BBC May Lose Sole Right To License Fee

[Teddy Bear]

I very much hope that this possibility will become the actuality. If so it will spell the end of the BBC as we know it. I'll keep my fingers crossed

Note Mark Thompson's response at the end: "It is my job to defend the BBC's interests. I believe there are very, very strong arguments against top slicing the licence fee because you break the clarity of the link with the public."

In other words, 'it's harder to rip them off'.

BBC fears for funding in digital future
Owen Gibson, media correspondent The Guardian, Wednesday December 19 2007

The traditional link between the BBC and the licence fee could be broken as a result of wide-ranging reforms being considered by the media regulator, Ofcom, the Guardian has learned. One option under review could lead to the licence fee being sliced up so that money could be channelled to other organisations to spend on "public service" web and television ventures.

Though the BBC would retain the lion's share of the levy, any reduction would have profound implications for the corporation.

Ofcom believes it has to consider a range of options to avert a crisis in public service broadcasting at a time of radical change. Insiders believe a new means of allocating public money via a newly created body could foster innovation, but would prefer to leave the government to decide how to finance it.

The regulator, while committed to maintaining a strong BBC, is also keen to find new ways of delivering public service content to a generation growing up with mobile phones, broadband internet and a vast array of media choices.

The idea is among several being considered by Ofcom as part of a review, which will feed into a government review of the sector and new legislation. Any possible diminution of the licence fee would cause ructions between ministers and the BBC at a time the corporation says it is struggling to meet its stated aims after a below-inflation licence fee deal this year.

Reigniting the debate over the BBC's future will also put director general Mark Thompson under further pressure as he attempts to draw a line under a turbulent year dominated by a series of crises.

However, there is a growing consensus at Ofcom and in Whitehall that the public service broadcasting system that has served Britain well for 80 years is close to collapse due to the explosion in digital choice and changing media consumption habits, particularly among the young. After the country switches to digital TV between 2008 and 2012, Ofcom will have little oversight of ITV, while Channel 4 is also coming under financial pressure and facing questions over its future.

An earlier proposal for a "public service publisher" was derided by critics but its supporters, including chief executive Ed Richards, felt it served a useful purpose in broadening the debate about the future. They believe a revised version of the idea, funded by public cash, should be considered as a key plank of its proposals.

A spokesman for the regulator said the review was in its early stages and it had not yet reached any firm conclusions: "In its review of public service broadcasting, Ofcom remains entirely flexible concerning any future funding arrangements for this important component of British broadcasting."

A new body could consider requests for both one-off projects and ongoing funding from existing media groups, as well as other public bodies such as museums and art galleries, plus new entrants such as community TV channels.

But Whitehall sources said it was unlikely the Treasury would countenance funding it from general taxation, making "top slicing" the licence fee the most likely option once the BBC's current deal runs out in 2013.

Thompson recently told the House of Lords communications select committee he was opposed to the idea: "It is my job to defend the BBC's interests. I believe there are very, very strong arguments against top slicing the licence fee because you break the clarity of the link with the public."

[Teddy Bear]

It's not often that anyone in government says anything really intelligent and meaningful, and is not for anything other than pure spin. Hopefully this won't turn out to be of the spin variety, and the thoughts contained in the following paragraph by Culture Secretary James Purnell will manifest into action: He said: “Let’s put the question starkly: do we think it’s sustainable for every penny of the licence fee to go to a single organisation in an industry which now has very many providers rather than just a handful? Would some form of contestability for licence-fee funding help to sustain quality, innovation and efficiency?”

I can think of many more reasons why BBC should lose its sole right to this tax, but that will do for starters.

BBC is told it may have to share licence fee with other channels
(Gill Allen/The Times)
A shared licence fee could not come into effect until 2013

Adam Sherwin, Media Correspondent
The BBC could be forced to share the licence fee with rival broadcasters after the Government signalled that the corporation’s exclusive right to public funding would come to an end.

James Purnell, the Culture Secretary, suggested that the £3.4 billion licence fee could be carved up in future between the BBC and commercial broadcasters committed to making quality, public-service programmes.

Sir Michael Lyons, chairman of the BBC Trust, said that a “contested” licence fee that reduced the BBC’s budget could threaten its ability to deliver public-service programmes and prompt a viewers’ revolt.

Mr Purnell made his announcement at a conference on media regulation at the University of Oxford. He said that the Government was prepared to be bold in establishing a framework for the digital broadcasting era.

He said: “Let’s put the question starkly: do we think it’s sustainable for every penny of the licence fee to go to a single organisation in an industry which now has very many providers rather than just a handful? Would some form of contestability for licence-fee funding help to sustain quality, innovation and efficiency?”

The status quo did not appear to be an option. Referring to a comment once made by Tony Blair, Mr Purnell said: “It was once said that we are at our best when we are at our boldest. The flipside for broadcasting is: people are at their worst when they are at their most conservative. The greatest unwitting enemies of public-service broadcasting are those who say we should leave it be. I’m afraid the world doesn’t allow for that.”

Channel 4 could prove one of the beneficiaries of a licence fee that is “top-sliced”. The channel has argued that it needs public funding to maintain its public service output in a multi-channel, competitive environment. Andy Duncan, the channel’s chief executive, said: “Some form of new funding underpinning needs to be provided for Channel 4 so that we can renew our public purposes. We can’t spend several years debating the issues.”

Sources close to Mr Purnell say that he added the “top-slicing” section to his speech after Sir Michael had appeared to rule out any radical change when he spoke to the conference.

Criticising the concept of a shared licence fee, Sir Michael said: “Currently, the licence fee payer knows exactly where the money is going and who to hold to account. Should we not think very carefully indeed before diluting or blurring the clarity of the current arrangement?”

He added that viewers might not be happy to pay an additional 10 per cent on their licence fee to fund programmes on other channels that they may not wish to watch. He said: “The number of people who wish to pay more tax is a very small community.”

A shared licence fee could not come into effect until 2013, when the current settlement comes to an end. Mr Purnell said the Government would conduct a review into how public-service broadcasting could be funded outside the BBC after an Ofcom investigation. He rejected one proposal to create a “arts council of the air”, which could distribute licence fee money to producers who had worthy projects.

Mr Purnell said: “I think the risk that posh programmes disappear into a space all of their own, rarely to be visited by those without a prior grounding in the subject matter, is very real.”

Ofcom has suggested that a £300 million fund, known as the Public Service Publisher, could distribute funds for programming, such as arts and current affairs, threatened by commercial pressures.

Mark Thompson, the Director-General of the BBC, this week called for more government funding to support public-service programming, but set his face against the licence fee being carved up by a central body.

Sources at the Department for Culture, Media and Sport said that the details of a contested licence fee had not been spelt out in discussions, but the minister had deliberately placed the issue on the table. “The status quo is not an option,” said a departmental source.