OPINION: Licence add-on for digital TV is the logical way forward for BBC

It has been clear for months that the Davies panel on the financing of the BBC was likely to recommend a new digital licence fee as the only practical way of raising lots of extra money for the BBC.

It has been clear for months that the Davies panel on the financing

of the BBC was likely to recommend a new digital licence fee as the only

practical way of raising lots of extra money for the BBC.



Davies, the Goldman Sachs economist worth the odd pounds 100m or so, was

wedded to the device before he had even had a chance to discuss it with

his fellow panel members.



The commercial sector led by Granada is now planning a last-ditch

campaign to try to stop the proposal. The chance of success seems

slight. A strong chairman of a government inquiry usually gets his way

on fundamental desires; and anyway, there is no other obvious way of

raising significant new sums of money for the BBC over the next decade

or so. Like the move to colour, it is the most dynamic mechanism. The

amount goes up year after year as the digital television population

increases. It also has the merit of apparent fairness. Digital viewers

are getting more BBC services and this would stop the iniquity of the

majority with five channels subsidising the extra television choice of

more affluent viewers.



The disadvantages and risks posed by such a policy are, however, just as

great as the advantages. As Sir John Birt once observed to the Heritage

Select Committee, such a device would amount to a tax on innovation. The

comment at least proves that the BBC conspiracy to push through a

digital licence fee, while appearing publicly neutral on the issue, was

hatched relatively recently.



The two million families who will probably have digital by the time any

new licence fee could come into effect will not be amused, particularly

following the plethora of BBC ’ads’ saying there was no extra

charge.



The reaction of the rest of the population is difficult to predict. Such

a licence would be small compared with the more than pounds 300 in

benefits flowing from subsidised boxes. But not everyone makes such

rational calculations and the public demand for digital TV is not high.

How else can you explain the fact that Sky and ONdigital feel it

necessary to spend more than pounds 500m subsidising boxes.



Davies is concerned that as services proliferate the BBC proportion of

the whole will shrink. Therefore, the corporation must have more money

to keep up. Many of those who find themselves competing against the BBC

believe its proportion of the market, given its guaranteed pounds 2.2bn

a year funding, is already too large.



So what happens when the Davies’ panel report hits Chris Smith’s desk

with its recommended pounds 30 digital licence fee? There will be a deep

intake of breath and then everyone will go off for their summer

holidays.



This will not be a decision to rush. A lot of very detailed

consideration and consultation will have to take place on such a

fundamental issue.



It could even be difficult to find the time to implement such a decision

in the current Parliament.



By then, there would be three million or even four million people to

piss off and that really would not be very good politics.



Raymond Snoddy is The Times’ media editor.



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