Britain has a free press but controlled broadcasting

May 9, 2001

Free Market Foundation

While the United Kingdom has a free press, privately owned and independent of government, much of its broadcasting is still run paternalistically, with public ownership and control. And although technical and economic conditions necessary for free competition are being realised, the government is strengthening the tax-subsidised British Broadcasting Company (BBC) and other “public service broadcasting.”

The government is increasing the licence fee paid by all owners of television receivers by 1.5 percent per year through 2005 in order to increase BBC subsidies.

It is increasing the number of BBC services, including commercial services for broadcast on commercial channels in competition with privately financed programming.

However, the BBC’s share of the television audience fell from 43.2 percent in 1995 to 38.1 percent in 2000, while the share of cable and satellite services doubled from 7.7 percent to 15.7 percent.

The public now views the BBC as poor value for their licence fees. And the technological and economic factors used originally to justify public broadcasting no longer exist, due to digital satellite transmission of programming.

Thus, the three preconditions for a genuine consumer market in television set out in the “Report of the Committee on Financing the BBC” are now close to being met:

Full freedom of entry for programme makers.

A transmission system capable of carrying an infinitely large number of programmes.

Facilities for pay-per-programme or pay-per-channel and differentiated charges for units of time.

Critics say a logical policy would be to reduce the barriers to entry of new commercial services by reducing the licensing fee and the scale of the BBC’s public service broadcasting activities.

Source: David Sawers, Public Service Broadcasting: A Paradox of our Time, Economic Affairs, December 2000, Institute of Economic Affairs.

For text http://www.iea.org.uk/economicaffairs/pdfs/ea204/ea204sawers.pdf

For more on the United Kingdom http://www.ncpa.org/pi/internat/intdex9.html