This is the text of an article published by the Journal of the Royal Society of Arts.

This was published in 2002 and within a few years its predictions were proved correct. ITV faced takeover after its share price had collapsed and an IpsosMori poll showed public support for the BBC licence fee had dwindled so fast that by 2008 almost as many opposed as supported it. Ross's views had become mainstream and political thinking had shifted strongly in favour of subsidising public service braodacasting - on any channel - rather than the BBC as such.

RSA Journal 1|6 2002

Opinion .....Licensed to bill
Nick Ross calls for a debate on public service broadcasting

The Wireless Telegraphy Act of 1904 specified that all transmitters and receivers of wireless signals must have a licence issued by the Post Office. Nobody much dissented and even champions of free enterprise extolled the wisdom of top-down regulation; when the BBC was founded (with a staff of four) in 1922 The Economist, like most of the press, opined that "without a shadow of a doubt" broadcasting had to be run as a monopoly.

A hundred years later the BBC faces volatile competition on all sides - and yet it still remains something of a heresy to question the idea of a licence fee. With very few exceptions public funding has been challenged only by those who did not have the BBC's best interests at heart. Yet with the broadcasting landscape changing fast there must be room for an open-minded public debate sponsored by those whose passions are rooted in the public service ideal.

I do not pretend to have easy answers, but at least let us pose the questions in the open. The RSA is well placed to open up the issue given that so many other institutions have vested interests in keeping things quiet. The BBC and most other broadcasters feel cosy with the status quo and politicians have enough on their plates without confronting one of the most formidable lobby groups in Britain.

First let me make my own starting-point plain. I am a long-standing contributor to, and fan of, the BBC. It has been a beacon in world broadcasting, it still provides high-class programmes, can still triumph in the ratings, and still retains the affections of the overwhelming majority of licence payers. It wins 40% of TV audiences and over 50% of radio listeners. All this is a tribute to the management, staff and contributors.

But the licence fee is not the only cause of their successes, nor the only guardian of their integrity and skills. There are alternatives, and there may be ways of retaining the best of the present system while carefully migrating to different forms of funding. Radios and televisions began as luxuries owned only by enthusiasts and the better off and the BBC was paid for only by those who chose to use it. The licence fee was never intended to be a charge on everyone to the tune of £2½ billion every year. Unless we ventilate the arguments, one day the TV licence may suddenly seem an archaic poll tax, and the BBC may face a precipitous loss of income.

There are several factors that make change certain; it is only a question of timing. The licence fee will progressively create political problems, drawbacks for the Corporation, and disadvantages for the concept of public service broadcasting.

The political problems will grow because the BBC, on its relatively fixed income, will occupy a progressively smaller part of the broadcasting firmament. A universal and regressive imposition, designed for a highly regulated near-monopoly environment, simply cannot be sustained for ever in a world where channels are as ubiquitous as books or magazines. Indeed:

"The 1996 Broadcasting Act set a framework for the provision of some thirty-odd channels, a development which in itself must raise questions about government's regulatory rôle, since it voids the argument that a scarce resource (the airwave spectrum) needs to be centrally managed. Given that there is no central regulation of the press, what justification can there be for the central regulation of a broad range of broadcasters?"

The Corporation, meanwhile, which most people imagine luxuriates in the sheltered cove of State-enforced subsidies, in fact is becalmed. Following its last successful licence fee negotiations it seems unlikely that any future government will boost the licence fee much faster than inflation, so the BBC cannot grow. While its commercial rivals can make money on successful products and services, and can thereby raise more money to invest and grow, generally the BBC can only spend money. Even where it tries to break out of this straightjacket and top up the licence fee through entrepreneurial flair, its ability to make serious profits will be constrained by rules of fair competition.

Perhaps most depressing are the implications for the BBC's public service remit. In order to sustain the argument for the levy the Corporation has to demonstrate that it attracts huge audiences, especially to BBC ONE - yet this is strikingly similar to the pressure on commercial broadcasters like ITV.

There are still those who do not believe that broadcasting is undergoing a revolution. They argue there is no appetite for hundreds of new channels and that audiences will continue to gravitate to the orthodox players. This view is mostly held of television (rather than radio) but then Britain has always had a slightly puritanical view of the box. Each successive innovation has been greeted with scornful predictions of failure. Yet ITV confounded the prophets of doom to become "a licence to print money", BBC-2 and Channel 4 developed into mainstay networks, Channel 5 has survived and is growing in stature, cable now reaches into over 3½ million homes, terrestrial digital goes to 1¼ million, and BSkyB's satellite TV, the most disparaged gatecrasher of all, is now directly subscribed to by 5½ million UK families.

That means half the population now lives in "multichannel homes" and approaching 40% of all households already have digital, yet some people still have their heads in the sand. They scorn the diversity or wonder how on earth anyone could want to have such choice. Famously (though perhaps anecdotally) an early opportunity to get into radio broadcasting was rejected by an American company on the reasonable grounds, "Who on earth would want to listen to a message sent to no-one in particular?" Now, in effect, Luddites are asking, "Who on earth would want to watch programmes tailored to their own tastes and at the times that are most convenient?"

Where once spectrum was scarce now we are now competing for people's attention. It is not just that there are increasingly more channels, there is a revolution in which control is passing from producers to consumers. Surreptitiously the very definition of broadcasting is beginning to come undone. Perhaps the remote control handset was the first symptom of this democratisation. Remotes started as a simple button (the early models provided only on, off and volume) but effortless programme-switching soon gave birth to channel-hopping, a phenomenon despised by producers but which emancipated viewers.

At first the transfer of power was almost imperceptible. Domestic video-recorders allowed time-shifting but soon gave people the chance to produce and import material not made by the orthodox broadcasters, including movies, corporate communications, sports highlights - and pornography. The new digital recorders, like TiVO, are even more transforming, allowing you to stop "live" programmes (for example to answer the phone) and restart them at will. In fact a BBC survey found most TiVO owners watch TV, "off the box rather than off the air". Moreover with TiVO you can cut out the commercials, so undermining the very basis of channels like ITV. DVDs represent a new distraction, and with cable or satellite you get not just extra channels but can call up a movie or a sports event and have it beamed into the home on demand, just like ordering a pizza. In fact you can even do that too.

All these new technologies are gradually weakening the hold of the traditional television channels. We can follow episodes of The Simpsons from BSkyB to BBC and effortlessly back again, or watch them on video or DVD. Our brand allegiance is switching from channel to content. As Greg Dyke put it, "It's the programmes, stupid."

In fact the very concept of television is being undermined. Games consoles have become squatters in the TV set and the box has itself is being complemented by a range of other screens from Gameboys to mobile phones. Increasingly the BBC will have to measure itself against software companies like Eidos and Electronic Arts and players we have not yet heard of. Above all there is the pervasive influence of personal computers. Even as stand-alone devices PCs are a big distraction from television or radio, but when connected to the Internet they trespass heavily on the domain of conventional TV, providing access to all sorts of services (not least news) that were once the very stuff of conventional broadcasting. Some 26% of homes have computer games and 39% have Internet. The BBC was one of the first to recognise this trend and, moreover, that this is truly part of the broadcasting domain, and has created one of the world's most successful websites.

Now that radio, television, computing, photography and telephony are converging round a common technology their applications are merging. Thus, for example, you can watch TV or listen to radio on a personal computer and we are only near the start of the digital revolution. Who knows how quickly broadband and improved compression techniques might make television just another component of the Internet? The very idea of a stand-alone television is under assault. Mark Thompson, last year when Director of BBC TV, acknowledged: "Digital television changes the argument for every public service broadcaster, no matter how resilient." It is time, he went on, "to think the unthinkable".4

Yet this may not be the earthquake, just the pre-shock. In the twentieth century broadcasting was largely one-directional - producers made the programmes, audiences watched and listened. But with cable, signals can be sent in both directions, and plugging radios, TVs, games consoles or PCs into phone lines has the same effect. We now have electronic programme guides, email, shopping, banking, and betting opportunities, games, and choices of camera angles. Already youngsters are much more active couch potatoes than their parents, with an appetite for directing the action, not just passively watching someone else's show. The outcome of the second series of Big Brother was determined by 17 million votes, almost a third of which were cast through Sky Open. Similarly Nigel Lythgoe, executive producer of Pop Idol says audience participation is the key to its success. Interactivity seems bound to grow and may be more transforming than we know.

Perhaps more radical changes will take decades. Perhaps debate about the licence fee is premature. Perhaps. But even in the aftermath of the bursting dot-com bubble investment in these new media is rocketing.

Figure 1 shows broadcasting revenues from1996, and it does not need a genius to see that a BBC dependant on the licence fee will become a smaller and smaller player. These are just the orthodox broadcasters. Add to that rocketing top line over £1.5 billion in 2000 for sales and rent of video and DVD (which account for almost three times the receipts at cinema box offices ), some £1 billion for interactive leisure software8 and a share of the £36 billion Internet and computer industry and you get a starker measure of how the BBC's hold over electronic media income is getting left behind.

With so much competition the BBC is doing well to hold off audience decline but the writing is on the wall. Television producers now tend to talk less of audience numbers, which are disheartening because they are declining, and more in terms of "share" (the proportion of viewers watching television sets at the time) which is much more encouraging because the audience always totals 100%. Even then Figure 2 shows a dispiriting trend.

The plunge in ratings has been most serious for ITV whose revenues come largely from advertisers aiming for big audiences. An ad in a programme watched by 20 million people reaches 20 million potential customers with one punch (give or take those with TiVO or who put the kettle on during the commercials), but two spots each reaching 10 million viewers leave gaps and overlaps. With fewer smash-hit shows the mass-audience USP of ITV is weakening. Things are worse in multichannel homes where ITV's audience share has dropped from 27% to 20%. In the US advertising rates were resilient for a while as cable networks nibbled away at the big networks, but Simon Marquis, chief executive of Zenith Media one of the biggest media buying agencies, puts it starkly: "There is no doubt that the erosion of ITV is more or less a one-way street. The only real question is how much ITV can slow it down."

Yet for viewers these changes are mostly a boon. True, television is rarely a family activity as once it was (and as radio was in the early days), but there is so much choice and - here's the rub - so much quality. Yes, I know it is fashionable to decry falling standards in broadcasting, but even nostalgia isn't what it used to be. In the good old days praise was often grudging too ("the least worst television in the world") and many of the old recordings look plodding and patronising now. In fact some best-quoted examples of past glories were not very attractive at the time. In 1969 Kenneth Clark's iconic series Civilisation was watched by fewer than a million people, less than a quarter of the viewers for David Sharkey's recent Six Wives of Henry VIII or Simon Schama's History of Britain. As independent producer Peter Bazalgette puts it, "Golden Age be damned."

But where does all this leave the BBC? Does more choice, more accessibility, more egalitarianism and more technical sophistication amount to better public service broadcasting? And is the BBC uniquely placed to spearhead programmes (and given the Internet, programs) which are informative and educative as well as entertaining?

The orthodox answer is yes. The BBC says so (though as Mandy Rice-Davies would remark, that is hardly surprising), and senior figures in Channels 3 and 4 will tell you that the BBC keeps them honest: it sets a shining example which counters base commercial pressures and allows them to make more philanthropic programmes. But of course, they too would say that, wouldn't they. The last thing they want to encourage is more competition where it counts, which is not just for viewers but for revenue. ITV's director of programmes David Liddiment has criticised the BBC for making programmes which could be made by the market (for which read programmes which are popular) but make no mistake, he, like most of the barons of commercial broadcasting, has a vested interest in keeping the status quo. Indeed, one of the arguments against scrapping the licence fee, as we shall see, is that there is not enough free market revenue to go round.

In any case there are other ways to promote philanthropy than through a tax on television ownership.

In fact the BBC has long been hard-put to define its unique public service characteristics.
For many years it proclaimed that its programmes were "distinctive" but the emptiness of that expression speaks volumes. The truth, the quiet truth, is that in television at least what counts is bums on seats. Lorraine Heggessey, the Controller of BBC ONE, is a courageous and first-class programme-maker, but she knows perfectly well that in the end she will be judged on how well her network does in the ratings. That is only a little less true for Jane Root, the Controller of BBC TWO. Producers who offer up programme ideas understand that the idea must be "sexy" rather than educational or informative - indeed it would be career limiting to start a pitch with the words, "This will make for really useful public service television". One of the top BBC schedulers acknowledged to me frankly that what she needs is not public service programmes, nor even innovative ones, but stuff that will beat the competition. Or to quote David Liddiment from ITV again, "Numbers now seem to be the only universal measure for excellence we have. Whether we're operating in the public or the private sector, we're all commercial now." 10

That is not to say that the BBC does not make many fine programmes. It is well understood that public service commitment is as crucial to the BBC's survival as ratings or share, and after a year of conspicuous BBC successes the channels may be more adventurous in the immediate future. It is also fair to say that pressures to make popular programmes can be healthy and invigorating, for in the less competitive past some of the output was flabby and self-indulgent. But how much would necessarily change if there was not a licence fee?

Consider what the BBC is now. It is has been skilfully piloted through many stormy waters, is generally well-managed (though as frustrating as any major corporation) and is far from complacent. Quite apart from its winning foray into the Internet it is pioneering revolutionary digital radio and launching a range of ambitious digital television channels. As for programme-making, it has hundreds of brilliant and honourable staff in senior positions and thousands of ambitious directors, producers and performers knocking on its doors. Why should that change? British people have a strong attachment to tough journalism, great theatre, good (and bad) music, the natural world and even poetry and science. Through most of the last century the BBC shaped expectations which will not vanish for decades. Whether or not the licence fee continues viewers and listeners will continue to appreciate excellence as well as choice, and so will politicians. There is a market for these things, just as there are producers who want to deliver programmes full of them.

Indeed, every time the BBC claims to be successful it is proving that there is indeed a market for quality.

Radio provides a good example, though perhaps a paradoxical one, since the BBC's current success in radio can be held up as a triumph for the licence fee. In fact it is a triumph for individuals whom I believe could have flourished under quite different funding arrangements. People like David Hatch, Liz Forgan, Matthew Bannister and Jenny Abramsky won ratings and expanded output by raising quality, not dropping it. The result is something shareholders would applaud just as much as would John Reith if he could adapt to the cultural norms of today. Five Live flourishes with hard and extensive news, live sports coverage, debate and audience access. Local radio is patchy but in some cases (as in Radio Foyle) is the equal of national stations abroad, Scotland, Wales and Northern Ireland each have extensive coverage of their own affairs and cultural priorities, Radios 1 and 2 are in rude health mixing speech with music to a courageous degree, Radio 4 has a following as loyal as that that which once huddled to the Home Service, Radio 3 has recovered from competition and prospered against the odds, and the BBC, more than anyone, is pioneering the digital radio age.

Yet each of those successes could, in the right environment and with the same talent, succeed in a quite different financial climate. Radio 3 could thrive if its programmes were funded, for example, by the Arts Council, and that epitome of public service, Radio 4 would have far more money if it went out on subscription. After all, when Neil Kinnock said that Radio 4 was the luxury he'd take along with his Desert Island Discs, he was speaking for millions who would loyally pay £1 a week and more to keep the service. Even if the half that cash went on administration Radio 4 would have 2½ times the income it does now .

Staff who have only known the public sector may feel uncomfortable about going commercial, or even semi-commercial, but experience shows that talent and integrity translate well. Market forces do not axiomatically corrupt people. Indeed, sometimes they emancipate them.

Nor is there truth in the widely argued view that privatisation - or any other change in status or funding - would render the BBC "just like any of its competitors". Commercial companies create their own distinctive cultures, which is why Channel 4 is distinct from BSkyB, and Apple was famously different from IBM. Market forces do not necessarily lead to uniformity even when left to their own devices. In fact quality is in the very soul of the BBC. Its brand is valueless without it, and a great rule of business is: never devalue your brand. The most unscrupulous commercial owner - merely provided he or she had better brains than morals - would keep the BBC upmarket.

In any case I am not arguing that broadcasting should be left to its own, wholly unregulated, devices. The public will continue to want public services supported; the question is not whether to fund and promote good programmes, but how.

There are many possibilities.

After all the BBC was not always funded by the licence fee. It started out as the British Broadcasting Company, founded by public subscription and offering a fixed annual dividend of 7½%. As Asa Briggs observes, "Reith had long made up his mind that the BBC should be both a public institution and an independent institution as free as possible from interference both by business and by government. He did not consider that service and enterprise were in any way incompatible."

The arrangement was a notable success.

"We think their pioneer work has been admirable and the standard of their broadcasting extremely good. We think, however, that it is undesirable to continue a monopoly service of this character in the hands of a Company which is in the nature of a private enterprise. We are agreed that the service must be a monopoly, but monopolies in private hands are always an object of suspicion, and especially in a service of this far-reaching character it is important to provide an administration in which the public interests are represented."

Thus the Company became the Corporation not because it made bad programmes, but because its very success led to concerns about monopolistic power. That is unlikely to be a big concern today. With hundreds of channels coming through cable and ether, and an infinite number on the web, the BBC might perhaps become a Company again. And if there is concern that Greg Dyke and Gavyn Davies might one day be replaced by Philistines, the government could always retain a 'golden share' in the new outfit.

Channel 4 has a similar remit to the BBC but a strikingly different constitution. It is a state-owned company whose profits go to the Treasury and is granted spectrum in exchange for public service commitments. After a difficult birth it went on to carve a brilliant niche for itself, stimulating a new industry of freelance producers and private production companies, and with a few exceptions (1992 and 2001) making a handsome profit. It says much about the culture of the organisation - and the adaptability of public sector staff - that its leadership has been drawn from the ranks of the BBC (Jeremy Isaacs, Michael Grade, Michael Jackson and its chief executive-designate, Mark Thompson).

ITV is unlikely to be a model for any new arrangements for the BBC not least because direct commercial competition would almost certainly result in cost-cutting rather than quality enhancement. As we have seen, revenues for mass-advertising are stretched and ITV may well face a chronic problem rather than a short-term market downturn. Ofcom, the new communications super-regulator, might be a long-stop guarantee of programme quality but its authority will be only as strong as the stability of the companies it regulates.

BSkyB is a more interesting paradigm. Here is a courageous, not to say reckless, investment that exploits every revenue opportunity it can. Those who argue that critics of the licence fee must offer an alternative might consider how sensible it is for BSkyB to keep its options open. Perhaps most interesting for the future is the growth of pay-per-view, which was scarcely forecast by Rupert Murdoch when he set out on this great enterprise. Moreover, only about 12% of its £2.3 billion revenues last year came from advertising . Subscription is the big earner, raking in some £1½ billion a year which represents two-thirds of total revenues. At annual charges ranging from £120 to £408 BSkyB may not seem good value compared to £109 for the BBC, but the premium subscription gives 5 sports channels, 3 dedicated movie channels (with 48 "screens" which offer films timed for when you want to view) and dozens of music channels. More significantly, the money is given voluntarily. Indeed, perhaps ominously for the BBC, it is the poorer households which have shown the greatest appetite for BSkyB. (As the old gag went: "What do you call those square things attached the satellite dishes?" Answer: "Council houses.") As middle-class households catch up the BBC may suffer audience losses to BSkyB as badly as has ITV.

Frankly I doubt that running adverts would ever be sensible for the BBC, whatever happens to it in the future. Its most valuable asset is its reputation for authority and integrity, but also its lack of ads. Subscription and pay-per-view seem more likely options, perhaps topped up from other sources. Yes, costs to consumers would rise, but if the BBC really is as popular as it believes itself to be most families would subscribe and would do so through choice not compulsion. Cable and satellite have proved that people prefer to pay for freedom. Meanwhile the poorest in society, who are hit hardest by the licence fee, will no longer have to pay it.

Indeed social exclusion might be reduced. Of course ending the licence fee need not mean ending subsidies, nor abandoning "universality", the principle that some broadcasting should be available to all. Just as the government now has concessions for the elderly so under any new arrangement safeguards could be put in place to pay for those who cannot pay for themselves.

There are many other ways to replace the licence fee. One is to allocate money specifically for public service programmes and available not only to the BBC but to any broadcaster who fulfilled appropriate criteria. This is rather what the Arts Council does in other fields of culture, topping up coffers which cannot be filled by commercial sales alone. This might entail just as many squabbles as there are about arts disbursements but would have the signal advantage of promoting quality programmes across all channels and perhaps even across all electronic media. Some sort of Broadcasting Council could identify gaps in public service broadcasting, set itself targets for social and educational achievement, and let people bid for the money.

One huge area of importance to the BBC, often overlooked by commentators who live in London, is the BBC's regional commitments. Regional structures have real power and regional programming is central to the BBC - for the Corporation knows where its bread is buttered. Not only is local relevance important in the struggle to justify the licence fee to the general public, but political support comes from MPs who enjoy interviews on local radio and regional TV to enhance their constituency fame. Most important of all are the nations (Scotland, Wales and Northern Ireland) where BBC insensitivity, let alone withdrawal of services, could have real constitutional significance.

Whatever happens the BBC will have to adjust to new competition locally just as it will nationally, and this will require a good deal of lateral thinking. But there is no reason to suppose that, with the right ambitions, regional and community programmes can only thrive under a licence fee. ITV's regional structure has always created healthy competition for local loyalties and anyone who has been to the US will see how even untamed commercial pressures can led to a strong sense of civic identity. As for truly neighbourhood broadcasting the United States has led the way. Some years ago at a ski resort in Colorado I was absorbed by TV coverage of the local council debate on whether to give planning consent to a new hotel in the little town. Given a clear sense of direction BBC staff will always be good at planting community roots and finding a place in the local and regional sunshine.

The BBC already has diverse sources of income, and two important forms deserve more than a passing mention. One of the consequences of the licence fee - indeed, some see this as one of its strong points - is that it focuses the Corporation's eyes on serving British people who pay the fee and British civil servants and politicians who set it. But to what extent do we want an introspective BBC in an age of globalisation? How does a domestic licence fee promote global aspirations? By being inward-looking is there a danger that the British broadcasting tradition might go the way of the British motor industry?

BBC Worldwide is the Corporation's response, a wholly owned commercial subsidiary which sells everything from BBC programmes abroad to telephone voting systems, software for games consoles, CDs, and Internet services. Despite its name well over half its sales are domestic. BBC sales activities have had a mixed reputation over the years, but on any measure Worldwide has developed into a real asset, improving the BBC's cash-flow by almost £100m a year (about 5% of the BBC's income). However, Worldwide stands accused of having licence-payers' cake and eating it. When Worldwide sells products it is leveraging assets that were paid for by a form of tax, and critics rightly say this is unfair competition. It is accused of using the BBC's semi-charitable status for, "hoovering up all non-broadcast rights as a kind of droit de signeur (which) is a real disincentive to building creative businesses here." As it happens Rupert Gavin, Worldwide's chief executive, might make even more money were it not for the licence fee. Entrepreneurship is constrained because BBC cash cannot be put at risk so partnerships with companies like Telewest and Discovery are restricted to provision of services and rights. The BBC has already yielded opportunities to gutsy individuals like Ted Turner and Rupert Murdoch. It might not be unhelpful if BBC Worldwide could raise more capital, take more risk.

Personally I would like to see a huge new emphasis on the BBC's international ambitions. As we have seen, the information revolution is not just causing convergence of media, telecommunications and computing power and blurring the distinctions between industries, it is making the world smaller. To call it "the death of geography" may be premature, but the global opportunities are growing year by year. Of course the BBC must continue to worry about Ambridge, but not be so distracted by a licence fee that it fails to care as much about families like the Archers across the world. For the sake of British culture, international esteem, and gross domestic product, it would be good to see the BBC as a more dominant media force worldwide.

What then of the BBC World Service? The BBC's overseas services are something we rarely think about unless we are abroad, and even when Britons tune in we tend to listen only in the English language. Yet BBC World Service is one of this country's treasures. It reaches 35m listeners a week in English, well over 100m in 42 other languages, and has a remarkable reputation among other broadcasters, many of whom use BBC material and its monitoring services. It is mostly paid for by a grant-in-aid which means a direct subvention by the government. As a result of the UK's declining world importance it may seem hard to justify some £200m pa. After all, World Service was an apparatus set up in times of Empire, beefed up in times of war, and sustained by the cold war.

In fact it thrives as a relatively cost-effective way of projecting Britain's image as creative, helpful and reliable. Kofi Anan described it as, "perhaps Britain's greatest gift to the world" in the twentieth century. Despite long-standing predictions that radio will be eclipsed by television, and that as countries develop their own broadcasting infrastructures the World Service will become superfluous, its audiences are at an all-time record, greater than its nearest two competitors combined. Provided it remains alert to new opportunities like the Internet it can continue to prosper. In any case its fate rests on political commitment. There is no reason for World Service to be disturbed by arguments about the licence fee.

It may be that in any case the BBC will transform itself in the next few years. Its very success makes it vulnerable to a sudden shift in zeitgeist, a change in the spirit of the age. In a vibrant economy is it right that one vast quango should be responsible for over 40% of original broadcast production? Even if the licence fee is retained the Corporation may well divest itself of more of its facilities and production arms and concentrate on its core duty to commission and disseminate.

Maybe the changes I have outlined will take place slowly. The BBC is a doughty and enterprising fighter and may defy its critics for many years to come. It believes it can stabilise its audience at say 30% of viewers and near 50% of listeners, and if it can it will remain in a strong position. So scrapping the licence fee is not something that has to be done quickly, and ending it precipitously is the last thing I want to see. As I said at the start, I do not pretend there are simple solutions and even if a new consensus begins to emerge there must be a period of transition. But at best the future is unclear. The BBC charter will be renewed in 2006, but on what terms and for how much longer? What is most important is not the process but the outcome, the future of quality broadcasting.

At £109 a year the BBC is very good value for money. But then, at much lower relative cost than most other western equivalents, so is the NHS. It would be tragic if a similar path was followed, from world excellence to a dawning realisation that somehow we have been short-changed.

Let us have more open debate.