The Minister for Communications, Mr Dempsey, has asked a team of consultants to carry out the first review of the TV licence fee and its impact on private sector broadcasters and the advertising market.

The consultants' review will be completed next month, when the Minister will be considering whether to increase the fee.

"While the review will examine the impact of the licence fee in general on other broadcasters it will primarily focus on what impact, if any, it has on the radio and television advertising markets," said Mr Dempsey last night. He did not say whether the new review would have an impact on his decision. The commissioning of the report is a victory for private broadcasters like TV3 which have long demanded a study into RTÉ's presence in the advertising market.

They have accused the State-owned broadcaster of abusing its dominant position and engaging in below-cost selling.

However, RTÉ claims that such allegations were investigated before by the Competition Authority and no action was taken.

A senior official at the authority concluded earlier this year that RTÉ had no reason to discount its advertising rates as this would have worsened its financial position.

Under a formula established by Mr Dempsey's predecessor, Mr Dermot Ahern, the Government is obliged to increase the fee in line with inflation unless RTÉ fails to deliver on promises made in what is called the "statement of commitments". This document includes various promises to deliver more Irish programming and a wider range of services.

Mr Dempsey has so far declined to give his views on whether RTÉ has delivered on its commitments. Mr Ahern had a somewhat fractious relationship with the station, accusing it on one occasion of not doing enough to reduce staff numbers.

Mr Dempsey said the new review, originally suggested during Mr Ahern's term, would be carried out by the London-based consultancy Europe Economics along with Irish firm Curtin & Dorgan and PricewaterhouseCoopers.

Europe Economics is a specialist applied economics consultancy. The firm provides consultancy services in areas such as economic regulation, competition policy and the application of economics to public policy and business issues.

Their clients include government departments, regulators, international bodies, law firms and private-sector companies and associations.

Curtin & Dorgan has carried out consultancy work on the forestry and transport sectors in the Republic.