Gov chips away at BBC license fee

Politicians signs policy shift for news services

The U.K. government Tuesday signaled a major media policy shift that could see commercial news services funded from the BBC license fee.

Announcing the long awaited Digital Britain report, Blighty’s communications minister Stephen Carter said approximately £130 million ($214 million) a year, about 3.5% of the $5.9 billion annual fee, could be made available to competitors beginning in 2013 to help pay for news and children’s shows.

Until 2013, the surplus coin the BBC ring-fenced to help the disadvantaged switch to digital TV would be used to fund three pilot local news services that could be used by commercial rivals including ITV (Daily Variety, June 16).

Policymakers fear that unless there is public intervention the BBC could end up as the sole provider of local news and tyke programming in the U.K. because ITV and others say they can’t afford to fund such shows in a highly competitive, all-digital landscape.

However, Carter stressed the idea of what the government described as “contained contestability” — giving commercial combos access to license fee money, paid by all homes with TVs — would only be greenlit following consultation.

“If we were absolutely clear that contestability is the only answer we would have said that,” he said. “We’re not 100% sure that contestability is the answer.

“Having looking at this now for a considerable period of time … we have not yet seen another proposal which provides the funding level that we believe is needed.

“This is a significant decision to change the way the license fee will be spent, which is why we are consulting.”

Other highlights of the 238-page report include:

n The end of public service obligations (such as news) on ITV and RTL’s Five, with the exception of local production quotas;

n A crackdown on Internet piracy policed by communications regulator Ofcom;

n A new role for state-owned commercial broadcaster Channel 4 with a greater emphasis on the web’s online activities;

n Universal access to high-speed broadband funded in part by a $10 annual levy on fixed-line telephones.

Culture secretary Ben Bradshaw told the House of Commons he had no update on a proposed partnership between BBC Worldwide and Channel 4, adding negotiations were ongoing. “We are ready to help in any way we can,” he added.

The Digital Britain document was endorsed by Prime Minister Gordon Brown.