ITV says "jump", OFCOM ask "how high?"

Or even provide people in Scotland with programming they understand.

It's not an argument anyway - the government does not fund ITV, and it raises questions about independence if it starts randomly getting unprecedented money from the government. However, again, stop blaming the Scots for this - we didn't ask for this ridiculous channel.

With regards to the arguments - ITV is doomed in the long-term because, on the one hand it can't afford to do the regions in the same way it always did because it doesn't have a monopoly, but on the other if it gets rid of them and ditches other properly funded programming it loses its USP and becomes another Sky One-alike on the EPG. Look out for the inevitable takeover by someone who will push it one way or another - at the moment it's just drifting.

With regards to Border/Tyne Tees, I think the wrong battle was fought. Rather than trying to plug the leak in a sinking ship with Lookaround, viewers in the Scottish half should have lobbied for ITV to have to hand over this part of the micro-region to STV to provide proper Scottish programming, but provide a similar opt-out to the Borders that it already does for Glasgow and Edinburgh. It's hard to see ITV objecting too hard to losing a fairly small proportion of its broadcast area to push its bigger programme through. It is a joke that regional news for part of Scotland will come from Newcastle, and the one part of this that there is no argument for whatsoever.

Lots of small little points by noggin there and so rather than address them one by one, I'll try to focus on just a few of the key points and work from there.


Yes, but that's true of most things. You offer something for free, and more consumers will take it than if you charge some price for it. I agree that there is merit in the public service argument for educational services where these aren't commercially viable. I also accept the But again, I question whether TV is the medium that needs to deliver that. Moreover, there is a risk that when the BBC invests in these sorts of productions it discourages commercial operators from doing so - the audience is going to be dilluted, because they might not be inclined to watch both Planet Earth and some equivalent that might be broadcast - for sake of argument - on ITV. On a broader level, I don't think it's a coincidence that as the scope of scale of the BBC's services has increased over the years that the quality of the 'public service' content that ITV is obliged to air has apparently declined.


And I have no problem with public funding for high quality current affairs content. Here in Australia, I think it's deeply regrettable that our commercial networks have given up on the genre. We have the ABC and SBS though (our public service broadcasters) doing an outstanding job. For whatever reason, mainstream audiences here aren't inclined to watch indepth journalism - yet there is still obviously tremendous merit from a public interest perspective in investigative reports.


Sure - but it's not really the funding model that dictates that. The politicians create the structure in which the BBC operates. If they wanted to interfere in the BBC, they could simply change that structure. However, politicians are held to account by the electorate. If voters value an independent public service broadcaster, then any efforts to erode that independence will come in for tremendous scrutiny. It is because of the high regard in which the public holds the BBC's editorial independence that we see that being maintained - not because of some supposed 'distance' that the licence fee creates.


With who? People on this site maybe. But if an extra dollar is going to be spent by government, I suspect parents would rather see it spent on schools than the BBC. I suspect the sick and infirmed would prefer to see it spent on hospitals. I suspect those in neighbourhoods blighted by crime would prefer to see it spent on policing. But even putting all that aside, the actual cost of collection through the licence fee reflects a complete waste of resources. Up to £200m of what is collected through the licence fee simply evaporates - it doesn't actually get spent on public service broadcasting, but on the mechanism for raising the revenue in the first place. We should strive for efficient taxation systems that minimise the cost of raising funds. Setting up a separate collection regime is costly. Using the existing income tax or VAT systems is not. Even if people would in fact happily pay more for the BBC, I find it hard to believe that they would not prefer to see the £100-200m pa spent on actually providing services rather than simply collecting money.


Except that's not quite a fair comparison. They could also use their TV to watch a range of non-BBC services. But they don't have that choice.

In saying that, I don't hold much stock in that particular argument. Taxes are designed to fund a range of services that many taxpayers might not use. The point of taxes is not to simply take money from people and give that same money back to them - that would be a complete waste of time. Tax plays a redistributive function. We shouldn't expect to get back through 'in kind' value what we pay in taxes. What we should expect though is that our taxation systems are as efficient as possible at collecting, administering and distributing funds. That is not the case with the licence fee - it is a very costly and wasteful mechanism.


But you're kind of shooting yourself in the foot there. If there is a true public service argument - and I believe there is - then in fact there shouldn't be grounds for people to opt out at all.


There is absolutely no reason why that same Royal Charter process could not operate in the absence of the licence fee. Remember, the licence fee is still a tax - it still (technically) passes through the government's coffers. If the government wanted to strangle funding to the BBC, it need only change the legislative environment in which the BBC operates. But that would almost certainly be political suicide. Again I make the point it is not the licence fee mechanism that distances the broadcaster from government, it is in fact the constraints imposed by the electorate on government in demanding an independent BBC.



As an aside, on the BBC Alba discussion, I don't know much about what service is being provided, or how many Gaelic speakers there in Scotland, but on the surface of it, I actually think there probably is some merit in this particular service. I suspect Gaelic-language content would not be commercially viable, and wouldn't otherwise be produced without the BBC's (and taxpayers) involvement. Now, the only point here is that these sorts of projects need to be 'reasonable', I guess. What I mean is, if you've got an obscure language that only 10 people speak, then using public money to fund a full TV service for them would seem a bit extreme. Sure, it wouldn't be commercially viable - but that doesn't necessarily guarantee that the service should be provided at all. I simply don't know to what degree this might be true for BBC Alba. Certainly though, if a complete (and preferably independent) cost benefit analysis has been undertaken which demonstrates a net public benefit from BBC Alba, then in principle the project is a good one. But the devil is in the detail with these sorts of things.

Yet again you've repeated that stuff is being provided for "free" - it isn't. It is being funded in return for the licence fee payment that all of us who own TVs pay. Planet Earth is not free on the BBC, all of us who have had TVs have paid for it...

There are lots of arguments for why ITV has declined in quality. Few consider a strong BBC to be the cause - in fact most think that a strong BBC has been the main reason that ITV hasn't dropped in quality more quickly.

Most think that the 1992 franchise round was a crucial tipping point, but also the fragementation of the audience as a result of multi-channel TV (which launched in the UK with satellite in 1989ish), and a dilution of the TV advertising budget has played a big part.

ITV used to provide similar natural history output to the BBC (Anglia Survival springs to mind) as well as quality science programming (The Real World from TVS) - but with the mergers and buy-outs of the franchises, and the dropping of public service requirements in their licenses, meant that ITV had dropped much of their factual non-current-affairs output by the 90s. This was not because the BBC was dominant in the genre, it was because ITV decided the genre was too expensive, and could make more money from cheaper shows that would get similar audiences, or more expensive shows that got higher audiences.



Yes - but that structure is only up for change every 10 years - and the BBC is such a large part of the UK's National Life, Politicians of all parties know that they meddle with it at their peril. Even Thatcher didn't manage to meddle that much - though she wrecked ITV by generating the legislation that caused the terrible 1992 franchise round, she didn't manage to get her hands on the BBC.

The negotiation of each Royal Charter usually takes longer than the life of a single DCMS Minister, and the charter lasts more than two government terms.

That inertia of legislation is key.



They are both factors believe me. The distance between funding and government is VERY important - it means the treasury can't get too involved with the BBC funding.



No - that is the funding model that the UK has decided to follow. The licence fee is now also used to fund digital switch-over as well as the BBC (so areas where analogue is switched off are provided with subsidised digital receivers on a means-tested basis) and there is a possibility that some funding for C4 may also come from the licence fee (or via BBC Worldwide)



Not at all - if you don't want to watch TV, you don't own a TV, and you don't pay a TV licence. The TV licence is not like health care or education - it is like the road tax. If you own a car, you pay road tax. If you don't own a car, you don't. If you own a TV you pay a TV licence, if you don't own a TV, you don't.



Yep - absolutely. It is just that everytime they've looked at other models - subscription, direct taxation, splitting the BBC up etc., they've concluded that they offered no improvement, and were potentially damaging.

2012 could be interesting - the 5 year point of the current charter - as it may well co-incide with the end of analogue broadcasting, and by 2014 ITV are expected to possibly drop any regional broadcasting...


Err - it doesn't pass through the governments coffers AFAIK. Whilst the collection is legislated by government, and there are criminal offences involved with non-payment, I don't believe the money raised passes through the Treasury does it?

The BBC, via TV Licensing, sub-contract a 3rd party (no longer via the UK Post Office) to collect it and that revenue goes straight to the BBC. I don't believe it goes via the Treasury at all. Why do you think it does? Or am I missing something?



Yep - but the 10 year charter process avoids this quite effectively, as the renegotiation of the charter takes an appreciable time, and it is a negotiation. AIUI if the BBC were funded directly from the Treasury, the process would be quicker and far more one-sided.

BTW - when it comes to the arguments about taxation collection costs - you could apply that equally to Road Tax (where you have to pay your Road Fund licence...)

OK, fine - then nothing that is provided by government is "free". I simply mean free in a direct sense, distinguishing the BBC from subscription TV services.


But I come back to the point I made before. Why did they regard it as too expensive? The fact that the BBC was providing those kinds of services as well was conceivably going to limit the amount of viewers they would get, thus having an impact on their advertising revenue. I can't definitively state this was the case, but I don't think the effect can be discounted.


And again, you could replicate that same review structure within the context of the general tax system. It is not the licence fee that protects the BBC's independence, but rather the institutional settings and the public's views and expectations which constrain politicians' ability to meddle.


Except a road tax serves a different purpose. It is a type of user charging that is designed, at least in part, to help mitigate the effects of congestion. You can do that through tolls and cordon pricing (ie. the Congestion Charge in London) as well, but road taxes are a more general mechanism to increase the cost to road users. Why do we want to increase the cost to road users? Because each new user on the road imposes costs on other road users - each additional car on the road will, at some point, result in increased delays to all motorists in the network.

But broadcasting does not face a congestion aspect. In fact, free-to-air broadcasting is entirely 'non-rivalrous' in nature. You can have 10 people or 10 million people watching a channel or show, and it makes absolutely no difference to the quality of service each person is receiving. That's quite different from road usage. So I'm not inclined to draw a parallel between the licence fee and road taxes.


I did a quick check of Wikipedia - not always a reliable source, of course - but it seems to indicate that in fact the money does enter consolidated revenue as part of the overall process defined in the Communications Act.


Well, I think the road tax can be a slightly different case for the reasons I've outlined above, but certainly I accept that there can be many types of inefficiencies in tax systems around the world - the licence fee is but one of them. Ideally, you would want to have tax systems that are as simple and consolidated as possible. That reduces collection costs, which would ensure that either less needs to be collected from taxpayers in the first place and/or more can be spent on providing the goods and services that taxpayers want from government expenditure.

But most people in the UK don't see the BBC as "provided by the government" - that is the whole point of the licence fee. Most people in the UK see the BBC as provided by the licence fee. Yes the licence fee is legislated by government - but the BBC services are not seen as "government provided" - as they aren't...

The BBC is a unique institution - not government, not private, not commercial, not an instrument of the state...


Because ITV could deliver greater returns to their shareholders by making less expensive shows that delivered the audiences advertisers wanted.

In commercial TV not every viewer is equal after all.

Once the IBA and then ITC were disbanded and replaced by less and less regulated regimes, culminating in the current, faintly pointless Ofcom "light touch" (which has left Ofcom with almost NO powers of regulation in comparison to the IBA) ITV were free to pursue profit rather than public service, yet they were still provided with public spectrum in a priveleged manner.

Quite simply, ITV stopped making such a wide range of quality programmes because they stopped having to, and could make more money in other ways, at the expense of their public service output.

After all - ITV went massively down the Premium Rate Phone Call funding model when they were allowed to (until they got very badly burned)



Hmm - not sure that argument holds that much water. Competition in all genres of programming is healthy. It is far from good news that the BBC is left as the sole provider of some genres of content, which was previously provided by ITV. (At least C4 and Five are continuing with some PSB content - C4 still has a public service remit, and is a publicly owned corporation, like the BBC, though funded by advertising - and Five is still doing well with kids content - though only by entering into heavy co-production - with little entirely self-funded content)



Yep - though the minute you fund broadcasting directly from the treasury - you leave it much more open to dynamic fluctuations in funding - however much you try and create legislation to prevent this, once you accept that broadcasting is state funded, you are in a very different situation.



But equally you can argue that paying Road Tax grants you the right to drive on the roads, just as paying a TV Licence grants you the right to watch TV. Both are optional.

I'm not talking about WHY we use Road Tax and the TV Licence - just pointing out that not all taxation is collected in the same way. For many years the Road Tax and the Licence Fee were collected identically (payment at the Post Office)

It was a response to your suggestion that the licence fee should be scrapped because the collection mechanism was flawed. I was simply pointing out that largely the same collection mechanism was used for Road Fund licensing.

I may be wrong - and that article may be correct. Not sure if it changed under the (disastrous it appears) 2003 act.

That may be preparing the licence-fee for potential top-slicing... One suggestion is that the money the BBC has to set aside for assisting digital switch-over (and the spectrum it may have to provide to other broadcasters) will continue post 2012 to subsidise other PSB activities...

I'm sorry, but that's an entirely self-serving claim. If you want the public to perceive you as independent of government, then of course you're going to claim a 'unique' status that is entirely removed from government. Yet perception can be different to reality. The fact is that the BBC is funded by government - its revenue comes from a tax. Gordon Brown might not be personally responsible for the BBC, but that doesn't mean its not a government service.


And as I've said already, I don't understand what the issue is with any of that. If you've got public service intentions, then impose those on the BBC - that's why it's role is mandated by government and is funded out of tax revenue. Let the commercial broadcasters get on with the job of running viable businesses. If you want to control what those firms do, then why not go the whole hog and nationalise them rather than operate on some faint premise that they're actually private sector.


And as I've already said much earlier in this thread, competition is not an end in itself. We like competition because it helps ensure efficient outcomes in terms of pricing, quantity and quality. Yet when we're talking about "public service" obligations - things that the private sector is disinclined to provide for whatever reason - then we don't actually have a market. Creating one through regulation is a costly, and frankly pointless, exercise. If your objective is to deliver quality in public service provision, regulate the standards - don't force the duplication of content.


But it's state funded now. The licence fee is a tax. If you're concerned about 'dynamic fluctuations in funding' for the BBC, then surely you'd be concerned about similar fluctuations that might hit schools, hospitals, police and welfare services. I don't see why the BBC should be any different. To my mind, the best way to help reduce those fluctuations is to have simple and efficient tax systems - ones that are consolidated and which minimise collection costs such that the benefits from government expenditure can be maximised.


Sure, but my point is that there's a specific reason for the road tax. To address road congestion, you need to impose the cost on road users. I'm not necessarily saying the road tax is the most efficient mechanism that might be available. However, in general terms, if addressing congestion is seen as a desirable policy objective then you do need a separate tax collection regime - that structure can't be replicated within the context of an income tax, for instance.

By contrast, the best justification I'm seeing here for the licence fee is that it 'guarantees independence' - and I think that's a thoroughly specious claim. I maintain that the institutional structure that surrounds the BBC's funding can be replicated within the context of the general tax regime. It is the public's will which imposes constraints on politicians when it comes to the BBC's independence - not the licence fee.

I've come to the conclusion Michael Grade must have sold his sole to the devil.

http://www.guardian.co.uk/media/2008/oct/08/itv.television

I was never as enthusiastic at his appointment at ITV as some others would, but I never thought he'd come in wanting to kill it off. And if he's so convinced viewers wouldn't stop watching Corrie if it was lower down the EPG, why doesn't he move it to ITV2 then?


P.S. An interesting blog on Broadcast about "local TV" across Europe, but stupidly reaching the conclusion of setting up a new network of local services on Channel 6 rather than saving the network established to do that.

http://www.broadcastnow.co.uk/opinion_and_blogs/2008/10/blog_local_tv_is_psb.html

And surely if the Competition Commission can back track and make Sky reduce their stake in ITV for the sake of competition, they can force ITV to sell some of it's regional franchises for the same reason too.

Most people don't see the license fee as a tax, and certainly not one that is Govenment led. Look at the posts we get on here every now and again from people complaining about the license fee - they never mention the Government, just that they don't watch the BBC and therefore shouldn't have to pay for it. One good thing to come out of the Hutton enquiry, was proof of how little control the Government had over the BBC, and despite them trying to rearrange things to have better access and control, most people are still happier to believe what the BBC tell them, rather than polititions.



But currently, ITV doesn't compete on a level playing field with other commercial broadcasters. In exchange for providing a level of PSB, they are gifted the access to spectrum on analogue and digital and are guaranteed a high EPG position, by the government. If they want to pull out of the PSB elements and produce only content which pleases their shareholders, they should do it by themselves, and pay their way to actually broadcast themselves.

Good thread guys! It's nice to see a sensible grown up debate.

Sounds a bit fishy to me.

LOL - obviously I meant he sold his soul. I believe the sole was free as part of the deal.

It is a compulsory charge levied on all people who own a TV. Only the state has that basic power to coerce. It is a tax.

As for listening to the media over politicians - that's probably fair enough. I'd find more things in the Sun that were believable than what comes out of most politicians' mouths.


And I'm happy to argue that the government shouldn't simply be 'gifting' those things - ITV should have to pay for them.

they pay for them by having large PSB responsibilities.