LONDON (Brand Republic) - The UK government has ordered a detailed inquiry into the BBC to see if the public service broadcaster is using the licence fee to fund commercial activity.
Culture secretary Chris Smith鈥檚 decision to investigate the BBC comes in response to complaints from rival commercial broadcasters about the corporation鈥檚 activities.
The investigation will explore whether there is enough separation between the corporation and its commercial operation BBC Worldwide. It will include a review of BBC Online and BBC News 24, which have been criticised for using up too much licence-fee money.
The inquiry, led by Richard Whish, a professor of law at King鈥檚 College London, is expected to take place after the general election.
The review could see the BBC relinquishing control of the collection of the licence fee, even though it has seen a 7.2% drop in licence-fee evasion between 1997-98 to 5.4%.
Critics say that the BBC鈥檚 database is expensive to maintain and would work better if handled by a private company.
Meanwhile, BBC director general Greg Dyke is understood to be planning a £12m deal that would see the corporation handle the presentation for the pay-per-view broadcast rights of the FA Cup and England international matches.
The proposals could see fans of live matches having to pay up to £10 a match to watch the 40 live Sunday afternoon games. The BBC would provide commentary for the matches using the popular Match of the Day team Gary Linekar and Alan Hanson, although the Match of the Day logo and tune would not be used.
The BBC has been meeting with Pearson, Deutsche Bank and Nomura, as well as with Telewest which is chasing the cable rights.
If Sky or ONdigital bought the pay-per-view rights they would be unlikely to want to enter into negotiations with the BBC.
The BBC鈥檚 money for the rights would come from commercial backers.