The Government is looking into new ways to scrap the TV licence
Paying your annual TV licence fee could be scrapped …just as soon as broadband speeds across the country are up to scratch, the Government has hinted. The new suggestion comes from Minister of State for Media and Data John Whittingdale MP, who claimed that moving to a Netflix-style subscription for the TV licence could work – but only when fast broadband speeds are universal across the UK.
As it stands, the TV licence costs £157.50 a year, although that’s set to increase to £159 next month. The cost of an annual black-and-white TV licence is also set to rise, from £53 to £53.50 a year. Anyone who watches live broadcasts – including those airing on streaming services, like Amazon Prime Video, ITV Hub, and NOW TV – needs to be covered by a TV licence. However, you won’t need a TV licence to watch on-demand or catch-up shows, like those found on Netflix. The one exception to this rule is BBC iPlayer, which requires a TV licence regardless of whether you’re watching on-demand boxsets, films or live channels.
The cost of the TV licence is determined by the UK Government. Back in 2016, it confirmed the price would rise in line with inflation for five years, starting from April 2017. The latest increase, which was announced earlier this year, was calculated using an inflation figure of 1.075 percent. This was the average Consumer Prices Index (CPI) inflation in the year ending September 2020. BT and EE use the same CPI to adjust their television, broadband and mobile phone plans each year too.
The Government is currently conducting a mid-term review of the Royal Charter, investigating whether to change how the cost of the TV licence will change between 2022 and 2027. Although there have been suggestions of moving to a Netflix-style monthly subscription in 2022, John Whittingdale MP says this is more likely to happen in 2027 due to broadband speeds nationwide.
Broadband speeds will need to increase nationwide before a Netflix-style subscription would be viable
According to Ofcom, there are around 600,000 homes and businesses in the UK without access to broadband speeds above 10Mbps. Until that changes, a radical rethink of how the TV Licence model could work really isn’t going to be possible
Speaking to The Times, Whittingdale said: “Young people are turning more and more to video-on-demand services. That does beg the question about whether or not the licence fee model, which has been based on the fact that everybody used the BBC, can continue. The rollout of broadband is very fast, we will reach universal coverage, and there will come a time when it would be possible for us to move towards a full subscription service for everybody, but that time has not yet arrived.”
Following the rise of video on-demand services – most of them imports from the United States – there has been increased scrutiny around the TV licence. Under the current rules, anyone found to be “watching, recording or downloading programmes illegally” will be fined a maximum of £1,000 (£2,000 if you live in Guernsey) as well as legal costs and compensation you might be ordered to pay too.
As more people download shows from the likes of Prime Video, Disney+, Netflix, All4, Apple TV+, Shudder, StarzPlay, and dozens more… it’s becoming harder to justify the current TV licence model.
For its part, the BBC has suggested alternate funding models. Last year, it outlined plans to drop the TV licence in favour of a new levy or tax on broadband bills – as this is increasingly the delivery method for viewers to watch shows, live sporting fixtures, Hollywood blockbusters, and more.
TV licence fee: BBC ‘need new business model’ says expert
It’s increasingly clear that whatever happens to the TV licence going forward, it’s highly likely to be tied with home broadband. John Whittingdale MP clearly believes that an optional monthly subscription service à la Netflix would work, while the Beeb has suggested a non-negotiable levy for anyone planning to use their home internet connection to stream telly is the best option.
Either way, it’s unfortunate that Prime Minister Boris Johnson has decided to quietly walk-back his pledge during the General Election to “level up” broadband infrastructure across the country with future-proofed gigabit-capable cabling to every home by 2025. It’s a pledge that Boris Johnson repeated during multiple daily coronavirus briefings last year too as journalists and members of the public stuttered and buffered as they used Zoom to ask questions to the Prime Minister.
However, in its subsequent national infrastructure strategy filing, the Government walked back its commitment – stating that faster internet speeds will now only be available to 85 percent of premises within the next five years.
Gigabit-capable connections provide speeds up to 1,000Mbps. Given that Netflix only recommends 5Mbps for High Definition streaming and 25Mbps for 4K quality video, these future-proofed broadband connections are more than enough to handle working from home, videoconferencing, boxset binges at the weekend, on-demand content from Sky and other providers, downloading updates to smartphones and games on next-generation video game consoles, and uploading back-ups.
Unfortunately, the vast majority of the UK is struggling with speeds much, much slower than that.
Glacial home internet speeds continue to be a problem – something the requirements to work from home and stay inside during the national lockdowns has thrown into relief. According to the latest research, published back in September by Cable.co.uk, shows the UK is now 47th when it comes to downloads with an average speed of 37.82Mbps. At that rate, it should take roughly 15 minutes to download a feature-length movie in High Definition (HD).
As it stands, you need to be covered by a valid TV Licence to watch anything on iPlayer
The UK manages to trump 174 other countries globally but falls way behind 46 other nations in the speed league, including 21 in Western Europe. This puts the UK among the slowest in Europe when it comes to average broadband speed. To make matters worse, Britain has lost ground between the measurements in 2019 and those recorded last year. Yikes.
The 2020 test confirmed the UK had fallen behind Jersey (218Mbps), Gibraltar (183Mbps), Iceland (116Mbps), Switzerland (110Mbps), Norway (67Mbps), France (51Mbps) and Estonia (70Mbps). The Government has pledged to bring full-fibre broadband – with speeds comparable to these European nations – to more households soon, but these speedy new connections aren’t expected to be plugged in until the mid-2020s.
If you want the very best speeds right now, moving to Liechtenstein could be the answer as this country is ranked top for downloads with an average speed of 229Mbps. At that rate, it takes just 2 minutes 30 seconds to download an HD blockbuster – six times quicker than in the UK.
BT boss Philip Jansen has previously warned that the rollout target of 2025 would likely be missed by more than eight years without sweeping reforms to the sector, including business rate cuts and relaxation of major planning laws.
Prime Minister Boris Johnson has promised to bring gigabit speeds to every household, but that’s not going to happen
The UK has some of the worst broadband speeds in Europe, something that makes a rethink of the TV Licence more difficult
Without the Government’s commitment to bringing full-fibre cable across the UK, commercial roll-outs of the future-proofed infrastructure is widely-believed to reach some 80 percent of homes and businesses. However, connecting the remaining 20 percent is too pricier to be commercially viable without subsidies from the Government. Without those, broadband providers could leave thousands with drastically outdated internet connections.
According to Ofcom, there are around 600,000 homes and businesses in the UK without access to broadband speeds above 10Mbps. Until that changes, a radical rethink of how the TV Licence model could work really isn’t going to be possible.