March 29, 2021
In a wide-ranging Report, “The future of public service broadcasting”, the DCMS Committee concludes that the Government has left itself with no option on the licence fee, not least because it has failed to put in place the necessary broadband infrastructure that would facilitate other funding mechanisms.
As a result, the report finds, the Government must now act quickly to end damaging speculation about decriminalising non-payment of the BBC licence fee, since continuing uncertainty is likely to boost evasion rates and lead to a further drop in funding.
The report finds that Public Service Broadcasters (PSBs) are being let down by out-of-date legislation and calls for a new Broadcasting Act which would enable them to compete and thrive in a new media age with a right to prominence on digital platforms.
Key findings include:
- infrastructure delays: as a result of Government delays to full fibre broadband rollout, a wholly online public service broadcasting system allowing for universal access is not yet viable; while a significant amount of content is being made available online, during the current period of transition the interests of consumers who rely on linear TV must be preserved; future services would be likely to be delivered via the internet, however the present reality is that lack of access to broadband and lack of digital literacy skills could result in 1.8 million households losing television and public service broadcasting services if they were entirely internet-based;
- broadcasting legislation: the current law is no longer fit for purpose; MPs call on the Government to enact new legislation by the end of 2022 to replace the outdated Communications Act 2003, echoing a call from Ofcom for a new legislative framework; the Government has been too slow to act on Ofcom’s 2019 recommendations to update legislation on prominence, ensuring not only that public service broadcasting content remains easy to find for viewers on internet-connected services and devices but that it goes beyond the Electronic Programme Guide; as PSBs increasingly rely on third-party platforms such as social media to distribute their content in order to reach younger audiences, MPs call on the Government to broaden the Digital Markets Unit’s remit to consider whether the dominance of online platforms gives them “undue influence” over the ability of consumers to access public service broadcasting content, both online and through streaming;
- decriminalisation of licence fee: the BBC’s target of a 5.9% licence fee evasion rate was likely to be missed by a “significant margin” and the situation could be exacerbated by the Government’s failure to make a final decision on decriminalisation; Ministers should provide assurances that this unresolved issue will not be used as bargaining tool in ongoing licence fee negotiations with the BBC and S4C; to do so would risk undermining a core principle of public service broadcasting, that it should be removed from Government interference;
- funding: ensuring adequate funding is essential for PSBs to continue providing linear broadcasting, which remains crucial to older audiences, while also investing in on-demand services; for commercial PSBs, the Digital Markets Unit should address the lack of competition and regulation in online advertising;
- greater collaboration by PSBs: PSBs should do more to help themselves to attract digital audiences rather than wait for action by Government, e.g. “BritBox”, a joint venture by the BBC and ITV offering a subscription Video on Demand (VoD) service for UK viewers; PSBs should be allowed to collaborate to give them a better chance of competing in the crowded video on demand market; PSBs should explore options for collaboration on a single VoD platform, and Ofcom should support PSBs in this endeavour.
- BBC licence fee: the inquiry considered a number of alternatives to the BBC licence fee to support public service broadcasting, including models from Germany, Finland and Switzerland, such as household or individual fee, state budget funding, advertising, subscription and supplementary taxation; none of these was sufficiently better as a whole to recommend as an alternative.
The report makes various additional recommendations to Government, including:
- make changes to the regulatory structure to enable PSBs to innovate more rapidly and easily and to better compete online;
- find a strong alternative to the BBC licence fee or strongly support the current model for at least the next Charter period (2028 to 2038) and actively aid the BBC in driving down evasion;
- provide assurances that the issue of decriminalisation will not be used as a bargaining tool during the ongoing licence fee settlement negotiations with the BBC and S4C; and
- review the expectations set for PSBs.
The report also identifies concerns about the decline in local and regional news provision both by ITV and the BBC and calls on Ofcom to review the quality and relevance of the local and regional news provision, to be reported on before the new BBC Charter negotiations begin. To read the Committee’s summary in full and for access to the report, click here.