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BBC is under threat

The government is set to slash the licence fee rises the BBC wants to below the rate of inflation and have a review half way through the new charter, putting the broadcaster on a political leash, according to the front page of the Observer today.

Already the BBC has scaled down its 2.3% a year above inflation request, made to help meet increased costs including the switch to digital TV and the move of chunks of the organisation to the Manchester area. It now stands at 1.8% above inflation but, according to Nick Temko, Number 10 and the Chancellor, Gordon Brown, are pressing for a settlement of 1% below inflation.

The BBC had not been making a lot of friends. Threatening not to move parts of the organisation to Manchester, which has always had a whiff of the pork barrel about it, was probably a mistake. And last week Mark Thomson, the director general, was rowing back from the very local TV plans which have infuriated the regional media (Press Gazette).

At the same time Rupert Murdoch is dangling Gordon Brown and David Cameron, the Tory leader, on strings. They both want his support and he hates the whole idea of the licence fee which he sees as being unfair to his Sky TV operation.

And commercial media has not been overjoyed at the way the BBC has used the licence fee to move into text journalism through its web site with local, national and international news services.

Will Hutton, on the Observer’s op-ed page, makes an impassioned plea to save British TV for the nation. He is not only concerned for the BBC but the beleaguered ITV (facing a possible bid from cable company NTL and maybe Bertlesmann) and C4 whose ad revenues are falling.

He concludes:

Digitalisation does not mean that only commercial television and the market rule. Rather, we have to think differently about how to maintain their same constructive tension with the notion of public-service broadcasting and have the confidence and conviction to do it. And that begins with Brown’s decision on the licence fee.

I would just add that as media converges similar arguments apply to the BBC’s financial ability to continue to invest and innovate on the web.

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