A digital BBC - at a price


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May 24, 2005
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No one likes paying the TV licence fee, do they? So the BBC's call for it to go up by 2.3 per cent above inflation, every year for seven years, might seem a trifle optimistic.

"Ambitious" was the word used by John Whittingdale, chairman of the Culture, Media and Sport committee of MPs, as he quizzed the BBC chairman Michael Grade and director-general Mark Thompson.

Another Tory MP, Nigel Evans, called it "inflation-busting", noting that Thompson himself had called the licence fee a "burden".

He said the BBC risked creating licence fee martyrs - and early callers to BBC phone-ins made it clear they too were unimpressed.

Yet the BBC believes the reluctance to pay the licence fee is overstated.

It says there has been unprecedented consultation over its future plans and most of the public supports them.

Digital 'refuseniks'

In its submission to MPs, it cites a Mori survey showing that 81 per cent of the 1,640 people who took part believed the current licence fee represented good value. And no fewer than 42 per cent said they'd be prepared to pay twice the licence fee or more.

The problem - both for the BBC and the Government, which will make the final decision - is that this still leaves many people who don't agree. Mr Evans took up the case of the "millions of people out there who don't get inflation-busting increases".

He told Mr Grade: "You say people want all these wider services, but you know from the annual report that a number of these extra services you provide people just aren't watching."

The BBC chairman pointed to the success of Freeview, the digital terrestrial TV service which rose from the ashes of ITV Digital, the pay-TV service which went bust. More than six million Freeview boxes had been sold, he said, demonstrating that licence-payers were interested in receiving new digital services.
The problem, again, is that this still leaves millions of digital "refuseniks" who show no sign of embracing the BBC's ambitious digital vision.

Picking up the bill

These are the very people the BBC and the government must now win over, because the next licence fee settlement is linked inextricably to the decision to switch the whole nation over to digital television by the year 2012.

Many of the costs built into the BBC's plans are directly accounted for by the switch to digital TV and radio.

Building the infrastructure does not come cheap - the BBC will be building new transmitters for digital terrestrial television and DAB digital radio, setting up a free satellite TV service, and investing in high definition television, so it is available to all, and not just those prepared to subscribe to Sky TV's channels.

The BBC has also been asked by the government to pick up the bill for publicising and marketing digital switchover, and to help the elderly and disadvantaged make the switch.

That involves people coming round to their homes and possibly paying for a digital receiver and new aerial. The cost of that, the BBC says, is not yet known, so the final increase it is seeking may be even higher.
It argues that the price is worth paying, so that all licence-payers will have access to all the BBC's output, wherever they live, irrespective of age or income. It's unlikely to convince all licence-payers - the key question is whether it can convince the government.

By Torin Douglas
BBC News media correspondent

Story from BBC NEWS:
Published: 2005/10/11 15:14:55 GMT