AN ORIGINAL PROPOSAL ON UPGRADING THE LICENSE FEE (BROADCASTING LEVY) DESIGNED TO CREATE CONSENSUS AMONG THE WARRING FACTIONS (1100 Words)
Introduction and background: Below I describe an original, 21st century solution to the controversies surrounding the BBC license fee. By accommodating all objections and viewpoints, it is designed to be capable of consensus. It also solves significant problems which fall slightly outside the scope addressed by the license fee.
My approach is to see the License Fee not in isolation, but parallel with other developments. The controversy of how best to fund public broadcasting recurs in many countries. There, too, its equivalents are only one element in wider changes and challenges to traditional funding models.
In the old days journalism and much culture was provided at a discount thanks to advertising or sponsorship. People could also be asked to pay serious money for what was printed. Those days are past.
On another societal front there has been talk in many countries of a basic income. I leave aside here the arguments for and against. But my proposal involves something akin, namely a supplement or bonus that households can allocate to not-for-profit digital services of their choosing.
Detailed reasoning: At present the debate centres on the assumption that a license fee, a subscription model or advertising are the only ways to fund public service broadcasters and indeed other providers whose offerings remain, or for the moment must remain, conveniently free at point of access.
There is an alternative. It is to provide each household with a digital “income” which would operate in the manner of a vote.
Many citizens already make voluntary payments for free-to-access internet offerings such as some newspapers or Wikipedia. Therefore it is not the case that people only pay when forced to. The objection made to the license fee is that it infringes the principle that people should only pay for what they appreciate (i.e. value independently of whether they actually consume).
Meanwhile, on another front, the local press is being starved of advertising revenue, and, dying with it, is an element of local democratic accountability.
A digital income would act in the manner of a bonus to a possibly reduced annual license fee, of say £ 100 or £ 140, to be allocated by each household for the next 3 or 4 years as part of a secure online payment process. One could allocate (for example) one third to that part of the BBC one appreciates, one third to one’s local newspaper in recognition of its free-to-access online publications or indeed to a non-commercial local radio station, and one third to a rival broadcaster or a web-based information service. Or all to the BBC as a default setting.
The £ 100/140 would be boosted to £ 300 or £ 400 from a ring-fenced fund.
Where would this money come from? Traditionally, the press has been co-financed by all kinds of advertising revenue, which has now moved to the tech giants. Instead of threatening the latter with a special tax, simply end tax breaks on advertising expenditure. This would generate ample funds to redistribute to not-for-profit digital services dedicated to professional journalism and similar information offerings or indeed contemporary culture. (Culture, or high culture, might be defined for practical purposes – provisionally – as entertainment that is not susceptible of attracting advertising.)
As a result, the BBC would compete for audience favour with other digital offerings. Possibly it would have more funding than at present, possibly less. That would be decided by how it compares in the public eye with alternatives. Most importantly, the dying local press could be resurrected to fulfil its journalistic role in democratic politics at the grass roots.
I suspect that, politically, the biggest objection to the digital income or supplement would be its funding model: ending or just reducing tax breaks for advertising would run into opposition from vested interests. It would of course be feasible, alternatively, to fund the supplement from general taxation. However, in a high profile public debate the case for ending tax breaks for advertising would likely be overwhelming. There is also a certain logic in continuing to obtain (or resuming) funding for journalism and some culture from the advertising sector.
There are of course technical questions around accounting and cash flow. For example, calculating the amount of the savings the Exchequer would make by curtailing the indirect subsidy given to advertising. But also obtaining, in the case of the BBC especially, planning security. It would not make sense to convert the “vote” given to different parts of the BBC exactly. These problems are not insurmountable.
There would also be an inbuilt dynamic since advertising expenditure might fall significantly. In the final analysis, the proposal implies a shift with resources for journalism, culture etc, no longer being channelled through the advertising industry or an inflexible license fee, but more directly to where they create most perceived benefit for society as a whole.
Note that in my formulation above, the principle was that the allocation voted for by the household should be for a number of years, and not just one, even if payment is annual. Note also that the compulsory nature of the license fee is retained: the reason for this, apart from wishing to avoid too radical and controversial a break with the status quo, is that it makes people engage as they might not do if provided with something for free.
Note also that the proposal, if taken to its logical conclusion, would resolve or attenuate many of the issues posed by the internet giants. Hence there would be no need to court tension with the USA by resorting to a special tech tax. But this is running ahead. There are, needless to say, other ramifications, most of which would, I believe, be beneficial.
The proposal could be rolled out in one geographical area, or among one demographic, on a trial basis. For planning reasons, it would not be desirable to implement it wholesale all at once.
A final note on the vexed question of enforcement: Retain the compulsory nature of the license fee, but prosecute for non-payment only those households which are close to (or of course above) the median income. There is no need to hound the poor, who can be defined on a discretionary basis.
Further below there is an earlier version of this concept with the title “Digital Income for All”. That version was addressed to an international readership. Apart from wording and detail, the revised concept (“Replacing the license fee” from November 2019) differs in substance to the earlier article by now retaining the status quo principle that each household should make a mandatory payment, altho it maintains that this should be somewhat lower. The shortfall for public broadcasters, but also other potential recipients is made up by a “digital supplement” to be assigned individually by households rather than government. The article immediately below is directed at the situation in the United Kingdom, but it can easily be adapted for other jurisdictions since the same arguments and principles apply.
REPLACING the LICENSE FEE
Single sentence summary: On payment of a low digital services fee (lower than the BBC license fee, now renamed), households would receive a digital supplement to be awarded, at their discretion, uniquely to not-for-profit providers (including the BBC) of freely accessible digital or broadcast news, information and entertainment.
I. A familiar source of grievance is the BBC license fee, and this has been exasperated by BBC bias in reporting on Brexit in particular and its policy of political correctness. Objectors usually demand that the BBC become a subscription-only service. There are many good arguments against this, which I leave aside here. My purpose is to propose something innovative to accommodate the changes in how information and entertainment are financed.
On another front, there are demands in some quarters for a universal basic income. Again there are powerful arguments against this. Neither of these issues is unique to the UK.
Take a step back. Even people who do not watch television, or watch rarely, and people who are poorly off, including young people in particular, derive benefit from much that is available free of charge on the Internet, whether music, or practical information, or news & commentary, or indeed entertainment. Not to mention search engines and social media. Radio is everywhere free for listeners while some TV is free-to-view, and these, too, might be thought of as “universal digital services” in contrast to those that can only be accessed through a paywall.
Much of this is financed through advertising, which many people use ad blockers to avoid, something that speaks volumes for the popularity and acceptance of advertising. One can sometimes avoid advertising by paying a subscription. Other content is financed privately, with regular and intrusive appeal for people to donate, something many can ill afford.
One cause of resentment at the BBC license fee is that people have no way of expressing their discontent or indeed their preferences. Take it or leave it, whatever the BBC decrees, but pay nonetheless.
II. Meanwhile another development has been afoot. The shift of advertising, including small ads, to the major internet companies has led to local newspapers losing essential revenue. Even if they charge for premium content through a paywall, the subscriptions that can be asked are insufficient to pay for coverage of local matters, for example, the proceedings of council meetings and local politics generally. This absence of critical and professional journalism bodes ill for local democracy.
III. PROCEED WITH CAUTION
Change is needed, but cannot be too radical, firstly because it would then meet with great opposition, but also because it might have knock-on effects which no-one would wish to endorse. So we proceed with caution.
As soon as the proposal below comes to the fore, those with vested interests will seek to amend it, complicate it or otherwise seek what they consider to be greater justice (“equality”) than that sketched here. Such attempts must be resisted, at least until the (relatively) simple scheme proposed below has been in place for a while. Not every last detail need be perfect, or rather, perfection is unattainable for those determined to quibble.
IV. CONCRETE PROPOSAL
The idea is to bring these threads together in the form of what might be termed a universal digital supplement or, more precisely, a supplement for universal digital services. This is a kind of subsidy, but it is awarded by heads of households rather than by civil servants or politicians. It can also be understood as a bonus payment for those services a household most appreciates.
The proposal is to retain the license fee, but reduce it to, say, one hundred pounds. More importantly, to re-name it and re-direct it. In future it would be a (mandatory) part-payment for various digital & broadcasting services which are deemed to be in the public interest.
On payment of the fee for digital & broadcasting services the household would be able to register certain preferences. Its one hundred pounds would be boosted with a supplement. This is the meaning of the expression “part-payment” above.
On logging into their personal account, households could stipulate which not-for-profit services they use or consider worthy recipients of the supplement. Recipients would include:
1. The BBC, importantly with sub-categories such as
* news & comment, and
* local and regional broadcast services.
2. Local and regional newspapers (the household would specify exactly which).
3. Potential independent (i.e. non-BBC) broadcasters, for example, local (e.g. "citizens") radio stations.
4. Free-to-use Internet information services such as Wikipedia.
The proposal is, in effect, to give people a vote on which digital and broadcast offerings should receive state funding. But this can also be understood as introducing a market element, since the different services would be competing with each other for audience expenditure. Different divisions of the BBC would also be subject to mutual competition.
Important to note and to avoid misunderstanding: No subscriptions are involved!
Some people would not take the trouble to register their preferences much as some people do not vote. This said, the fact of having to pay the one hundred pounds would nudge people into registering their preferences, which might be done simultaneously with payment authorisation.
The very elderly could be excused the fee on the reasoning that, even if they have an internet connection, they might not use it much or not cope easily with the digital registration of their preferences.
All potential recipients except for the BBC would have much to gain from this scheme. But the BBC too, if it adapts and plays its cards right.
Although decried by many, the BBC offers a huge range of services, well-regarded across the world, which are unaffected by its controversial political stance. It would be foolhardy to have its best put at risk merely to express displeasure at a clique of the politically correct. Hence the one hundred pounds should be retained fully as income for the BBC, but the BBC would have to appeal to its audience to award it supplementary income. Dissatisfied viewers could direct their share of the remaining budget to their local press. Or else stipulate that none should go to BBC sports or BBC news & commentary, but instead to entertainment, for example. All of this would make the BBC more responsive. It would even be conceivable for the BBC to win more funds than at present.
V. HOW CAN THE STATE POSSIBLY FUND THE DIGITAL SUPPLEMENT? – By ending the tax deductibility of corporate expenditure on advertising. This would easily generate enough to make of the one hundred pounds, three hundred. At present much of this expenditure is going to the US-based tech companies, who themselves pay very little tax in the UK.
VI. MINOR CLARIFICATIONS
Why make people pay? There is a general principle, not accepted by all, that requiring payment, even if it is only a co-payment, has a beneficial effect on perceptions and appreciation. If there was no compulsion to pay, many people would not bother to register their preferences and this would likely distort the distribution of funds, creating dissatisfaction down the line. In this particular case, moving to non-payment would in any case be too radical for the foreseeable future.
Registration would involve secure procedures such as are already in force in other areas. It is not immediately clear why there should be any material risk of – or incentive to – fraud, for example, in the form of illicit payments in order to “buy votes”.
There would have to be a limit to the list of possible beneficiaries. Hence legacy newspapers might have a foothold denied to start-ups, at least initially. National newspapers have been deliberately excluded because “state” funding for these would be too controversial.
The many lesser known media for news etc. would seem to be disadvantaged, but they too would profit since some of the competition for advertising would fall away. The scheme does not aim to be perfect, simply to be a huge improvement on the status quo.
The supplement would only for available for digital services that do not use advertising on those offerings that are available to all free-of-charge. It is for not-for-profit services. However, it would be possible for a local newspaper, for example, to continue to have a print edition with advertisements and to make a profit. It could also have premium content behind a paywall and, if the paywall price was low, have advertising there.
Periodicity of the award: The one hundred pounds is due annually, but there would be no requirement to register preferences annually. Those preferences already registered would stay in place until changed.
It would be possible to give the scheme a trial run in one or two regions of the country – say the south-west or north-east.
Paul Charles Gregory, 1 November 2019
DIGITAL INCOME FOR ALL
Most countries have a broadcasting levy to pay for public radio and television. The fees are a persistent cause of grievance and controversy, reinforced in the eyes of many by dissatisfaction about the nature and quality of the programmes. Yet the alternatives of funding by advertising or subscription also suffer from substantial drawbacks.
With the Internet giants devouring the advertising expenditure that previously subsidised serious journalism, the economic situation of national and – perhaps more importantly – local newspapers has deteriorated sharply. Such print media – the “Fourth Estate” – fulfil a key role in democracy, shining a spotlight not only on the grand issues of the day but also on happenings in council meetings and otherwise at the local level. They are a bulwark against fake news and rumour-mongers. But readers’ subscriptions whether for print or for access to websites can raise only a limited revenue, insufficient without advertising to cover costs. This is not only a matter of reluctance to make donations: in a changed economic climate many no longer have the disposable income to support their media of choice.
In various countries there has been much discussion about a universal basic income (UBI). This is unlikely to be adopted widely in the foreseeable future and opposition will doubtless persist for a host of reasons. Here I want to propose something rather different: a universal digital income.
Each household would receive, say, a thousand (or half a thousand) pounds (euros, dollars) to be allocated annually in the manner of a ballot (i.e. securely and secretly) in portions of a quarter or a fifth to a broadcaster, a national newspaper, a local newspaper and maybe a non-commercial internet service such as Wikipedia. This could be funded by ending tax breaks for advertising expenditure, or possibly only allowing such tax breaks for expenditure on bone fide news services.
Note that universal digital income does not involve subscriptions. Citizens receive no personal benefit from their digital income.
This would end the tiresome debates about license fees and their equivalents.
There are some issues with the concept that would need discussion. One is how, where and how often citizens could make their allocation to their preferred broadcaster, newspaper etc. Another is how they can be motivated to do so. One solution to this latter problem would be to state the individual income not as a fixed annual amount but as a proportion of all individual allocations. If few people bothered to register their preferences, then those few would have a larger say in the funding of the media concerned. People who abstain in the first year or round might find themselves keen to participate later.
A further issue is how the recipient organisations are identified. Here it would be wise not to seek perfection. A sensible point of departure would be initially to license for funding only legacy media, i.e. those newspapers and broadcasters which have been long established. This will seem unfair to start-ups, representing an entry barrier to newcomers. But, away from the sports ground, there is no such thing as a perfectly level playing field. And newcomers should find the advertising market less harsh than it has recently become. Once established as serious news sources such newcomers would become eligible for allocations.
In the case of traditional broadcasters (television and radio) there might be a restriction such that only those that do not resort to commercials would be eligible. (There is a fundamental question, which would take us too far, about the desirability of omnipresent – intrusive – advertising.) In the case of broadcasters it would also be possible for citizens to express a more precise preference, for example, to earmark their contribution for radio rather than television, or to a category such as sports, culture, classical or popular music.
There would inevitably be calls to extend eligibility to other digital services, such as social media or search engines. Such calls should be resisted. The sole purpose of the universal digital income is to secure funding for constitutionally essential news, educational and cultural services in a radically changed pricing environment and to distribute these funds transparently.
A version of this text and discussion were published by the London think-tank Radix (https://radix.org.uk/) in August and September 2018.
> PDF of submission to The Financial Times in January 2020. Substantially as above, but more journalistic. It is the response of the FT which is remarkable, providing evidence of a refusal here as elsewhere to countenance change or the mildest of challenges to the advertising industry.
The synopsis (top of page: "An original proposal on upgrading the license fee (broadcasting levy) designed to create consensus among the warring factions") was submitted to the House of Commons as follows:
"PSB0006 - The future of Public Service Broadcasting
Witnesses Mr Paul Charles Gregory
Committees Digital, Culture, Media and Sport Committee
Published 22 July 2020
But the text is not available there. Nor I have received any feedback other than the formal acknowledgement of the submission in July 2020.
A little earlier an almost identical submission was made to the Minister for Digital, Culture, Media and Sport. A reply was received which clearly indicated that the person (presumably a civil servant) responsible had not read my submission. His response letter is here:
Dear Mr Gregory,
Ministerial Support Team 4th Floor 100 Parliament Street London SW1A 2BQ
E: email@example.com www.gov.uk/dcms
13th March 2020
Our Ref: TO2020/02766
Thank you for your correspondence of 29 February regarding the BBC TV licence fee. I am replying as a member of the Ministerial Support Team for the Department for Digital, Culture, Media and Sport.
The licence fee is payment for a licence to watch or receive television programmes. It is not a fee or charge for BBC services and is payable regardless of whether the licence holder ever watches the BBC. Licence fee revenue is not just used to fund the BBC, it is also used for other strategic public service objectives including broadband, local television and S4C (the Welsh language broadcaster).
Under the provisions of the Communications Act 2003 and the Communications (Television Licensing) Regulations 2004, a television licence is required to install or use a television receiver to watch any television programme service. That definition embraces BBC, ITV, Channel 4, S4C, Channel 5, satellite and cable broadcasters. The licence fee is therefore a payment for permission to receive television broadcasts and not for the service provided. It is payable in full irrespective of the use made of that service and the quality of reception. As such, the licence fee is not a fee or charge for BBC services and is payable regardless of whether the licence holder ever watches the BBC.
The BBC has committed to exploring whether other funding options have a role to play in its future funding, alongside the core licence fee model. This is with a view to developing the scope for additional sources of commercial revenue. The government is committed to ensuring that the BBC and all public service broadcasters adapt to a fast changing market while remaining at the heart of our world class TV sector. This work will begin well in advance of the next Charter, set to be introduced in 2027, and will include looking at the licence fee funding model. The current licence fee settlement is agreed until April 2022 and negotiations between the government and the BBC for the next licence period, 2022-27, are likely to begin next year.
The BBC is operationally and editorially independent from government and the government cannot intervene in the BBC’s day-to-day operations. An important way for audiences to hold the BBC to account is by telling the BBC directly what they think about its services and programmes. In the first instance, complaints about the BBC's content should be made directly to the BBC. Details of the BBC's complaints process here: www.bbc.co.uk/complaints
If you are unsatisfied with the response, or where the BBC fails to respond in a timely manner, you can complain to Ofcom. As the BBC independent regulator, Ofcom is responsible for monitoring whether the BBC meets its mission and public purposes. Ofcom also regulates editorial standards and can consider complaints about BBC content, including accuracy and impartiality. This means the BBC is held to the high editorial standards that the public expects. Ofcom can consider complaints about all BBC content, including accuracy and impartiality in BBC programmes. Further information on Ofcom's complaints process can be found here:
You may be interested to know that the government has launched a consultation on whether TV licence evasion should be decriminalised. The consultation document and instructions for how to respond can be found on the government's website here:
Ministerial Support Team
www.gov.uk/government/consultations/consultation-on-decriminalising-tv-licence-evasion Please note that responses will be accepted as long as they respond to the specific questions in the consultation. This consultation is open for a period of eight weeks and will close at 5pm on 1 April 2020.
I hope that this information is helpful.
I infer from these striking if isolated experiences that there does indeed seem to be something of a Deep State, with constructive proposals for change thwarted at every turn without discussion. The status quo reigns supreme; any thinking outside the box is disallowed. This is further evidence of what has already been conjectured in many circles.