Wednesday, April 1st, 2020 (7:57 am) - Score 39,384

The BBC has given its response to the UK Government’s (DCMS) consultation on their proposal to decriminalise TV licence fee evasion, which among other things includes a suggestion that the fee could be replaced by a levy or tax on consumer broadband bills. But they are not “advocating” for that, yet.

At present a colour TV licence costs £157.50 per year (up £3 on the previous fee) and a black and white licence costs £53 (up £1), while those who are blind (severely sight impaired) can apply for a 50% concession on that charge. The current payment system is court-enforced and can attract a criminal sanction if somebody fails to pay, which has long caused disagreement.

The BBC remains in favour of the current system and points to independent behavioural research, commissioned by the broadcaster itself, which suggests that under any civil system evasion would increase to around 10%. All told the broadcaster suggests this could cost them around £300m (or £1bn over the remainder of the Charter period from 2022 to 2027).

Significant cuts to programmes and services would be “inevitable” in a civil system, said the BBC. On top of that a civil system would not be without consequence, which they warned could result in those who evade it being left with the “threat of bailiffs at the door or impact on credit ratings.”

BBC Statement: We recognise that the current system of collection by TV Licensing could be improved – and the BBC is happy to work with Government on proposals – such as more effective access to data and extending the simple payment plan scheme to help more people, particularly the most vulnerable and those on lower incomes. And whilst we can of course understand why some people are attracted to a civil system, we agree with the Government’s own list of significant difficulties as set out in its consultation. This includes higher evasion and higher penalties. It is likely that a civil system would hit the poorest hardest as there is no discretion built into the system. Unlike in the magistrates’ courts, where the court decides on the level of the fine, there is no discretion to vary the size of the fixed penalty. It is just that, fixed. The only discretion is to establish how the penalty should be paid. This will have a significant impact on those on lowest incomes and the most vulnerable in society where the threat of bailiffs at the door or impact on credit ratings have serious consequences. We cannot see how these issues could be mitigated and deliver an effective sanction at the same time.

However, in its response to the Government’s consultation, the BBC has also said that they’re willing to consider alternative funding models, such as one linked directly to an existing household bill.

Extract from the BBC’s Response In some countries the TV licence, or equivalent, is linked directly to an existing common household bill. For example it is collected through electricity bills in Italy and the equivalent of council tax bills in France. Another option to consider as the UK progresses towards universal access could be broadband bills. This would be a significant change for the UK and we are not, at this stage, advocating it. It does however raise an interesting question as to whether the current system could be made much simpler, more efficient and more automated. We are open to exploring this further.

We suspect that consumers would not be universally welcoming of having their broadband bills so directly linked to the BBC TV Licence, particularly since most regard internet access as being an essential service but many would not hold the broadcaster’s own content to that same level of importance. Not that the content they create isn’t good, but broadband is simply on a different level and with other challenges.

The idea also raises complicated questions about how such a system might be imposed across such a diverse UK market, which may be dominated by a handful of major ISPs but is also home to hundreds of smaller providers. Such a levy would be quite a noticeable change and is certain to require regulatory approval, so as not to trigger penalty-free exit clauses (usually occurring when a provider imposes a mid-contract price hike).

We should point out that the idea of imposing a tax or levy on broadband is not a new one (e.g. Labour’s failed 50p phone line tax in 2009/10), although in the past such proposals have been linked to improving national broadband connectivity itself. Likewise it could be argued that the industry fund for the new and somewhat weak 10Mbps broadband Universal Service Obligation (USO) is ultimately being fuelled out of consumer pockets.

At the same time it would seem counter-productive to be imposing a new levy on consumer broadband bills at the same time as the Government and ISPs are still trying to encourage the roll-out and take-up of superfast (24Mbps+), ultrafast (100Mbps+) and gigabit-capable (1Gbps+) internet connections. Many Building Digital UK based contracts include a clawback clause, which returns public investment as take-up rises.

Suffice to say that few want to make the latest gigabit-capable services even more expensive, particularly with the Government aiming to spend £5bn in order to make such connections available to every UK home by the end of 2025. Full fibre (FTTP) builders are spending big to roll-out these networks and a sudden hike in the annual cost of such packages might negatively impact take-up, which could in turn hurt their investment model.

Lest we forget the similar arguments around the current business rates relief on new fibre (Fibre Tax), which is due to end in 2022. Many fibre builders were shocked to see the Government’s recent Budget 2020 announcement overlook this.. again. But that’s another issue.

The BBC’s Consultation Response (PDF)

http://downloads.bbc.co.uk/../bbc-consultation-response-decriminalising-licence-fee.pdf

UPDATE 8:32am

We figured this one might be ripe for a snap poll (note: votes are cached and may not show immediately in the results – check back later).