Ofcom suggests giving rivals part of license fee

LONDON — Radical remedies are necessary if the U.K. is to sustain its public service broadcasting model, according to a report published by media regulator Ofcom on Thursday.

The document, “The Digital Opportunity,” which is part of the regulator’s review of public service broadcasting, suggests that some of the BBC license fee — paid by all of Blighty’s TV-watching homes — could be handed to rivals such as BSkyB and Discovery in return for making fare that served a public purpose.

Other proposals include a hike in taxes and terrestrial webs, ITV, Channel 4 and Five being allowed to become purely commercial.

Ofcom CEO Ed Richards said: “Public service broadcasting is at a crossroads. Viewers still want a mix of high-quality U.K.-made content, but the traditional television model is not enough to meet all their needs.

“Today’s proposals outline options for a securely funded PSB future. Now is the time for a wide-running debate looking carefully at all the options.”

The most controversial of these is the idea of allowing other providers to bid for a share of the BBC license fee, provided the coin is used for U.K.-made fare in genres such as children’s, news, public affairs, arts and science.

The license fee generates £3.2 billion ($6.3 billion) a year for the BBC, and rivals, especially congloms like News Corp., which controls paybox BSkyB, insist the BBC’s presence massively distorts the U.K. TV market.

Ofcom thinks a new model for public service fare needs to be in place before U.K. digital switchover, due to be completed by 2012, or else audiences’ appetites for home-grown content will not be as well catered for as they are today.

One possibility is to use the $297 million a year the BBC has allocated for the move to digital-only transmissions and use this coin to provide a fund that other providers could bid for when the move to digital is completed.

The amount of money that the U.K.’s terrestrial broadcasters spend on original programs has declined steadily, said Ofcom, from $5.9 billion in 2004 to an estimated $5.5 billion last year.

Meanwhile the investment in British fare from cable and satellite combos, many of them owned by U.S. congloms, has reached a plateau, according to the regulator.

The BBC has already begun to campaign against rivals getting their hands on a slice of the license fee, a pot of money it effectively regards as its birthright.

The BBC responded to the publication of Ofcom’s report by announcing a series of lectures on public service broadcasting.

These will be delivered by high-profile BBC supporters including natural history program maker David Attenborough and Stephen Fry, whose work appears regularly on BBC webs.

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