BBC should not share licence fee, says OfcomFuture of public service broadcasting outlined

21 January 2009

BBC and ITV TV logo

The BBC should not have to share the TV licence fee with other TV channels but could use unspent license fee money to bridge the public service broadcasting funding gap, says a report from regulator Ofcom.

Ofcom's long awaited review of the future of public service broadcasting (PBS) rejected the idea of 'top-slicing' BBC programme funding to support services from other channels.

But it did suggest Channel 4 could merge with Five or BBC Worldwide to create a strong PSB provider outside the BBC, using a one-off injection of TV license fee cash.

Check out our digital TV options report for full details of different channel packages available on digital TV.

Public service broadcasting

Ofcom's report said the key to ensuring the future of PSB was not to prop up Channel 4 for its own sake but to ensure there is a viable institution apart from the BBC providing public service content.

Structural changes to Channel 4 would need to be economically sustainable, competitive and provide a genuine alternative to the BBC and complement the market, Ofcom said.

The alternative would be to give Channel 4 public funding directly, make it a fully commercial network, or suspend its PBS obligations.

Channel 4 merger

Speaking to the Today Programme, Channel 4's chief executive, Andy Duncan, said: 'Audiences want the BBC but they don't only want the BBC, and quite clearly Channel 4, in some form, needs to be at the heart or the centre of providing that plurality. And that we are delighted about.'

Mr Duncan also said he strongly favoured a tie-up with BBC Worldwide as the two broadcasters both generate income commercially to invest in public service broadcasting.

Ofcom chief executive Ed Richards said audiences wanted a strong PBS alternative to the BBC. He told the Today programme: 'Our preference is to try and secure that through partnerships, joint ventures or even a merger.'

Digital switchover

Ofcom's report comes at of time of upheaval for commercial broadcasters, including the digital switchover and pressures on television advertising.

Ofcom estimates this will leave a shortfall in funding of up to £235 million a year by 2012.

About £800 million has been set aside to pay for the costs of the switchover. The report suggested that leftover BBC funds earmarked to help the digital switchover could be used to help bridge this gap.

The BBC has said there would be a debate on what happened to any surplus and it was not up to the Corporation to spend the money.

Find out more information about the digital switchover in our digital switchover guide.

ITV and Five

Today's report also proposed significant changes for ITV and Five. Ofcom said it wanted to free up ITV and Five as 'strong commercial networks making entertaining, engaging UK content including national and international news, but with limited public service commitments.'

ITV's networking system was probably unsustainable, the report found, and as a result, regional news broadcasts were coming under threat.

The BBC has offered to share some news-gathering resources with ITV, but Ofcom said the Government needs to create an alternative plan to secure the long-term future of local news in Scotland, Wales, Northern Ireland and the English regions.

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