Jake Gordon

Should The BBC continue to receive large amounts of public money through the licence fee?

The BBC was founded by John Reith in 1922 following a vision for an "independent British broadcaster able to educate, inform and entertain the whole nation, free from political interference and commercial pressure", differentiating it from unregulated commercial radio of the US, and the rigidly controlled state broadcasting in The Soviet Union. It wasn't until 1927 that the BBC became public, receiving its Royal Charter which defines the corporations' objectives, powers and obligations. (bbc.co.uk, accessed 19/4/03).

Since its early years, the BBC has received its main source of revenue through a licence fee. The cost and requirements for a licence fee have changed with technology over the years, however today in 2003 a licence is needed by households which "use or install television receiving equipment to receive or record television programme services" (tvlicensing.co.uk, accessed 19/4/03). People over 74 do not have to pay, whilst the blind receive a 50% discount. All other households which use a TV must pay £116 per year (or £38.50 for a black and white TV). Failure to pay is a criminal offence, facing prosecution and a fine up to £1,000 or even a jail sentence. Even if someone never watches BBC channels, the fee is still payable. However there is no charge to listen to BBC radio channels or visit one of the BBCs websites - these are also funded by the licence fee and the BBCs other revenue sources, such as revenues generated by BBC Worldwide Limited.

Opposition to the licence fee

Several campaigns are currently active to abolish or rethink the licence fee, with the BBC's Royal Charter requiring renewal in December 2006. Whilst many of the opponents to the BBC's licence fee have obvious commercial interests in its demise (for example, Tim Gardam and Barry Cox of Channel 4), there also appears to be an increasing group of activists who consider that the compulsory licence fee encroaches upon their rights, and others who consider it to unfairly target the poor. There is also concern that the BBC is not impartial and censors material.

BBC Resistance (tvlicensing.biz) is one of the most active online opponents to the licence fee. A campaign flyer issued by them outlines many of their concerns with the licence fee, arguing that "...The BBC was the model for George Orwell's Ministry of Truth and no organisation has ever been its equal for doublespeak... The BBC prosecutes 130,000 people a year... Many or most are on benefits. The BBC criminalizes poverty. Children in Need is just more BBC doublespeak. The BBC makes poor people poorer...".

The flyer also claims that the BBC censors news about the licence fee. On April 14th 2003 the Mediaguardian and various other sources ran a story on a new high court challenge by Jean-Jacque Marmont (a 60 year old disabled man who refused to pay the licence fee) to the BBC's licence fee on grounds of a breach of the European Convention and The Human Rights Act of 1998. The BBC News website did not run the story, and nor have they run several similar stories such as a case brought by the 'Liverpool Six' (five single mothers and an asylum seeker). Jean-Jacque Marmont wishes to bring the court's attention in particular to part of Article 10 of The Human Rights Act of 1998 which states that "Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers." (italics mine). So for example, if someone wanted to watch Channel 4 then they should be able to do this without 'interference by public authority'. However, to watch Channel 4 one must be in possession of a TV licence which could be considered a form of 'interference by public authority'.

The licence fee has been likened, by Barry Cox of Channel 4, to a poll tax which burdens the poor. Perhaps worryingly, the TVLA decides who to visit based upon deprivation index statistics. Non-licence-paying households are more more likely to be visited if they're located in deprived areas, as ranked by the census. Meanwhile, top BBC executives receive healthy rewards for their work. Whilst Tony Blair is paid a modest £172,000 per year to run the country, Greg Dyke (BBC Director General) receives £469,000. Whilst the wage bill of the entire government Cabinet is £3m, the full BBC executive committee receives over £5m. (various sources: tvlicensing.biz; media.guardian.co.uk; politics.guardian.co.uk; Private Eye no. 1077:6).

Licence fee advocacy

However, as compelling as arugments may sound in opposition to the the licence fee and the workings of the BBC, there are also extremely valid rebuttals to these arguments, accompanying sound reasoning in its favour.

Although households with a TV must pay the licence fee, there is no obligation to own a TV. Also, those not paying the TV licence one can still enjoy free BBC radio and online services which are subsidised by the TV licence fee. If radio and online services were not paid through the licence fee, then other means of collecting their revenue would have to be found - for example with a historical regression to when the licence fee was required for radio as well/instead of TV. For poor people who just listen to the radio, the current situation is obviously of clear financial benefit. Of a total UK broadcasting spend of £2,591m in 2001/02, £574m (22%) were spent on radio (474m) and online (£100m) services for which a licence fee is not required (figures from BBC Annual Report & Accounts 2001/2002).

The argument that one should not have to pay for something they don't use (for example, by only watching ITV/Ch4 and not the BBC) could equally apply to areas of tax-funded public expenditure - "You can apply that argument to anything... Why should I pay for Council Houses to be subsidised? I don't live in one." (Paul Dundas, posted on usenet: uk.media.tv.sky, subject: Re: Increased BBC licence fee, 08/08/1999). Here, the issue becomes broader and relates to the central issues of freedom and choice and their place in a social democracy. One person's freedom to choose can encroach upon another person's ability to live in a fair and equal society, and hence a raison d'être for state legislation and control, both in relation to the licence fee and also society in general.

The often overlooked cost of watching adverts also has to be factored in. If the BBC was to run with adverts instead of charging a licence fee, then it may not cost to watch the TV, but the intended effect of the adverts will be to lead viewers to buy new things - things which they possibly wouldn't have bought if they hadn't watched the TV. If adverts didn't have such an effect on the 'average' user then they would be pointless and would cease to exist. Hence, whilst saving the poor viewer £116 per year on the licence fee, an additional - and possibly greater amount - may be spent on consumer goods.

The BBC doesn't take adverts "[b]ecause the BBC is a public and not a commercial service. If it had to compete with other broadcasters for adverts to supply some or all of its revenue, BBC programmes and services would have to be run more to satisfy advertisers..." (bbc.co.uk, 2003). This issue of primarily satisfying advertisers before viewers is intensifying in an increasingly competitive market, especially due to recent trends which are affecting the standard advertising break model: personal video recorders (PVRs) such as the TiVo enable users to easily skip adverts whilst watching programmes 'semi-live' or at a later date; an increasing number of available channels enable easier channel-hopping during advert breaks. Ways for TV companies to reduce their revenue loss from this include: an increase in the frequency of advert breaks; specific programme sponsors; increased product placement; and 'advertainment' type programming, where the distinction between advertisement and entertainment is lost. Alternatively, channels can rely solely upon a subscription fee - although at present this is not technically feasible for analogue terrestrial channels such as BBC1/2, ITV, Channel 4 and Five. Hence, if the BBC was to lose its licence fee, not only would it have to run traditional adverts, but it would also have to alter its programming along with other channels to maintain solvency.

The future of broadcasting

The Internet and new technology in general should not be ignored in a discussion of the licence fee. Through its decentralised nodal structure, the Internet democratizes information, enabling individuals to connect with each other, sharing information, free in most cases from any enforceable regulatory control. And the Internet isn't just about text and image based websites - it can transport any data that can be digitized, including sound and video. With the UK Government pushing broadband access, it becomes feasible for both 'radio' and 'TV' to be streamed live over the Internet to a worldwide audience at a fraction of the cost of traditional antenna or satellite broadcasting. Alternatively, in the same way that almost every song ever recorded can now be illegally or legally downloaded, so too are an increasing number of televised programmes, with the result being zero-pay-per-view content.

Broadcasting an Internet 'radio' station or Internet 'TV' station is relatively simple and is becoming extremely popular. Providing content for those stations is hampered by restrictive copyright law. However, with cheap but high quality digital video cameras, creative individuals can create highly entertaining and educational programming. Whilst the second Gulf War has had its 'Baghdad Blogger' providing textual news from an Iraqi perspective inside Baghdad, as the technology proliferates around the world future news could conceivable be covered in a similar way in full audio and video.

Meanwhile computers are merging with traditional TVs, VCRs and DVD players as cheap, small and silent computers physically similar to consumer DVD players are becoming available. It is now possible to replace a dedicated music system, TV, VCR and DVD player with one computer (with 20" monitor) at a cost of £800 which will perform the same functions in addition to traditional computer functions including browsing the web.

It is crucial to talk about these changes as they will have an unprecendented effect on the broadcasting landscape over the next ten years, and will certainly have had dramatic impact by the 2006 Royal Charter renewal for the BBC. In the long term, it is conceivable that the role of a corporation such as the BBC will be more aggregator and quality-control agent, sifting through the thousands of individual news and content sources, with programme production becoming secondary. In such a case, monies will still be required, but on a much smaller scale. Not everyone will have a 'TV' a such, and the requirment for a licence fee will have to be changed to include any household with an Internet connection.


The licence fee enables the BBC to be free from commercial pressures, providing people with 'quality' content at a relatively cheap price. However, this comes at a cost of individual freedom and choice, which is of particular concern with the possibilities of censorship and political bias. Further concern is aired regarding the issue of wealth redistribution - targeting the poor whilst the executives receive fat pay checks. Fortunately, the BBC is under constant public scrutiny and inspection, and is accountable to both licence fee payers and Parliament - although it is possible that its content and operations not questioned enough.

There are definite needs for the BBC, however its exact method of funding requires a rethink - particularly in light of technological advances. It is not argued that the licence fee should be abolished and replaced by advertising, but to be broadened and possibly reduced, especially for the poor. Perhaps the licence fee should be broadened to include any household with an Internet connection, whilst becoming means-related, possibly based upon income tax, with large concessions made for the poor. Along with greater public scrutiny and lower remuneration for top executives, such changes should provide the BBC with sufficient reason to have its Royal Charter renewed beyond 2006 and into the forseeable future.

[2,077 words, written in 2003]

Bibliography & References

Bard & Söderqvist (2002) Netocracy, London: Pearson Education

Curran, J (2002) Media And Power, London: Routledge

Franklin, B (2001) British Television Policy: a reader London: Routledge

Hutchings, S (2002) No More Adverts May Come At A Cost
URL: http://mms.ecs.soton.ac.uk/papers/45.pdf (accessed 24/4/03)

Swain, P & Blustin, A (2000) Personal Television Services: the impact on advertising
URL: http://www.decipher.co.uk/research/whitepapers/personaltvservices.pdf (accessed 25/4/03)

TVLicensing.co.uk (2003) Do I Need A licence
URL: http://www.tvlicensing.co.uk/tvlic/licence/licence.html (accessed 19/4/03)

BBC Online (www.bbc.co.uk):
- BBC licence fee under fire again, BBC News, 27/1/03, URL: http://news.bbc.co.uk/1/hi/entertainment/tv_and_radio/2697979.stm
- History of the BBC, URL: http://www.bbc.co.uk/thenandnow/history/1920s-1.shtml (accessed 19/4/03)
- How The BBC Is Run, URL: http://www.bbc.co.uk/info/bbc/acc_how.shtml (accessed 20/4/03)
- Why Doesn't The BBC Take Advertising?, URL: http://www.bbc.co.uk/info/bbc/lic_advert.shtml (accessed 19/4/03)
- Delivering Value For Audiences, URL: http://www.bbc.co.uk/info/report2002/pdf/overview_licence.pdf (accessed 19/4/03)

BBC Resistance (www.tvlicensing.biz):
- Campaign Flyer, URL: http://www.tvlicensing.biz/leaflets/pdf/bbc_resistance_campaign_flyer.pdf (accessed 19/4/03)

Guardian Unlimited (www.guardian.co.uk):
- Barnett, S (2003) BBC licence: you won't get a better deal for 31p a day, The Observer 2/2/03, URL: http://media.guardian.co.uk/columnists/story/0,7550,887866,00.html (accessed 24/4/03)
- Wells, M (2003) Cabinet media adviser says licence fee must go, The Guardian 27/1/03, URL: http://media.guardian.co.uk/broadcast/story/0,7493,882997,00.html (accessed 17/4/03)
- Deans, J (2003) Rebels launch licence fee action, Media Guardian19/2/03, URL: http://media.guardian.co.uk/broadcast/story/0,7493,898252,00.html (accessed 15/4/03)
- BBC faces latest licence fee action, Media Guardian, 14/4/03, URL: http://media.guardian.co.uk/broadcast/story/0,7493,936780,00.html (accessed 15/4/03)
- Gibson, O (2003) C4 boss makes state funding plea, Media Guardian, 15/4/03, URL: http://media.guardian.co.uk/broadcast/story/0,7493,936802,00.html (accessed 15/4/03)
- Gibson, O (2003) 'BBC online', The Guardian, 15/4/03, URL: http://media.guardian.co.uk/city/story/0,7497,937147,00.html (accessed 15/4/03)
- Milmo, D (2002) BBC commercialism risks licence fee, Media Guardian, 27/8/03, URL: http://media.guardian.co.uk/edinburghtvfestival/story/0,7523,781437,00.html (accessed 14/4/03)
- Valvona, Glover & Meghji (2002) Blair by numbers, The Guardian, 26/4/03, URL: http://politics.guardian.co.uk/fiveyears/story/0,11899,690825,00.html (accessed 17/4/03)
- Rose, D (2003) Our jails are full to bursting - and it's almost all down to drugs, The Observer, 9/2/03, URL: http://politics.guardian.co.uk/homeaffairs/story/0,11026,892111,00.html

Usenet Archives/Google Groups (groups.google.com):
Dozens of discussion threads posted in 'uk.media.tv.misc', 'uk.media.tv.sky', 'uk.tech.broadcast' and other groups.

Various other reference websites: slashdot.org, mini-itx.com, capita.com, news.com, feedster.com, moveabletype.org, hushtechnologies.net, winamp.com, pbs.org, via.com.tw, cpb.org

by Jake Gordon, some rights reserved