We are posting our interview with John Whittingdale, MP in three parts. Here is the second part, focusing on the BBC.

The BBC

John Whittingdale has been a regular critic of the BBC, particularly in regard to its governance structure and the oversight of its finances. With the government about to publish its White Paper outlining how it believes the corporation should be regulated going forward it�s an interesting time for the corporation and those watching it. We asked Mr Whittingdale whether the BBC should be regulated by Ofcom.

JW - �I am on record as consistently arguing that Ofcom should have responsibility for regulating the BBC � and I continue to hold that view…This should certainly be the case in the areas where Ofcom has responsibility for commercial television, which principally means responsibility for Tier 2 requirements � content regulation, accuracy and impartiality. There is scope for an external body to adjudicate on issues relating to the public service remit of the BBC.�

So is the current oversight of the BBC failing?

JW - �Well�it receives a huge amount of public money � �3 billion or so. The idea that this organisation is not subject to external audit and scrutiny is to my mind inexplicable. The BBC has not only successfully fought off regulation by Ofcom it has also managed to remain outside the scope of the National Audit Office (NAO) � except by agreement � which is an extraordinary arrangement!�

And in the areas where the BBC has been subject to financial scrutiny?

JW - �In the areas where the NAO has had a look, such as the White City 2 project they have uncovered all sorts of waste and poor financial practice.�
So will the currently proposed BBC Trust make any difference? Will it bring greater levels of transparency?

JW - �However much the government argues that the proposed BBC Trust is an arms-length arrangement it is still part of the BBC � you still have this conflict of the BBC Trust being champions and defenders of the BBC whilst also being regulators of the BBC � in my mind you can�t do both.�

Whittingdale would have liked the Communications Act, 2003 to have changed the way that the BBC is regulated, bringing it under Ofcom at that point. However, he believes that many of the arguments are coming to fore again with the emergence of new media services, and that there is potentially now greater political support for changing the way the BBC operates.

JW - �If the BBC is going to provide new media content � which it plainly intends to - through interactive players, mobile phones, broadband downloads � and doing so for free � then that is going to have a considerable impact on the market. And it is rightly leading to huge expressions of concern from a wide range of voices in the industry.�

But hasn�t the Government proposed that Ofcom conduct a market impact assessment on new services? Won�t this curb some of the BBC�s ambitions in this area?

JW - �Well � as proposed � although Ofcom will have a role in assessing the market impact of services - the BBC Trust will make the decision as to whether the public value of the proposed service outweighs the market impact � and that to me is unacceptable. It means that whether something the BBC wants to do is in the public interest is decided by the BBC. And that � rightly � gives rise to a real concern amongst a wide range of commercial players � news providers, music companies, spoken word producers, archive film libraries � all of whom are faced by the BBC�s ambitions in this area.�

It is with this in mind that the Culture, Media and Sport Select committee have decided to hold an inquiry into new media, which will in part look at the impact of the activities of public funded broadcasters on commercial players in the new media market. This inquiry is likely to start in April/May.

But is the BBC � at least the BBC we know today � only able to survive with a licence fee arrangement? No advertising or sponsorship, public ownership, semi-public management - is that model sustainable in any other form?

JW - �In my view � and I am speaking personally � the licence fee is unsustainable in the long term. The licence fee has achieved acceptance on the basis that up until now everybody did actually access the BBC a lot � be it through radio, television or latterly online. The BBC has been a big feature in everybody�s life � but that is going to diminish. As more and more channels and services become available the justification for forcing people to pay for the BBC diminishes.�

And the government has failed to take this in account?

JW - �The government � with the proposal that they have put on the table - rather than address the problem of people being forced to fund the BBC when they don�t want to - have kicked it into the long grass and just left it for another ten years.�

There have been suggestions that the DCMS is not willing to compromise on its Green Paper and that it will push through the idea of the BBC Trust whatever the opposition. So will we see any changes between the Green and White Paper?

JW - �Well the fact that the publication date for the White Paper has shifted so many times suggests we might see at least some movement. It would be disappointing if we didn�t. The continued postponement suggests that at least some argument is taking place over the detail. If it were just a case of changing the cover from green to white then you would have thought it would have come out quite quickly. So, I think we will see some changes � it is possible that there might some movement in the area of new media services allowing Ofcom to have a greater role. Although Michael Grade is adamant he doesn�t want to concede an inch there.�

Presumably because this would be the beginning of external regulation?

JW - �Sure � and it is extraordinary to me that whoever is charge of the BBC � their absolute and total hostility to any kind of external regulation. The situation with the National Audit Office is just bizarre. The idea that the BBC is unique amongst publicly funded organisations � an organisation that gets �3 billion � should not have to be audited to see whether that money is being spent properly is just extraordinary.�

Is the BBC distinct?

JW - �Well a lot of what they do is distinctive and it is quite plainly public service and it is of very high quality. It has a range of great radio and television services � which the corporation uses to persuade everybody that �126.50 is jolly good value and that we should all be terribly pleased. But of course it is not really possible to judge whether this is value for money because you are required to pay it - how can you tell what value is when you have to pay for it whether you value it or not? So if you said to people � you don�t have to pay anymore � it would be interesting to see how many of them stopped.�