BBC trims licence fee rise after spectrum charge delay

LONDON - The BBC's attempt to raise the licence fee is likely to be scaled down after broadcasting regulator Ofcom announced it was to delay the introduction of the digital spectrum charge until after the digital switchover process is completed in 2014.

The corporation had previously wanted to increase the licence fee to 2.3% above the rate of inflation, which accounted for the £300m digital spectrum tax deficit expected between 2007 and 2014. However, Ofcom's decision to postpone the introduction of the new tax means the BBC is likely to reduce its application to just 2% above inflation.

Ofcom is keen for all broadcasters to pay for digital spectrum usage as an efficiency incentive to ensure that the service, which is already nearing full capacity, is used more economically.

Channel 4 and the BBC have never paid the digital spectrum charge, but ITV, which currently pays out £75m a year, has been told by Ofcom that its charge could drop to between £18m-£32m in the future once the new proposals are drawn up.

It is understood the BBC's charge will be in the region of £32m-£48m, with Channel 4 likely to have to stump up £8m-£12m a year when the new tax is introduced.

The BBC is reportedly against any digital spectrum charge for public service broadcasting, but ITV has welcomed the introduction and the delayed start date.

ITV is not the only body to pay a charge for spectrum, with the emergency services, the Ministry of Defence and commercial radio stations all liable to pay charges for spectrum usage.

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