Value For Money, Competition And Jail Time

Michael Hedges March 31, 2014 Follow on Twitter

Listeners, viewers and – now – surfers generally give public broadcasters high marks for value. While the standard funding mechanism – the license fee – is less than ideal alternatives are hard to find. But how public broadcasting is funded is inextricably tied to purpose. Competitors and the politicians who love them want to shrink public broadcasting and everything it does. And they’re coming for the money.

UK politicians of every stripe have voiced support for a measure that would decriminalize non-payment of the BBC license fee. At present every UK household and many businesses contribute to the BBC’s GBP 3.7 billion (€4.47 billion) annual summons under pain of prison. The UK television license fee supporting the BBC was established in 1946 and is now GBP 145.50 annually for color TVs. All BBC services are funded through the license fee, now including BBC World Service. A separate radio license fee was abolished in 1971.

The House of Commons committee reviewing the proposed Decriminalization Bill passed an amendment (March 25) that would Culture Minister Maria Miller to review penalties for skirting the television license fee and report back in a year, conveniently timed to arrive after the 2015 General Election. The BBC’s Royal Charter is up for renegotiation in 2017, funding issues sure to be the centerpiece. In 2012 jail terms were given to 51 people for non-payment of the license fee.

Most public broadcasters in Europe are funded to some extent by the license fee, a hypothecated tax for services, and most of those combine advertising revenue or direct government grant. The BBC is unique as advertising revenue is prohibited. Television licensing in the UK is also unique with several channels operating as public service broadcasters and funded through a mix of license fee, advertising and grants.

“You should not use the license (fee) as a means to compete with commercial market participants,” said Norway’s Culture Minister Thorhild Widvey to Journalisten (March 27). The remit of public broadcaster NRK, license fee included, is under review by the ruling coalition of the Conservative Party, center-right, and Progress Party, further right, which expresses points common to right-wing politicians across Europe. “In the last review (2008), for example, there were no iPhones on the market.” Minister Widvey also admitted alternatives to license fee funding for NRK are hard to find but has undertaken a fact-finding mission to the UK with others planned.

“It is an unfair tax that people have to pay whether you look at NRK or not,” said Progress Party spokesperson Johan Aas to Dagbladet (March 24). “This is about freedom of choice and for the Progress Party grassroots it is important that the NRK license fee is removed.” During the 2013 Norwegian parliamentary elections the Progress Party promised  “to remove the license fee, convert NRK to a limited company and sell the State's shares.”

A TNS Gallup survey released in the midst of the debate showed three-quarters of Norwegians believe they are getting value for money, up from two-thirds last year, reported Kampanje (March 20). “This figure is an important expression that funding NRK has broad legitimacy,” said Director General Thor Gjermund Eriksen. “People like our offer 365 days a year…and the license fee accounts for a much smaller share of people’s media spending.”  The reason for that, he explained, is Norwegians are spending less on newspaper subscriptions.

State Ministers in Germany agreed in mid-March to lower the monthly household license fee from €17.98 to €17.50 for 2015. The agency mandated to determine the financial needs of Germany’s public broadcasting system suggested a slightly larger reduction after rule changes on the levy for households and businesses brought in more money. Drugstore chain Rossmann, seeing its license fee bill jump to €280,000 annually, asked the Bavarian Constitutional Court (March 25) to declare the license fee unconstitutional as a hidden tax. If the Court agrees the license fee could be abolished in Bavaria, bringing a new twist to next year’s negotiations over the Broadcasting Treaty, which establishes rules and conditions for all German public broadcasting organizations.

Trade association European Broadcasting Union (EBU) has long supported the license fee as the “least-worse” solution to public broadcasting funding, preferable to direct dependence on government funding.  More recently, the organization has turned agnostic, saying there is “no one-size-fits-all” funding solution. “Revenues must be sufficient, long-term guaranteed and shielded from the vagaries of national politics,” said the EBU in a 2012 policy statement. “Legislators must remember that without solid financial foundations, (public broadcasters) lose their independence and cannot prepare for the future.”

The American model for public broadcasting funding has long been viewed in Europe as unworkable. US public radio and TV channels are largely financed through corporate sponsors and contributions from listeners and viewers, little or nothing from tax revenues, which has had little negative impact on award winning programming. “People won’t pay,” said one EBU official several years ago. Perhaps as public broadcasting redefines itself in the digital age there will be more faith in the public.

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