BBC 'to lose in internet TV loophole'

The BBC could lose "hundreds of thousands of pounds" in licence fee income due to a legal loophole that apparently allows viewers to watch television on the internet without a TV licence.

Licensing authorities have long held the view that anyone watching TV on a PC would still need a TV licence. But now, as The Times reported, media watchdog Ofcom and the Department for Culture, Media and Sport (DCMS) have doubted this claim.

The Times said Ofcom believes there is a grey area on the licence requirement for broadband television. The DCMS said it was "monitoring the situation" after initially suggesting a licence was not required.

The Times said the uncertainty left the BBC open to the threat that thousands of households would switch to PC-based services as they became available via internet protocol television.

Meanwhile, former BBC director-general Greg Dyke predicted the Government's Green Paper—expected to be published on Wednesday—would show BBC chairman Michael Grade has the support of culture secretary Tessa Jowell.

But Dyke warned that having Jowell's support did not necessarily mean Grade would win since she could eventually be over-ruled by Downing Street.

Writing in The Independent, Dyke said he did not believe that Grade would resign if the Green Paper supported the views of government advisers Lords Burns and Birt. Burns has called for a new body to govern the BBC, while Birt wants the BBC to share licence fee income with other public service broadcasters.

Dyke suggested a compromise for Tony Blair: support Burns on governance, and support Grade on the licence fee. "That way both sides can claim a victory and the BBC can get on with being an outstanding broadcater," said Dyke.

The Financial Times said Jowell's Green Paper would back the licence fee. An un-named government insider was quoted as saying: "Tessa has said she wants some elements of the paper to be statements of government policy. She is of the view that there is no viable alternative to the licence fee."

And an un-named former BBC director added: "No one expects anything enormously radical. It may be more of a final policy document—in effect a white paper—than critics of the BBC had been hoping."

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