Britain Throws a Lifeline to BBC by Keeping Its Fee

International Herald Tribune – March 16, 2006

Sarah Lyall – N.Y. Times

 

 

LONDON The last few years have been rough for British Broadcasting Corp. It lost a bitter fight with the government, and suffered the resignation of its top two officials in 2004 over its news coverage of British intelligence leading to the Iraq war. It has reorganized itself up and down, begun to lay off thousands of workers and worried endlessly about its viability at a time when the broadcasting landscape is changing at a dizzying rate.

 

But this week the government threw a lifeline to the Beeb, as it is familiarly called, pledging that it would continue to be funded by a license fee - an annual charge levied on all British owners of televisions - at least through the next decade. Presenting a so-called white paper setting out the government's plans for the BBC, the culture secretary, Tess Jowell, said Tuesday that "we are optimists about the BBC" but warned that "it cannot take its position for granted."

 

Jowell also said that the BBC should take care not to inflict "an overdose of worthiness" on viewers.

 

"The BBC should continue to take fun seriously, ingraining entertainment into all its services," Jowell told the House of Commons.

 

In a major reorganization of the 84- year-old organization, the government also said that it would scrap the BBC board of governors, who serve as the broadcaster's champions and regulators. The board's responsibilities are to be split between an executive board that will have responsibility for running the corporation and a separate group, known as the BBC Trust, which will represent the license-fee payers and to which the executive will have to answer.

 

Critics and competitors of the BBC said they were disappointed.

 

"The white paper singularly fails to rise to the challenge the BBC now faces," Hugo Swire, the Conservative Party's culture spokesman, told Parliament. "It was supposed to provide us with a springboard to the new digital age. But it is not so much a launching pad as a holding pen."

 

The most contentious aspect of the BBC's structure is the way it is financed, almost entirely through the annual fee levied on owners of television sets. The system made sense in the old days, when the BBC was the only game in town and everybody watched the same thing.

 

But now most Britons have access to the Internet and to scores of cable and digital channels, in addition to the BBC's programming, and the BBC's overall audience share has fallen drastically. The BBC's broadcast competitors, which generate income through commercials, say that the license fee is antiquated and should be abandoned or shared with other broadcasters whose programming also has a public-service requirement, like Channel Four.

 

The license fee is £126.50, or $221, a year for owners of color television sets. People with black-and-white sets pay £42. The BBC wants an increase in the fee, with a potential increase to £180 a year by 2013. The exact level will be decided in the next few months. The government also said that at some point in the future it would open discussions about whether to share the license fee with other broadcasters, and would revisit the license fee itself when the next charter expires in 2016, considering, for instance, the possibility of charging a subscription fee to BBC viewers.

 

But for now, the license fee remains a serious source of disagreement, particularly from competitors who argue that it gives the BBC an unfair advantage.

 

Charles Allen, chief executive of ITV, a commercial competitor, said: "The BBC's funding must be proportionate to its needs and should not be able to stifle competition and innovation."

 

Swire of the Conservative Party called the license fee "an example of the stealthiest of stealth taxes."

 

"In a fast-paced digital age, with people watching television on their mobile phones, iPods, and laptops, and with the eclipse of the traditional television channel, is it credible to believe that a compulsory tax on the ownership of a television set is the right way to fund our national broadcaster for the next 10 years?" he asked.