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News that the BBC has submitted evidence to the Government stating that its impact on ad revenues represents just £4 million of the total online market of £7.6 billion has been met with disbelief from digital publishers.

The research, commissioned by the BBC and carried out by KPMG, also suggests the organisation may have boosted online advertising by attracting up to two million people online.

"That figure of £7.6bn is utter nonsense and completely unrepresentative," asserts Hugo Drayton, managing director of Hollinger Telegraph New Media and chairman of the British Internet Publishers Alliance. "It bundles together online advertising, ISPs and other commercial services."

Richard Pembroke, managing director of Rivals Digital Media, which owns sports sites Football 365 and Planet Rugby, says: "I believe the £4 million figure is considerably lower than the actual impact that the BBC has on the commercial online sector."

The Interactive Advertising Bureau (IAB) doesn't have a figure for the overall worth of the UK internet industry, but its latest PricewaterhouseCoopers audit values the online media sales market at £200m a year.

The BBC declined to comment on the content of the report. "We believe the KPMG report, once published, will speak for itself," said a spokesperson.

The research was submitted in advance of a government review of the BBC's online activities. "We will review all new BBC services after a period of three years," says a spokesperson for the Department of Culture, Media and Sport. "We look at whether the conditions attached to new services when they were approved have been met."

The BBC's digital news service, BBC News 24, underwent a similar review last year, headed by former Financial Times editor Richard Lambert.

Recommendations included the revision of the channel's remit to give it a clearer sense of direction. The BBC governors were required to publish a response to the report and publicise a revised remit for BBC News 24, taking the recommendations into account. It is likely that the online review will follow a similar pattern.

Digital publishers welcome the review, but don't expect too much. "I'm heartened by the fact that at least there is now an acceptance by the BBC and the Government that they have to take stock of where the money is going," comments Pembroke. "But I am not holding a huge amount of hope that anything substantial will change."

"The review is overdue, but something is better than nothing. At least the BBC and DCMS understand that there is an imbalance," agrees Drayton.

Most commercial online publishers believe the BBC's impact on the commercial sector is huge. "When I gave evidence at the Government select committee into this issue back in the late 90s, the point I pressed home was the fragile economics of the business models of online media," points out Danny Meadows-Klue, chief executive of the IAB. "Audience is the key in all of this and the scale of the BBC's audience is so great that, unquestionably, it distorts the market," he adds.

"We hope that the review will show that our impact on the marketplace, as we've always maintained, is minimal and far outweighed by the benefits we bring to the industry," counters the BBC spokesperson.

According to Drayton, the two areas that are particularly affected are sport and entertainment, which "the private sector does really well. I am not so bothered about news as people worldwide look to the BBC for impartial news," he adds.

E-learning is another area in which the commercial sector is finding it difficult to compete with the BBC.

Last year, the British Education Suppliers' Association commissioned a report in conjunction with research firm SRU, which found that digital publishers were set to lose £400m because of the BBC's commitment to producing a 'digital curriculum' for schools.

The Government has since given schools £300m, which is earmarked for the purchase of e-learning materials. However, Ray Barker, director of BESA, believes there is still a problem. "We're still £100m short in that sum," he says.

"The difficulty is that most digital producers go to venture capitalists to get backing. When they say that they are competing with the BBC, which is giving material away for free, the venture capitalists don't want to know," adds Barker.

With conflicting research and opinions flying about, there will be a lot of pressure on whoever heads up the upcoming review to mediate between the demands of the commercial sector and the demands of the BBC. The industry will be hoping that they can do a good job.