BBC licence fee remains, alongside subs trials

The UK government has committed to retaining the current licence fee model of financing the BBC for the coming eleven-year Charter period, while pointing to a number of areas where a subscription model could be trialled.

The government has said it will “modernise the current licence fee system to make it fairer” including closing the ‘iPlayer loophole’, introducing more flexible payment terms for lower income households and enabling the BBC to make its content portable so that UK licence fee payers can access iPlayer while travelling to other EU member states.

The changes proposed by the government could include the ability to charge international viewers to watch iPlayer content through user verification.

“The government thinks there is a case for iPlayer to require verification – i.e. access should be conditional upon verification of licence fee payment – so that individuals in other countries, and those in the UK not paying the fee, cannot access licence fee funded content for free. The government will discuss verification and other options with the BBC and look at the best way of implementing this, including through regulations if needed. It will be up to the BBC to determine whether this is an appropriate means of charging international viewers,” it said.

While rejecting a subscription model overall, the government said it welcomed “the BBC’s commitment to develop and test some form of additional subscription services during the first part of the next Charter period, and to consider whether elements of subscription could provide a more sustainable funding model in the longer term”.

It said subscription would be introduced “for additional services only”, adding that the “BBC may therefore lead further developments, pilots and exploration of elements of subscription in the second part of the Charter period, if justified and required, in order to inform the next Charter Review process and for potential wider roll-out in the next Charter.”

The licence fee will be increased in live with inflation for five years from 2017-18.

Other key measures in the White Paper, many trailed in advance of publication, include the creation of a unitary board to replace the BBC Governors and the BBC Trust. The BBC will be responsible for appointing “at least half” of the board members.

The White Paper also calls for Ofcom to be made the external independent regulator for the BBC, while the National Audit Office will become the BBC’s financial auditor. The remuneration for BBC talent that is paid over £450,000 (US$650,000) will be made public.

The BBC Executive will set strategy and deliver services, while Ofcom will issue licences and regulator editorial standards as well as regulating commercial activity and market impact and will monitor and review performance.

The BBC Trust welcomed the proposals but expressed concern “that in some areas the government’s proposals to protect the BBC’s independence do not go far enough”. It said it was crucial that the new board should be independent. It said that the chairman and deputy chairman should be appointed by the government through an independent public appointments process.

“We recognise that the government has moved, but we need to debate these issues to ensure the arrangements for the board achieve the correct balance of independence, public oversight and operational effectiveness.  We believe there is more than enough time to get this right, and we will continue to discuss this with the government,” said BBC chairman Rona Fairhead.