Battle has been won but war between TV stations is not over

Analysis: Things are looking up for senior management at RTÉ these days, writes Emmet Oliver.

There is a supportive Minister installed at the Department of Communications, the company's traditionally precarious finances are on the mend and, within the next fortnight, a licence fee increase is a strong possibility.

Added to this, a key report on how the station uses its licence fee revenue has come out in favour of the station and dealt a severe blow to rival TV3.

Since its inception over five years ago, TV3 (owned by ITV, Canwest and some private Irish investors) has alleged that RTÉ is abusing its dominant position by using licence fee revenue to suppress advertising rates in order to keep the competition under constant revenue pressure.

The chief executive of TV3, Canadian Mr Rick Hetherington, has carried the fight to RTÉ on this point. He has spoken several times about how the dominance of RTÉ is continuing to put off potential new entrants to the Irish television market.

The latest report, commissioned by Minister Noel Dempsey, does not really tackle this broader issue of getting competition into the market, but it unequivocally clears RTÉ of the more specific charge of abusing its dominant position.

The report points out that holding a dominant position is not wrong per se, the problem starts when a company abuses this position. The report does not find evidence of this.

On the question of driving down advertising rates it says this is highly unlikely. It points out that advertising rates are set on the basis of cost per thousand (CPT). In other words, rates are set based on audience.

"The calculation is independently audited, the result is made freely available within the industry, and the rate calculated for one month becomes the rate set for the next," the report states.

The other key point the report relies on is what motivation would RTÉ have for driving its advertising rates down?

They also suggest that RTÉ, despite its overwhelming presence in the Irish market, does face constraints on its behaviour which make acting anti-competitively very difficult. Among these are the power and scale of the advertising agencies RTÉ is dealing with.

Despite these points, the latest report is unlikely to end the feud between the two stations. An EU Commission State-aid investigation is very advanced, with TV3 arguing that RTÉ, and potentially TG4, are being funded in ways that contravene EU law.