Switching to a monthly Netflix-style subscription is not possible at current broadband speeds
Government proposals to abolish the BBC TV license fee and replace it with a monthly Netflix-style subscription from 2027 have been thrown out in a new report by the Department of Digital, Culture, Media and Sports (DCMS) selection committee. According to the report, the UK government “left no option for the license fee” because it “failed to put in place the necessary broadband infrastructure that would facilitate other funding mechanisms”.
Prime Minister Boris Johnson has tacitly withdrawn his parliamentary election promise to upgrade home Internet infrastructure across the country with future-proof gigabit broadband for every home by 2025. When millions of us last worked, studied, and socialized on the Internet from home this year, the government tacitly reduced its obligation to bring high-speed broadband to every home – to 85 percent of the space – within the next five years.
Critics have pointed out that the last 15 percent will be the most rural areas where it may not be financially viable for businesses to deploy broadband. Boris Johnson had originally promised to solve this with his £ 5 billion broadband for war chests. Unfortunately, these homes are now likely to leave without the upgrade.
Worse, broadband speeds across the UK are currently not good. According to a study by Cable.co.uk published last year, the average home internet connection in the UK is 37.82 Mbps, at which speed it should take about 15 minutes to download a high definition (HD) movie. This puts Great Britain – the sixth largest economy in the world – behind 46 other nations worldwide in the speed league, including 21 in Western Europe.
And it is these miserable speeds that DCMS has identified as the reason why plans to replace the existing TV licensing model cannot be carried out as planned in time for the next review.
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In its report, the DCMS selection committee warned of delays in the government’s “full fiber broadband rollout” due to the fact that a “fully online public service broadcasting system that enables universal access is not yet feasible”. If everything the TV license is paid for goes online now, a lack of broadband access and a lack of digital literacy would result in “1.8 million households losing television and public broadcasting services,” the report warns.
Streaming services like Netflix, Disney + and Amazon Prime rely solely on the internet to distribute content – with no terrestrial channels.
In its damned conclusion, the latest report says that a monthly subscription service like the one offered by Netflix and Prime Video is not working at the current state of broadband speeds in the UK. In this respect, the DCMS Select Committee scolds the government for either devising a “strong alternative to the license fee” to be presented to parliament, or “strongly supporting the current model at least for the next charter period” and helping the BBC crack down on TV license fraud.
The next charter period runs from 2028 to 2038, by which time (fingers crossed) the UK broadband network will look a little healthier.
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Julian Knight MP, Chairman of the DCMS Committee, said, “It is clear that the BBC TV license fee has a limited shelf life in a digital media landscape. However, the government missed the boat to reform it. Instead of finding a viable alternative, it has sealed its own fate by failing to develop broadband infrastructure that would allow serious consideration of other means of funding the BBC.
The government is effectively allowing the BBC to bleed by not paying royalty as speculation continues about decriminalizing royalty evasion, a situation it must end
In addition, the government is effectively allowing the BBC to bleed from royalty failure as speculation continues to decriminalize royalty evasion. This situation must end. In order for public service broadcasters to compete in a digital world, ministers need to renew broadcasting laws, which are almost 20 years old.
“It’s a matter of awareness – too often, public service broadcasters lose out on dominant platforms with content that is hard to find or unbranded. There is more that public service broadcasters should be doing for themselves, however, and only by pooling resources can they hope to compete with companies like Netflix and the platforms. The collaboration between the BBC and ITV on ‘BritBox’ is a striking example of how they can work together to create a ‘one-stop-shop’ for video-on-demand content – a model for future work. “
Netflix recommends a speed of at least 5 Mbps to stream content in high definition (HD). You need at least 25 Mbit / s to watch in Ultra HD 4K quality. The DCMS report acknowledges that around 10 Mbps should be enough to watch TV broadcasts online. However, 190,000 businesses across the UK cannot even manage this right now.
While 5Mbps may not sound like much for HD content from Netflix, keep in mind that your home broadband connection rarely handles just a single stream. Kids could watch another show upstairs, laptops could secure themselves, friends could make a FaceTime video call, or someone could shop online while they watch TV. It doesn’t even take into account updates to your smartphone apps, updates and purchases of video games, collaboration on work documents, and much more.
Broadband companies have warned that the shift from television channels to broadband cables could also increase demand, putting even more strain on existing networks.
This does not take into account the 2.7 million adults currently living in the UK who cannot or do not want to use the Internet at all.
Given the huge popularity of streaming services and the no-contract monthly subscription service that pays for them, the TV license likely lives on borrowed time. However, as the DCMS report points out, these issues must be resolved before the current wholesale financing model can be replaced. With the time remaining until the start of the next charter period, it is unlikely that Boris Johnson and his teams will find a solution in the next six years.
Currently, the TV license costs £ 157.50 a year, although it is set to rise to £ 159 next month. The cost of an annual black and white TV license will also rise from £ 53 to £ 53.50 per year. Anyone who watches live broadcasts – including those that are broadcast on streaming services like Amazon Prime Video, ITV Hub, and NOW TV – must have a TV license. However, you don’t need a TV license to watch on-demand or catch-up shows like the one on Netflix.
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The only exception to this rule is the BBC iPlayer, which requires a TV license whether you’re watching on-demand box sets, movies, or live channels.
The cost of the TV license is set by the UK government. As early as 2016, it was confirmed that the price will rise in line with inflation for five years from April 2017. The most recent surge, announced earlier this year, was calculated using an inflation figure of 1.075 percent. This was the average consumer price index (CPI) inflation in the year through September 2020. BT and EE also use the same CPI to adjust their television, broadband and mobile plans each year.
The government is currently conducting a mid-term review of the Royal Charter looking to change how the cost of the TV license will change between 2022 and 2027.
For its part, the BBC has proposed alternative funding models. Over the past year, plans were outlined to drop the TV license in favor of a new levy or tax on broadband bills – as this is increasingly the delivery method for viewers to watch shows, live sporting events, Hollywood blockbusters and more.