Having heard from the BBC’s  leadership last week in discussion with academics, LSE MSc student Kailey Fuller-Jackson argues that the broadcaster’s leadership might be avoiding serious discussion of licence fee alternatives. She suggests that Parliamentarians considering the future of the BBC should ask tough questions about potential funding alternatives. 

On Tuesday 15 July, BBC Director General Tony Hall will appear before the Culture Media and Sport Committee of the UK Parliament, in the penultimate session of an Inquiry on the Future of the BBC.  Witnesses in previous sessions and other commentators have been calling into question the licence fee as a funding mechanism and suggesting alternatives. But it seems the BBC leadership will be pushing the focus onto their goals for the next Charter Review period and away from the difficult questions about the continuation of the licence fee and whether it should be amended.

Increasing competition for creativity and innovation

In a speech on 10 July at City University, Hall focused on improving competition with the aim of promoting creativity and innovation in the UK media industry, and questions of the licence fee took a backseat. Hall brought it down to three principles:

• We must guarantee a supply of creative programs across the BBC from independent and BBC producers
• We must continue to help and grow the UK creative sector
• We must focus on value for money for the licence fee payer

The main announcement was that the BBC is now intending to further open its doors to independent producers and to allow BBC producers to sell their ideas to other networks. Hall justified the move by arguing that increasing competition and reducing consolidation in the production market will help push BBC to up its game on quality.

What about licence fee alternatives?

If the intention of the BBC was to distract participants from discussing the future of the licence fee, it failed. The opinions aired at the City University event seem to fall into two camps, one favouring integrating the licence fee with other taxes, and another suggesting the BBC turn to advertising and subscription revenue streams. Louis Heinsman, the Head of International Relations at NPO in the Netherlands, noted that a licence fee integrated into taxes can work as it has does so other parts of Europe (such as Finland) but suggestions that the licence fee could be part of council taxes (as in Germany) met with a sceptical response from those present.

Participants in debate about whether the BBC could be funded by subscription stressed that subscriptions are subject to demand elasticity and not as many people will likely subscribe. Advertising on the other hand has a huge margin of profit, but is also a limited revenue stream and it is difficult to predict whether it would be a sustainable alternative.

A Tiered Licence Fee?

Is the licence fee likely to then disappear after the Charter Review? According to Colette Bowe, the former Chair of Ofcom, not necessarily, but this should be treated as a time for the BBC to discuss alternatives. The BBC now operates on many platforms, which might open up other options than a simple “TV licence”. The popularity of the iPlayer, for example, opens the possibility of charging a separate licence fee for online broadcasting, or password protecting the iPlayer as an enforcement mechanism so non-licence fee payers would not have to be subject to prosecution.

The universality principle

The prospect of charging for some BBC services raises the spectre of a non-universally available BBC.  As Sylvia Harvey of the University of Leeds stated during the discussion at City, “Freedom that includes exclusion is not freedom. Shall we then start charging subscriptions to the NHS?” On the other hand, Lord Burns argued that the BBC never claimed to be a universal entity. Perhaps the question then really lies in how we define public service broadcasting.

If a UK citizen can’t access PSB media, is it still a ‘public’ good? With funding getting tighter and production budgets already reduced by 26% according to one participant, it is unlikely PSB will head in the direction of a truly public and universally accessible product.

Both Dame Bowe, and Lord Burns were sanguine about the political climate, and how this may impact on Charter Review, which will take place after the next election.

According to Tony Hall, the outcome of these debates is likely to be  little more than a minor adjustment to the current licence fee arrangement. But he might get more than he bargained for.  As they consider the future of the BBC, MPs need to be asking tough questions about universality, what the BBC really needs in order to continue to be a public good in light of the competition,  and how the licence fee might be adapted for the new multi-platform BBC, and the perennial question: how to keep it both accountable and independent.

This article gives the views of the author, and does not represent the position of the LSE Media Policy Project blog, nor of the London School of Economics.