UK government ‘misses the boat’ on TV licence fee reform | Major Businesses | Business | News | Rapid TV News
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Despite its long-standing desire to change the way that the UK's national broadcaster is funded through the BBC licence fee, the UK government has been slammed by a parliamentary committee for its failure to enable a viable and alternative form of funding.
BBC corporate 25March2021
Indeed, a withering report by the Digital, Culture, Media and Sport Committee (DCMS) Committee, The Future Of Public Service Broadcasting, concludes that such a failure means that the BBC will be forced to rely on the TV licence fee for the term of the next BBC Charter that will lay down the terms of how the corporation operates from 2028-2038. This raised a real risk that the BBC will struggle even more to compete with digital services such as Netflix, Amazon Prime Video and Disney+.

The inquiry considered a number of alternatives to the BBC licence fee to support public service broadcasting, including models from Germany, Finland and Switzerland, such as household or individual fee; state budget funding; advertising; subscription; and supplementary taxation. None of these were found to be sufficiently better as a whole to recommend as an alternative.

The DCMS Committee says that the Government has left itself with no option on the licence fee, not least because it has failed to put in place the necessary broadband infrastructure that would facilitate other funding mechanisms. Failings by the UK government to live up to its promises regarding gigabit broadband rollout have been another topic on which the UK government has been taken to task by the Committee.

The Committee found that as a result of Government delays to full fibre broadband rollout, a wholly online public service broadcasting system allowing for universal access is not yet viable. It added that while a significant amount of content is being made available online, during the current period of transition the interests of consumers who rely on linear TV must be preserved. Even though future services would be likely to be delivered via the internet, however the present reality was that lack of access to broadband and lack of digital literacy skills could result in 1.8 million households losing television and public service broadcasting services if they were entirely internet-based.

As a result, said the report, UK public service broadcasters (PSBs) were being let down by out-of-date legislation and calls for a new broadcasting act which would enable them to compete and thrive in a new media age with a right to prominence on digital platforms. It added that ensuring adequate funding was essential for PSBs to continue providing linear broadcasting, which remains crucial to older audiences, while also investing in on-demand services.

DCMS Committee Chair Julian Knight MP said that it was clear that the BBC TV licence fee had a limited shelf life in a digital media landscape but that the Government had missed the boat to reform it. “Instead of coming up with a workable alternative, it has sealed its own fate through a failure to develop a broadband infrastructure that would allow serious consideration of other means to fund the BBC,” he remarked.

“Not only that, but the Government is effectively allowing the BBC to haemorrhage funds through non-payment of the licence fee as a result of continued speculation over decriminalisation of licence fee evasion, a situation it must bring to an end. To enable public service broadcasters to compete in a digital world, Ministers must renew broadcasting laws that are nearly 20 years out of date. It’s a question of prominence – too often public service broadcasters lose out on dominant platforms with content that’s hard to find or isn’t branded.”

The Committee recommended that for commercial PSBs, the UK’s Digital Markets Unit should address the lack of competition and regulation in online advertising but in the round it said that PSBs should do more to help themselves to attract digital audiences rather than wait for action by Government. MPs cited the BritBox SVOD service as an example.It also recommended that PSBs explore options for collaboration on a single video on demand platform, and Ofcom should support PSBs in this endeavour.

In conclusion, The Future Of Public Service Broadcasting urged the UK Government to prioritise new primary legislation to update the Communications Act 2003 and grant PSBs prominence which extends beyond the Electronic Programme Guide. It also warned that unless PSBs do more to attract younger audiences, the core principle of universality that underpins their existence will be threatened and it recommended that the UK government made changes to the regulatory structure to enable PSBs to innovate more rapidly and easily, and to be able to better compete online.

Most importantly, it called on the Government to create a strong alternative to the BBC licence fee that it could put to Parliament, or strongly support the current model for at least the next Charter period and actively aid the BBC in driving down payment evasion.