BBC struggles with how to fund quality TV

Greg Dyke, the incoming director-general of the British Broadcasting Corporation (BBC), has told friends that he likens his future task to "taking a long swim in shark-infested waters."

He has to lead the world's pioneer public-service broadcaster into an era of intensifying commercial competition and escalating technological change. And he has to do it in the face of influential critics who say that, after 77 years in business, the BBC should be deprived of its privileged status and made to compete with its rivals on equal terms.

Unlike the Public Broadcasting System (PBS) in the United States, which depends heavily on private donations, the BBC derives its revenue from an annual television license fee (about $160) paid by everyone who owns a TV set. This removes the temptation of cozy deals with business donors, or making dubious "arrangements" with political parties.

Such doings surfaced in May of this year in the US when WGBH-TV in Boston, a PBS station, admitted it had sold a donor mailing list to the Democratic National Committee (DNC). This led to the revelation that approximately 30 of the 349 PBS stations in the United States were also involved in this practice with both the DNC and the Republican Party. While the Corporation for Public Broadcasting is putting an end to this exercise by vowing to cut off funds to any station continuing its mailing list sales, the matter is being pursued for possible federal tax law violations. These events also brought to the fore the question of whether public broadcasting should continue to be supported by taxpayers.

The BBC's TV-set fee boosts its sense of independence and adds to its confidence as a servant of a public that has long been used to calling it "Auntie."

Mr. Dyke is taking the helm at the BBC at a moment of considerable peril, says television critic Christopher Dunkley.

"The license fee is the great symbol of the BBC's independence from the government and from commercial pressures, and by far the largest source of its revenue, but many see it as an unfair tax," Mr. Dunkley says. "Viewers have to pay it even if they never watch BBC programs."

For incoming director-general Dyke, justifying the license fee has been made even tougher by the recommendations of a government-appointed committee.

On Aug. 5 the committee, headed by Gavyn Davies, a leading economist, recommended a license fee increase of about $38 a year for anyone operating a TV set equipped to receive digital channels. The new charge, which the BBC plans to use to develop its own digital and online services, was immediately assailed by commercial broadcasting companies.

Clive Jones, chief executive of Carlton TV, which serves London, called it a "digital poll tax" that would "discourage many people from investing in digital equipment."

Unimpressed by the complaints, Sir John Birt, the BBC's outgoing director-general, said that the increase should have been three times as large "to fund the range of programs, including a new family channel we intend to broadcast digitally."

Recent series such as Jane Austen's "Pride and Prejudice" and the hugely successful "Teletubbies" for children have displayed the BBC's ability to produce a broad range of high-quality programs.

The BBC continues to draw large audiences. Some 13 million viewers watched the recent solar eclipse that passed across southwest Britain on BBC television, compared with only half a million who watched Britain's commercial television networks.

Lately, however, the BBC has been having trouble holding its own in a key arena it used to dominate - sports.

Rupert Murdoch's Sky TV and groups of commercial companies have succeeded in buying exclusive rights to live soccer and rugby coverage and Formula One auto racing. To outgoing director-general Birt's dismay, commercial Channel 4 outbid the BBC this year for rights to broadcast international cricket.

So far, the BBC has been able to stave off attempts to end its exclusive right to telecast that most quintessential of English sporting events - the annual Wimbledon tennis tournament.

Money, of course, is at the root of the BBC's problem, and that seems likely to remain so. Despite Birt's complaints, Mr. Davies says his committee's recommended license-fee increase is "fair." What worries Dyke and other top executives are unpalatable conditions attached to the increase: an independent auditing of the BBC's $3.5 billion annual revenues (currently the BBC audits itself) and a sale of half of its studios and technical equipment to the private sector.

Davies argues that to justify a higher license fee, the BBC must accept "public scrutiny of the way it spends money that comes from the public." And he says revenues from shedding technical infrastructure will help it to defray the costs of digital programming.

But the BBC sees Davies's ideas as the thin end of a wedge that will squeeze the corporation to the margins of broadcasting.

Sir Christopher Bland, BBC chairman, claims that outside auditing and the sale of infrastructure would "threaten our independence, which is the envy of the world."

A final decision on the Davies recommendations is due to be made this fall by Chris Smith, the government's culture secretary. He is widely expected to accept the main proposals.

Although it faces a challenging future, the BBC does not lack dedicated supporters. Stephen Whittle, director of the Broadcasting Standards Council, an independent body that monitors program quality, says the corporation is "a vital piece in democracy's jigsaw. There is justice in its claim to be one of the key contributors to the cultural life of Britain."

But the London Times, which is owned by Mr. Murdoch, commented editorially Aug. 6 that the license-fee supplement was unfair, noting that Murdoch's Sky TV had invested millions of its own money in digital equipment. The BBC, the paper said, would "rather thrust out the begging bowl and demand unconditional support than open itself up to appropriate scrutiny."

As Dyke prepares to go swimming for Auntie, there are plenty of dangers lurking in the water.

(c) Copyright 1999. The Christian Science Publishing Society