Television Licensing Fees, The BBC and the Ofcom Regulation - Essay Example

Assignment: Television Licensing Fees, The BBC and the Ofcom Regulation. Supervisor: To understand the structure of television broadcasting inBritain today, and the legal and financial circumstances of the BBC it is necessary to see it in its historical context, and within the current political climate. 1. The BBC. The BBC started life in 1922 as the “British Broadcasting Company”, an alliance of six electronic manufactures who were producing wirelesses – the earliest form of radio receivers. The companies came together to produce radio content to stimulate demand for their receivers. The group included subsidiaries of broadcasting companies in the US, where broadcasting had begun, under licence from the Department of Commerce. In Britain however all wireless telegraphy was controlled by the General Post Office, so the BBC operated under licence from the General Post Office. The BBC didn’t sell advertising, but did broadcast some sponsored programs. Their income came from the sale of wireless receivers, and from a charge of10 shillings(50p) per year from anyone using a "BBC" receiver. But some inventive listeners made their own wireless sets and listened to the programmes but refused to pay the charge. So to regularise the position, a government committee decided in 1923 that everyone with a wireless should pay the charge.  In 1927 the British Broadcasting Company was closed down and replaced by the British Broadcasting Corporation, an independent autonomous non-commercial organisation established by Royal Charter. Under this Charter the BBC maintained the licence levied on every radio and television receiver, and this licence is reviewed every ten years. The first Director of the BBC was John Reith, who more than anybody else is responsible for the public service ethos for which the organisation became famous. He strongly believed that it was the responsibility of a public broadcaster to educate, to inform and to entertain the nation. He was committed to giving equal voice to all points of view, and to high quality of production. He set the standard for national broadcasting which made the BBC the world leader it still is today. The precise meaning of public service broadcasting (PBS) has been difficult to define, but it includes a service that is available nationwide- from the centre of the capital to the furthest remote valley or offshore island. It endeavours to support and develop its audiences national identity and sense of community by displaying the political, cultural and sporting activities of the community. It caters to the tastes and interests of all the different social, political, cultural constituencies within a society. And it aims to provide a wide choice of high quality programming. In contrast a commercial broadcaster will have a different objective: to reach a wide audience of potential consumers, which advertisers will want to appeal to. In 1929 the BBC began experimental television transmissions, and by the mid 1930’s they were broadcasting a regular service. This was suspended in September 1939 with the outbreak of World War Two, because the television signal could be used by enemy aircraft navigation systems. The war also led to the centralisation of radio broadcasting – up to then BBC radio was broadcast from a number of region within Britain. The reorganisation of broadcasting during the war lead to the reformatting of the services offered after the war with the inauguration of the Home Service, the World Service, the Third Service and the Light Program, In the US television broadcasting began at the New York World Fair in 1939, and was unencumbered by wartime considerations. BBC began broadcasting again after the war in June 1946. At this time the newspapers and radio were still considered primary sources of news. BBC television broadcast cinema newsreels from its inception, replacing them with its own Television Newsreel in 1948. Interest in television as a medium for public events was realised in 1953, with the coronation of Queen Elizabeth II, prompting the sale of many receivers. But BBC did not begin live news broadcasts until 1955, just before the opening of ITV. In response to demand from advertisers the independent commercial network, (and despite the Beveridge Committee’s recommendation), ITV was launched in 1955, under the control of the Independent Television Authority (ITA). bringing competition to the BBC. Under the Royal Charter the Pilkington Review in 1962 decided that the BBC should launch another channel, (BBC 2). It also decided that independent commercial radio was not required, despite demand from a large number of registerd radio companies. In response to this a number of pirate radio music stations (starting with Radio Caroline) began broadcasting, which forced the government to reconsider and begin to licence independent commercial radio. This in turn prompted the BBC in 1967 to restructure its programming. The Light Program was spilt into Radio 1, (pop music) and Radio 2 (“Easy Listening”), the Third Service became Radio 3 (classical music and culture), and the Home Service became Radio 4 (News and other talk radio: documentaries, radio plays, quiz shows etc). They also launched a number of local stations. In 1972 the Independent Broadcasting Authority(IBA) was established to replace the ITA. The IBA was given the responsibility to regulate independent radio as well as television. The IBA was later replaced by the Independent Television Commission (ITC) (and the Radio Authority) under the provisions of the Broadcasting Act 1990, which themselves were replaced by the Office of Communications (Ofcom) at the end of 2003. In 1977 the Annan Committee on the Future of Broadcasting recommended the establishment of a second independent tv channel (Channel 4) as a Public Service Broadcaster. Annan also recommended a licence fee increase; long-term restructuring and diversification of broadcasting, privatisation of local radio; increased independent production; and independence from direct political control. Channel 4 and the increase in the Licence fee were the only recommendations acted on. Channel 4 began in 1982, and while it has been funded commercially it is still owned by the state. Its terms of reference have changed with broadcasting legislation, but it is still answerable to the national authority, now OfCom. Its remit includes the stipulations: that it be innovative, experimental and creative; that it cater for cultural minorities; that it include programmes of an educational nature and value. In 1986 in line with the neo-liberal economics of the day, the Conservative government under Thatcher sought to reduce or abolish the licence fee. The Peacock Committee on Financing of the BBC was established to look at advertising and other alternatives to the licence fee. However, Peacock recommended retaining the licence fee as the 'least worst' option; and that it should be indexed to inflation. They judged advertising as both economically and culturally damaging for the BBC and advocated a subscription service instead. They recommended that all television receivers should be fitted with encryption decoders, and they anticipated that by the end of the 20th century technology would have developed to the stage where the broadcast market could operate without any state intervention, like the print media. They recommended that the ITV franchises be put out to competitive tender; and that at least 40% of the BBC’s and ITV’s output should be sourced from independent producers. They also recommended the privatisation of Radio 1 and Radio 2. The recommendations Peacock Committee lead to the Broadcasting Act 1990 which established BBC Enterprise, a commercial arm to engage in commercial activity. Thus it broke with the long held egalitarian ideal the PBS. In 1991 it launched BBC World Service TV News, a 24 hour commercial international channel, and in ’92 it entered joint venture with Thames Television and a US cable company Cox to launch UK Gold - commercial satellite channel. In the interests of financial transparency, the corporation was restructured under the 1996 renewal of the Charter. The licence-fee funded PSB activities continue under the direction of BBC Home Services, while its commercial activities come under the umbrella of BBC Worldwide Ltd. In the lead up to the 2006 Charter renewal the BBC embarked on another round of cost-cutting, restructuring, and proposals to supplement the licence fee, including the introduction of ‘Window of Creative Competition’, a scheme to allow independent companies to compete against in-house depeartments for commission, which was expected to increase the level of independently produced programming to 40%. . (Debrett, pp39-41) Ofcom In 2002 the Office Of Communications Act established the Office of Communications (OfCom) as the regulator for all the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services, replacing five regulators: the Broadcasting Standards Commission, the Independent Television Commission, the Office of Telecommunications, the Radio communications Agency and the Radio Authority.  There had been changes and mergers of communications regulators before, and there have been a number of new regulators created over the years. However, Ofcom represented a departure from much of the UK public sector norm; a regulator in the form of a statutory corporation, independent of Government, covering the whole sector of electronic communications, and organised around a model which owes at least as much to private sector as to public sector precedents.  Ofcom are accountable to Parliament, and are involved in advising and setting some of the more technical aspects of regulation, implementing and enforcing the law. Ofcom is funded by fees from industry for regulating broadcasting and communications networks, and grant-in-aid from the Government.  Their statutory duties are: (a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition. Ofcom’s specific duties fall into six areas: 1: Ensuring the optimal use of the electro-magnetic spectrum 2: Ensuring that a wide range of electronic communications services “including high speed data services” is available throughout the UK 3: Ensuring a wide range of TV and radio services of high quality and wide appeal 4: Maintaining plurality in the provision of broadcasting, 5:;Applying adequate protection for audiences against offensives or harmful material 6: Applying adequate protection for audiences against unfairness or the infringement of privacy. Ofcom is required by Parliament to review the quality of public service broadcasting at five year intervals, and to make recommendations about how its quality can be maintained and strengthened. In doing so, our focus is on audiences’ needs: both understanding them, and ensuring they continue to be met as sweeping changes take place in the new media landscape. Viewers nowadays have access to a much wider range of content than ever before, on digital TV and online. Multichannel broadcasters now make a significant contribution to public service content, particularly in sport, entertainment, archive and acquired programming, and in one case, news. But Ofcom has found that they provide very little original programming in the genres under most pressure on commercial public service channels – current affairs, nations and regions programming, challenging UK drama, UK scripted comedy, and UK drama and factual programming for children. This is unlikely to change as provision of the commercial PSBs declines, because most multichannels do not reach the audiences required to justify large and risky investments in these areas and will themselves face increasing economic pressure. The possibility exists that new digital and online media can provide the public service content needed. But Ofcom’s assessment indicates that online business models remain highly uncertain, especially for programmes already under pressure on commercial television. Furthermore Ofcom doubt that such content will have the reach and impact of television for some time to come. The BBC and Channel 4 may have roles to play in future in introducing audiences to a wider range of public service content from other providers. But given the ongoing uncertainty about the rate of evolution of the market, Ofcom believe there is a need a more flexible model of intervention that focuses public funding on areas in which the market cannot deliver and recognises these may change over time. The Television Licence: The licence fee has provided the BBC with a secure income throughout its 90 year history, enabling it to provide a considerable amount of high quality indigenously produced programming, for radio, television and the interne. The licence fee is levied on all television receivers, and is subject to review every decade during the renewal of the Royal Charter. The perceived advantage of a licence fee from individual viewers and listeners is that it protects the broadcaster from the uncertainty of a government grant. Between 1969 and 2009 the fee has increased from ?10 to ?142.50 An Ofcom report in 20011 found that the vast majority of listeners and viewers, including owners of digital television equipment, approved of the licence fee to fund public service television and radio. Their reasons included variety, high quality, education, innovation, entertainment, information, original productions, pluralism, accessibility, inclusion of minorities and free access.   Other supporters of the licence fee believe that it allows the BBC to maintain independence from political or commercial pressures. However there has not been universal acceptance of the charge. It is argued by some that a licence fee to fund PSB is justifiable, but that the BBC spend most of their budget to produce program material to compete with their commercial rivals; that only a small percentage of their budget goes towards programs that genuinely fulfil their PBS remit. In other word that they could provide a genuine service of material not available elsewhere for a fraction of the current licence fee. A 2005 Green Paper2, included cost, value for money, whether or not the BBC should be publicly funded, the high cost of collection and enforcement and the methods used. Meanwhile, in 2004, the Institute for Public Policy Research3 argued that the TV licence fee has a regressive impact, in that it represents a much higher proportion of income for poor households, that evaders are most likely to be single parents, lone tenants, pensioners and the economically inactive and that the difficulties they have in paying the licence fee are compounded by the penalties enforced for non-payment. In 2004, the BBC’s current affairs programme Panorama, commissioned a report4 concluded that only that 31% favoured the existing licence fee system. According to this report 36% believe the BBC should be paid for by a subscription while 31% wanted advertising to pay for the programmes. In August 2008, the Guardian newspaper reported that "The BBC is facing an uphill battle to maintain support for the licence fee", stating that according to an Ipsos MORI5 poll the newspaper had commissioned, 41% agreed that the licence fee is an "appropriate funding mechanism" and 37% disagreed but when asked whether the licence fee is "good value for money", 47% disagreed, with more than half of them disagreeing strongly. The poll also showed that there is no longer a majority believing that the licence fee assured them of distinctive programming not available elsewhere ? which, the newspaper said, had long been one of the arguments for its existence: 41% of the population disagreed with only 30% agreeing. The poll also showed that opinion was split by a growing north-south and socio-economic divide. In September 2008, the BBC's governing body, the BBC Trust, launched a review6 of TV Licensing's methods, following complaints about "heavy-handed" and "intimidating" tactics. In September 2009, The Guardian reported an ICM7 poll showing an increase in support for the license fee to 43%; "The fee is backed by 43%, against 24% who think advertising should foot the bill and 30% who think people should pay to subscribe if they want to see BBC programmes. In 2004, only 31% backed the licence fee, 12 points lower than today.". Last September (2010) the BBC under pressure from OfCom and the government has agreed to forego a Licence increase due in March 2010. It will freeze the licence fee at ?145.50 until 2013, but warned that it is likely to mean cuts in TV and radio programming budgets. The government has repeatedly made clear that it wants the corporation to recognise the difficult economic environment and sacrifices being made elsewhere in the public sector. The BBC is giving up a planned 2% increase in March next year and the chance of a smaller rise in 2012. The recent rise of multi-channel digital television has led to criticism that the licence fee is no longer justifiable because that minority interest programmes can now be transmitted on specialist commercial channels, and that the licence fee is funding a number of digital-only channels which many licence holders cannot watch (for example BBC Three and BBC Four). These various technologies for receiving visual material now question the justification for a licence fee based on television receiver ownership when a television is no longer the sole medium over which the BBC distributes its content; and these technological changes have led the Department for Culture, Media and Sport to state in 2005 that the collection of a fixed charge based on television ownership may become difficult to sustain. An ironic twist of the reason the licence was first introduced 90 years ago. Debrett, Mary,Reinventing Public Service Television for the Digital Age. intellect Bristol, UK/ Chicargo, USA, 2010 2807 words + references Read More