The Commission for Communications Regulation (ComReg) has started legal proceedings against Chorus over its refusal to pay the regulator a levy of 3.5pc of its annual turnover. The cable operator, which hasn’t paid the levy since January, has described it as “unfair” and “excessive”.
“There is a lack of equity between the way we are treated and the way our main competitor in the Irish market – BSkyB – is treated,” says Willie Fagan, director of regulatory affairs at Chorus. “In other words, we are at a commercial disadvantage.”
BSkyB has avoided paying any levy to ComReg because it broadcasts out of the UK and does not currently fall within ComReg’s regulatory control.
Fagan would not comment on whether Chorus would pay its outstanding levies to ComReg or how much it owes the regulator. However, it is understood that Chorus is considering a counter-claim against the regulator in regard to the levy. “We are considering all our options at the moment,” Fagan added.
It is understood that NTL has also expressed serious concerns to ComReg about the levy fee, although it has continued to pay the 3.5pc charge. Under regulations in place since 1999, ComReg levies a licence fee of 3.5pc from cable firms to cover the cost of regulating the sector.
It is understood that both Irish cable firms have asked ComReg to provide a detailed breakdown of its budget for regulating the sector to determine where the money has been spent and, according to Fagan, ComReg has refused to provide this breakdown.
Last week, ComReg published proposed new levy charges for all communication operators, which includes the cessation of the 3.5pc existing levy charge and the introduction of €0.50 per subscriber connected levy charge for the Irish cable companies. Under the proposed new regime, BSkyB still avoids any levy.
Since the levy was introduced in 1999, it is estimated that the Chorus and NTL have paid nearly €20m. It remains unclear whether NTL and Chorus will accept a new levy regime, however, it is understood that they have until tomorrow to make submissions regarding the new regime.
“The paper as published [on the new levy regime] does not resolve the issue, insofar as it makes the fee optional for our competitor and compulsory for us. That would hardly be a resolution,” Fagan insisted.
Meanwhile, Dermot Ahern TD, Minister for Communications, Marine and Natural Resources, is to press at EU level for new powers to regulate satellite broadcasters who provide television services specifically targeted at Irish viewers, such as BSkyB.
Under proposals put forward by the Minister, satellite broadcasters currently not subject to regulation in countries outside their broadcasting headquarters would come under the jurisdiction of member states into which they provide targeted television channels that are meant for reception only in that member state.
The Irish proposals are contained in its submission to the EU Commission on the Review of the Television Without Frontiers Directive, which is currently under way. Minister Ahern has pledged to press for a fundamental review of the directive during Ireland’s Presidency of the EU, which commences in January.
By Lisa Deeney