Every household in Great Britain should purchase television license to watch television transmission. It is free for people after 75, and half-cost for registered blinds. Television license is equal to tax and watching TV without license is considered as a crime. Without license it is allowed to watch pre-recorded content or use monitor for video games. All types of TV broadcasting through Internet, cable, or satellite, require license. Initially television license was aimed to support TV and radio channels of BBC, but now it is required for watching all channels including commercials. BBC is a principal public service broadcaster in the United Kingdom. Approximately 95% of the UK residents use BBC every month. Many people were ready to pay for BBC license and to support main national broadcaster. However, nowadays more and more people oppose paying for TV license.
The objective of this paper is to collect and review pros and contras of BBC license fee.
BBC is not only entertaining company. Numerous BBC channels create so-called British way of thinking in viewers. Besides, due to BBC broadcasting in other countries the company is a significant component in UK diplomacy. According to many conservative politicians, BBC programs do important work promoting British values all over the world. It is the most powerful method of conveying educational and political messages to the public. Such important function cannot be controlled by private investor because it is a great power. Every private investor would like to use it for its own good.
The proper measure of control is necessary to guarantee the high standards. The examples of commercial channels show that the efforts to attract new customers and keep the existing audience interested often lead to the flow of low-quality soap operas and dull comic shows. Besides, government control should guarantee the equal access to broadcasting for all political parties.
Absence of commercials
Television license is a kind of tax in different countries. TV channels have not so many ways to get money for broadcasting. There are two main ways: collecting money for licensing, and getting funding from radio and television commercials. People usually don’t like commercials because advertising interrupts their favorite programs and take rather long time. Thus, funding from TV license collections allows avoiding or minimizing the commercial content on TV, and run a wild range of popular public services independently of advertisers, shareholders, and political interests.
The system of funding BBC from license fee collections is rather old and stable. Abolishment of licensing can kill this system. BBC broadcasts 8 common channels, many additional channels, internet TV, and even some learning services for adolescents. Official web site of BBC informs that TV license fees are used for:
- «the television channels BBC One, BBC Two, BBC Three, BBC Four, BBC News, BBC Parliament, CBBC and CBeebies;
- five network radio services, and digital radio services BBC Radio 5 Live Sports Extra, BBC Radio 1Xtra, BBC Radio 7, BBC 6 Music and BBC Asian Network;
- regional television programmes and Local Radio services in England;
- national radio and television in Scotland, Wales and Northern Ireland;
- BBC Red Button, BBC Mobile and the BBC website (bbc.co.uk). (BBC, 2011) »
Thus, the country can lose something more than just a main national broadcaster. Nowadays there is no well-developed and widely spread TV channel, which is able to replace BBC.
BBC is not for open market
Such large broadcaster as BBC is not the subject for open market. BBC safeguards and transmits national culture. National culture is not the object of trade on free market.
Government control on main broadcaster contradicts democratic values
Nowadays different technologies of communication support freedom of speech in every country. However, government control on main public broadcaster allows government to control and to censor the content of TV programs. The example of different countries shows that government can manipulate people using TV programs. Thus, government control on broadcasters should be removed.
TV license is unfair from the business point of view
Many people think that BBC collects license fee under the threat of fear and extreme retribution. Many discussions in TV talk-shows and internet channels show that people consider possibility of fine, court proceeding and prison sentences for watching TV without license as a threat. Other business cannot use the same tactics to attract customers. For example, McDonalds cannot threat buyers to fine them for reject of buying hamburgers, Probably this argument is slightly exaggerated, however, the fact is many people don’t like the method of TV licensing.
Conflict with other organizations
BBC broadcasts some major sport events. After paying licence fee, these sport programs can be viewed for free. However, it contradicts the interests of sport associations. From the business point of view it reduces the competitiveness of sport organizations on free market.
Bribery, corruption and Fraud at the BBC
Scandals related to BB regularly appear in media. It is obvious that top-management of BBC is totally corrupted. It would be reasonable to stop paying for this illegal action.
Free Radio broadcasting
BBC is TV and radiobroadcaster. SO, many people think they pay for both TV and radio license. However, this is a mistake: there is no license needed for listening radio. Many people don’t see the necessity to pay for TV broadcasting because radio broadcasting is free.
Commercials are not so annoying
One of the main arguments in support of TV licensing is that TV license allows making TV free from advertising. However, recent data shows the advertisement on TV is not so annoying for people. Few years ago people on different countries were proposed to pay for special service «ad-free». These technical innovations allowed watching TV without commercials. However, the demand on this service was significantly lower than it was forecasted. Thus, analytics conclude that TV advertising is not so annoying for many people.
BBC has other sources of revenues
License fee collection is not the only source of revenues for BBC. BBC collects revenues from four main sources: license fee collecting, government grants, commercial services, and some other incomes, like concert tickets sales and providing content for foreign broadcasters. The income from commercial services and government grants allow keeping the license cost low. However, some people see the paradox here: taxpayers pay twice for TV broadcasting. First time they pay for license, and second time they pay taxes, and BBC gets this money in the form of government grants. Hot debates regarding this subject prove many people consider this unfair.
Unfair taxing policy
Most of taxation systems are aimed on getting more taxes from the highest incomes. TC licenses are paid by each household. In this way the main share of TV license fee collections is paid by low-income families. People consider this system as unfair and outdated.
Licensing requires significant operational costs
Approximately 10% of license cost is used for collection and transmissions costs. Thus, in reality BBC gets only 9\10 of license fee collection. From the business point of view such operational costs are too high and the system should be modernized immediately.
License fee is outdated system
Many people think that in the age of multi stream, multi-channel availability the necessity to pay license fee is inappropriate. People are ready to pay for TV, but they just want to see renewed system of taxation.
In 2004 Institute for Public Policy Research provided a poll regarding the BBC funding. The results of this poll show that 71% of the UK residents want to change the method of BBC funding. Thus, people are not satisfied with current situation and want to change it.
Latest news regarding TV license
In October BBC director general Mark Thompson confirmed that BBC license will be frozen for next six years at £145.50. This news together with some other minor changes, for example, taking costs BBC Monitoring, means that over next six years BBC funds will be cut of 16% real terms. Besides, it means that BBC top-management is ready for reforms. The arguments mentioned above show that the funding of BBC should be reviewed for some years ago. Representatives of BBC confirm the deal and provide positive comments about it. Thus, George Osborne told the Commons that “To ensure that the cost of these new obligations is not passed on to the licence fee payer, the BBC has agreed a funding deal for the full duration of its charter review.” (BBC, 2010).
BBC Trust chairman Michael Lyons said: “The BBC is not government funded, but these are pressing times for the nation as a whole and we believe licence fee payers would expect us to see what contribution we can properly make.”(BBC, 2010)
Despite thus changes in licencing were necessary for long ago the proposition of BBC was severely criticized by some opponents. For example, Gerry Morrissey, general secretary of broadcasting union Bectu, accused the BBC of “doing the government’s dirty work”. (BBC, 2010). He claimed this is impossible to cut 16% of costs without affecting services and jobs. He thinks BBC is in the deep crisis now and only government support can help the national broadcaster to service.
The importance of BBC broadcasting in the United Kingdom can hardly be argued. BBC is a main national public service broadcaster; total majority of the UK residents uses BBC regularly. BBC is not only entertaining broadcaster, it also has significant ideological value. Many people are ready to pay for BBC. However, the system of TV license seems to be outdated. Opinion polls show the majority of UK residents want to change the BBC funding. Arguments against TV licence are numerous, and they seem more reasonable than arguments for BBC TV licence. Last year BBC management decided to frozen BBC licence for six years. This decision is also the object of severe criticism. However, it shows that top-management of BBC is at last ready for reforms.
«TV Licence Fee: facts & figures». BBC press office, April, 2010. Retrieved from http://www.bbc.co.uk/pressoffice/keyfacts/stories/licencefee.shtml
«Television licence fee to be frozen for next six years». BBC News. 20 October, 2010. Retrieved from http://www.bbc.co.uk/news/entertainment-arts-11572171
«Majority ‘want change to TV fee». BBC News (BBC). 6 March 2004. Retrieved from http://news.bbc.co.uk/1/hi/entertainment/tv_and_radio/3537567.stm.