The BBC has floated the idea of replacing its licence fee with a broadband levy in its submission to a government consultation.

The licence fee system imposes a £154.50 charge on every UK household with a television receiver. The model, which generated £3.69bn for the BBC in its fiscal '19, dates back to 1923, and is used to fund UK television and radio stations, as well as the World Service.

The British government is now consulting on whether those avoiding the licence fee should be subjected to criminal sanctions. Non-payment of the fee can lead to fines of up to £1,000 or a prison term, but it's looking more and more likely that the government will no longer prosecute non-payers, which could cripple the public broadcaster's finances.

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The BBC's submission to the consultation suggests an alternative funding system that could be "linked directly to an existing common household bill", including broadband internet.

It points out that Italy collects equivalent TV fees through electricity bills and France through council tax. "Another option to consider, as the UK progresses towards universal access, could be broadband bills," the submission [PDF] says.

The BBC does not advocate the change, preferring to stay with the current system. "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," the corporation said.

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Last year, then UK culture secretary Nicky Morgan hinted that the TV licence fee could be replaced with a Netflix-style subscription. In October, she told a Parliamentary select committee she was "open-minded" about scrapping the mandatory licence fee and replacing it with a subscription service.

"What I haven't seen is any evidence, either way, [of] what a subscription-based system would do in terms of the revenue. The licence fee last year raised £3.7bn for the BBC. They obviously have other sources of income as well. So, I would need to understand what, if you were going to change, that would do to their income," she said.

Others argued that a voluntary subscription model for the BBC takes away one of the founding principles of the organisation - that it should not be tied to commercial sponsors but instead serve a public education and entertainment function for the nation.

TV licensing officials have stopped visiting the UK's homes as the country remains in lockdown for the second week. Failure to pay the telly tax, which is payable if you watch live TV or stream BBC iPlayer online, is a criminal offence. A 2012 study found the BBC was the most prolific non-CPS prosecutor in the UK.

The government's licence fee consultation is open until 5pm (1600 UTC) on 1 April. ®