky satellite is competing with the two firms and is not regulated by the Irish Government.
Both NTL and Chorus which is 50pc owned by Independent News & Media have continually maintained Sky has been able to function in an unregulated environment in which the cable groups are rigorously regulated.
The two cable groups also have to pay 3.5pc of their sales to the telecoms regulator. NTL and Chorus have complained to the Government that Sky does not have to pay 21pc VAT to the Irish exchequer, but instead pays 17.5pc to the British exchequer.
It has also emerged that Sky satellite subscribers will see hikes of €4-€7 on their monthly bills from September in part to pay for Irish channels.
The company has justified the increases and said they are to cover rising costs, the introduction of RTE1, Network 2, TV3, TG4, BBC1, and BBC2 as well as new Sky active services due to come on line this year.
David Murphy, Deputy Business Editor
www.unison.ie/irish_independent/stories.php3?ca=9&si=795452&issue_id=7770
CABLE TV customers could face increased bills following a demand from BBC1 and BBC2 for a 150pc rise in their charges to NTL and Chorus.
In a letter seen by the Irish Independent, the British broadcaster's lawyers said it had decided to push up fees following the entry of Sky into the Irish market.
If the two cable companies agree to the increase it would mean an additional €7.2m would have to be paid by consumers.
This would result in an annual €18 hike per subscriber but any price rise would have to be sanctioned by the telecoms regulator, Etain Doyle.
The BBC letter said when it originally agreed to the fees in 1998 the cable operators were the "only purchasers" in the market.
The document said: "The position has now changed. A competitor to cable operators has entered the market, namely, BSkyB.
"BSkyB has been carrying the BBC1 and BBC2 channels since March 2001 and is paying BBC Worldwide a royalty that more nearly reflects BBC Worldside's view of the true value of the channels."
The letter, from legal representatives of the British stations, said if Irish cable television dropped the UK channels, consumers would switch to Sky.
It added since the BBC would be paid by Sky for each subscriber who swapped cable for satellite services "the equation is now completely different than it was when the present agreement was negotiated in 1998".
The BBC said it would be to their "detriment rather than benefit" to have two purchasers continue to pay at "monopoly-buyer rates". A spokesperson for NTL said the company did not comment on its negotiations. A Chorus spokesman also declined to comment.
It is understood the two cable companies have been angered by the development.
One market source claimed: "Sky is increasing control of content and transmission in Ireland. If it continues in the future it will control programmes like the 'Late Late Show'. Meanwhile, the Irish cable companies are facing an extremely difficult time."
The cable companies have been angered because they undertook to develop the Irish market on the basis that they would operate exclusively in their franchise areas.
However, Sky satellite is competing with the two firms and is not regulated by the Irish Government.
Both NTL and Chorus which is 50pc owned by Independent News & Media have continually maintained Sky has been able to function in an unregulated environment in which the cable groups are rigorously regulated.
The two cable groups also have to pay 3.5pc of their sales to the telecoms regulator. NTL and Chorus have complained to the Government that Sky does not have to pay 21pc VAT to the Irish exchequer, but instead pays 17.5pc to the British exchequer.
It has also emerged that Sky satellite subscribers will see hikes of €4-€7 on their monthly bills from September in part to pay for Irish channels.
The company has justified the increases and said they are to cover rising costs, the introduction of RTE1, Network 2, TV3, TG4, BBC1, and BBC2 as well as new Sky active services due to come on line this year.
David Murphy, Deputy Business Editor
www.unison.ie/irish_independent/stories.php3?ca=9&si=795452&issue_id=7770