U.K. Committee Cites Government Failure in License Fee Reform

A new report by the U.K.’s Digital, Culture, Media and Sport Committee (DCMS) has concluded that the BBC will have to continue to rely on the TV license fee, in part because the government has “failed to put in place the necessary broadband infrastructure that would facilitate other funding mechanisms.”

The DCMS report on the future of public-service broadcasting says the U.K. government must act quickly to end speculation that nonpayment of the license fee will be decriminalized, arguing that uncertainty will lead to increased evasion rates and as a result lower income.

The report criticizes the government for letting pubcasters down with out-of-date legislation and calls for the creation of a new broadcasting act that would “enable them to compete and thrive in a new media age with a right to prominence on digital platforms.” The report calls for the enactment of a new broadcasting legislation by the end of 2022, backing Ofcom’s view that the Communications Act of 2003 needs to be replaced.

DCMS is also calling on U.K. public-service broadcasters to collaborate more, citing BritBox as a compelling example. It recommends that pubcasters explore options for working together on a single VOD platform.

DCMS Committee Chair Julian Knight MP said, “It’s clear that the BBC TV license fee has a limited shelf life in a digital media landscape. However, the government has missed the boat to reform it. Instead of coming up with a workable alternative, it has sealed its own fate through a failure to develop a broadband infrastructure that would allow serious consideration of other means to fund the BBC. Not only that, but the government is effectively allowing the BBC to hemorrhage funds through non-payment of the license fee as a result of continued speculation over decriminalization of license fee evasion, a situation it must bring to an end.”

Knight continued, “To enable public-service broadcasters to compete in a digital world, ministers must renew broadcasting laws that are nearly 20 years out of date. It’s a question of prominence—too often public-service broadcasters lose out on dominant platforms with content that’s hard to find or isn’t branded.”

Knight also said that public-service broadcasters in the U.K. should be “doing for themselves and only by pooling resources can they hope to compete with the likes of Netflix and the platforms. The collaboration by the BBC and ITV on BritBox is a striking example of how they can work together to create a ‘one-stop shop’ for video-on-demand content—a model for future work.”

Per the report, because the government has not yet delivered a full fibre broadband rollout, public-service broadcasting that is universally accessible online is not yet viable. “While a significant amount of content is being made available online, during the current period of transition the interests of consumers who rely on linear TV must be preserved,” DCMS says. “Future services would be likely to be delivered via the internet, however, the present reality was that lack of access to broadband and lack of digital literacy skills could result in 1.8 million households losing television and public service broadcasting services if they were entirely internet-based.”

The DCMS calls for the government to support the current license fee model for the next charter period of 2028 to 2028, or put to Parliament a strong alternative, while also actively aiding the BBC in lowering evasion rates.