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Monday, 21 February, 2000, 23:07 GMT
Q&A: Digital TV licence

BBC media correspondent Torin Douglas answers questions about the government's decision to scrap plans for a 24 digital TV licence.
The BBC had been asking for a separate digital fee but didn't get it - why not?

The separate digital licence fee was actually proposed by the government's independent panel on funding the BBC, chaired by Gavyn Davies. It said that, if that wasn't acceptable, the alternative would be an increase in the general licence fee.

Responding, the BBC said that, on balance, the digital licence fee would be fairer, because the extra money was to be spent on new digital channels and programmes. But the proposal was strongly opposed by commercial broadcasters, such as Sky, Granada and ONdigital, who said it would discourage people from taking up digital TV.

Culture Secretary Chris Smith told MPs that all viewers would benefit from the digital improvements, and he'd decided it would be wrong to charge digital viewers a special licence, because that would signal that digital TV was something special and only for the few.

The expectation is that the BBC needs to save more money to meet its ambitions - how will this be achieved?

The BBC has been told that over the next seven years it must find 1bn from "self-help" - a combination of efficiency savings, partnerships, joint ventures, reductions in bureaucracy and other means. It has said it accepts this "challenging target" and will soon come forward with its plans.

Some will come from the changes to be introduced by the new director-general Greg Dyke, who has said he wants to cut out layers of management and reduce the BBC's use of management consultants. The government rejected the panel's suggestion that BBC studios could be privatised, but there will be pressure on the corporation to make better use of its assets and property.

Will this mean greater expansion of the BBC's commercial wing?

Yes, BBC Worldwide - the commercial arm of the BBC - is already forming partnerships with commercial broadcasters and publishers, here and in the United States, to increase the corporation's commercial income. Some say the huge value being placed on e-commerce ventures makes the BBC's commercial on-line service,, potentially very lucrative.

Does today's announcement slow up the momentum of the corporation's move to digital services?

No, quite the opposite. The extra money is specifically intended to help the BBC invest in new digital channels and programmes, and "to ensure the BBC continues to act as 'a benchmark of quality' during the development of digital broadcasting services". But there will be reviews of all the BBC's digital services to ensure they are fulfilling the roles they were set up to achieve - following complaints from commercial broadcasters and some MPs that the BBC is expanding into areas already provided by commercial companies.

News 24 is facing a review - what will this involve?

Of all the BBC's digital ventures, News 24 has borne the brunt of criticism from commercial broadcasters such as BSkyB, newspapers like The Sun, and MPs on the House of Commons Culture Media and Sport Committee. They claim that News 24 is not needed because Sky News already provides a 24-hour news service without any need for the licence fee. News 24 will be the first of the BBC's digital services to be reviewed by the Department of Culture, to decide whether it is fulfilling a public service. The department will publish its criteria, and so will the BBC, for judging whether or not its services are "core public services".

The BBC says it's a "solid platform" on which to build, while commercial rivals say they're delighted. Who has most reason to cheer?

Gavyn Davies said the BBC had been on "a strict financial diet for many years". It's now got an above-inflation increase in the licence fee which will run for seven years - but the settlement still won't raise as much money as it said it needed and the "self-help" targets it must meet are very tough. The commercial broadcasters have won their battle to stop the government imposing a digital licence fee, and to make the corporation more accountable.

Both sides are pleased - but inevitably it's more important for the BBC. If the corporation hadn't got an above-inflation increase, the Davies Panel said, it would have been "consigned to a slow demise, trapped in a world of disappearing old technology". The people who've got least to cheer are the MPs on the Culture Media and Sport Committee, whose report said the BBC had failed to make its case for any increase. The government obviously disagreed.

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