Broadband tax could be introduced to save Channel 4, ITV and Five programmes

11 April 2008 / by Rebecca Sargent
A broadband tax could be introduced in order to fund unprofitable television programmes such as news bulletins and children’s television, telecoms watchdog Ofcom has revealed.

According to a debate launched by Ofcom on the future of public service broadcasting (PSB) and content, PSB is at a crossroads. New technology and media is changing the way Britons view programmes and, according to Ofcom chief executive Ed Richards, this needs to be recognised and addressed.

Television programmes such as news bulletins are often taken for granted but these programmes make little or no money and, according to the Ofcom debate, action is required to fund these national institutions.

As television moves into a digital age, and broadband becomes a popular channel for viewing television programmes, more funding is required for PSB to keep up to date. According to Ofcom’s analysis, funding for commercial public service broadcasting has declined by £130 million since 2003 and is expected to decline by as much as £300 million by 2012.

The BBC currently receives more than 80 per cent of all funding for PBS through licence fees, and this is expected to rise above 90 per cent. But, Ofcom have found that audiences believe competition for the BBC in PBS content is essential because it provides a range of voices and perspectives.

According to Ofcom, new funding is required to maintain and strengthen the quality of PSB; this will also maintain plurality as more channels such as Channel 4, Five and ITV will be able to compete with the BBC.

Funding options from Ofcom include direct public funding, more licence fees, and industry funding. Industry funding in the form of broadband tax is currently under consideration in France and Ofcom believes this could be an option in the UK too.

Despite Ofcom launching the debate and suggesting solutions, it is essentially up to the Government to impose actions such as taxes on broadband. The debate has been launched in order to raise awareness of the need for new funding.

Ofcom’s Mr Richards concluded: "Public service broadcasting is at a crossroads. Viewers still want a mix of high quality UK-made content, but the traditional television model is not enough to meet all their needs. Today’s proposals outline options for a securely funded PSB future. Now id the time for a wide ranging debate looking carefully and dispassionately into all the options."

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