BBC Might Have to Share Its Licence Fee with Rivals; Light Entertainment: Television Hosts Ant McPartlin and Declan Donnelly with Cat Deeley

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Byline: James Chapman, Liz Thomas

THE BBC could be forced to share its [pounds sterling]3.2billion in licence fees withits rivals in the biggest broadcasting shake-up for decades, it emergedyesterday.

The media watchdog said an urgent funding review was needed to safeguardcurrent affairs, children's shows and home-grown sitcoms.

Ofcom said [pounds sterling]250million earmarked by the BBC to finance the digital switchovercould go to other broadcasters along with a chunk of licence fee cash.

Alternatively, ITV, Channel 4 and Channel 5 could be given state funding tomaintain public service broadcasting.

Both options are likely to provoke an angry backlash.

Greg Dyke, a former director-general of the BBC, said cutting the corporation'slicence fee would be a big mistake.

Opposition MPs said it would be wrong for taxpayers to subsidise broadcastersother than through the [pounds sterling]135.50 licence fee.

This levy funds the BBC's eight TV channels, ten national radio stations and200-plus websites.

Rival broadcasters say the licence fee gives the BBC a huge and unfaircommercial advantage in a multi-channel age.

The corporation's critics say BBC Online - the UK's most popular website -distorts the market.

Yesterday's Ofcom report said ITV, Channel 4 and Channel 5 were struggling tofinance quality programming.

It said there had been a 25 per cent drop in funding for public service showsover the past five years. Only soaps, drama, factual entertainment and sportwere likely to remain profitable.

Channel 4's financial future looks uncertain, Ofcom said, while ITV could beforced to give up its public service broadcasting altogether.

The watchdog's report set out a range of options, including making ITV1, Chan-

The fourth option involved nel 4 and Five purely commercial, leaving publicservice broadcasting to the BBC.

A second solution, it said, would be to pour public money into ITV1, Channel 4and Five to preserve their quality output.

A third choice would be for broadcasters to bid for long-term funding toprovide public service competition to the BBC..

The fourth option involved making the BBC and Channel 4 the main UK-wide publicservice broadcasters.

Ed Richards, Ofcom's chief executive, said: 'Public service broadcasting is ata crossroads.

'Viewers still want a mix of high quality UK-made content but the traditionaltelevision model is not enough to meet all their needs.' He insisted thatslicing money away from the licence fee would not be the deathknell for thecorporation.

'We do not see this as a choice between a well-funded, strong BBC and everybodyelse,' he added. 'I'm not going to accept this false choice between adiminishing and weakening BBC and a healthy broadcasting system.' TheConservatives have proposed a new broadcasting commission, which they sayshould be responsible for handing some licence fee cash to other broadcasters. …