B1535 – British Broadcasting Corporation Bill Bill 2019 (Second Reading) Watch

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Andrew97
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B1535 - British Broadcasting Corporation Bill Bill 2019 (Second Reading), TSR Conservative and Unionist Party




An Act to require the abolition of the license fee in favour a sustainable funding model which allows long term growth for the BBC rather than continued restraint.

BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:—


1. License Fee
(1) The License Fee his hereby frozen at its current rate indefinitely.
(2) Should the non-license fee revenues of the British Broadcasting Corporation exceed the value of the License Fee, the License Fee will be abolished.*

2. Equity
(1) An Auction will be held by the BBC every three years allowing nine corporate clients to purchase a Fixed term Equity Stake in the British Broadcasting Corporation
(i) The Duration of this Fixed term investment would be 3 years
(ii) The individual equity stake would be 5% of the value of the British Broadcasting Corporation as of the date of sale
(iii) The value will be that declared in the BBC Group Annual Report and Accounts of the previous financial year.
(iii) At the end of the three year term the BBC will purchase the equity stake based on the BBC's value at the time at which it was bought.
(2) Each Equity Holder must also purchase a corporate bond to the equivalent value of the equity stake
(i) Nine Fixed Term Corporate Bonds will be created at an annual yield of 4%
(ii) The maturity length of these Corporate Bonds will be 3 years
(iii) Any premium generated by the auction of either the equity or corporate bond stakes will be held by the BBC.
(iv) If the minimum 5% value is not reached, the respective equity stake or corporate bond will not be sold.
(4) Equity Holders will be referred to as the British Broadcasting Partners.
(5) The British Broadcasting Partners will be granted board seats equivalent to their equity stakes with full shareholder rights.

3. Advertisement Exclusivity
(1) The British Broadcasting Partners will have the right to advertising exclusivity for the duration of their investment
(2) Each British Broadcasting Partner will each hour hold the right to a 20 second advertisement slot on each Television channel
(i) Sale of that slot to another firm is permitted on an hourly basis

4. Commencement, Extent and Short Title
(1) This Act extends to the whole of the United Kingdom.
(2) The provisions of this Act come into force on 1st April 2021.
(3) This Act may be referred to as the BBC Act 2019.

Notes
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The BBC (British Broadcasting Corporation) has existed as a state owned enterprise since 1922 providing at times vital public service broadcasting.

Over the past 10-20 years in particular however the BBC has come under intense competition from much larger firms with a global reach. In addition to that, the viewing habits of its audience have changed.

With the BBC subject to being at the mercy of the License Fee it has struggled to maintain its place relying on ever more repeats and being unable to hold onto popular shows such as The Voice or the Great British Bakeoff or Formula One (in the early 2000’s it even briefly lost Match Of The Day).

This bill proposes to grant the BBC the freedom to compete with greater funding while preserving the minimal advertising. It also aims to allow the private sector to aid the BBC in innovating its structures and procedures to become a more efficient organisation.

In terms of the finance associated with this bill the BBC's most recent financial statement asserts a value of £1.172bn making the nine 5% equity stakes worth ~£58m each along with the equivalent bond for a total capital stream of ~£117m from each British Broadcasting Partner (~£1.054bn over the three year period). Thanks to our resident accountant the Rt. Hon. JammyDuel we can also estimate that the advertising rights laid out will generate a premium of approximately ~£192 million per year for each British Broadcasting Partner allowing a total increased access to capital of ~£2.7bn over the three years (of which ~£1.1bn will be reimbursed every three years before being replaced by the next equity and bond auctions and their respective premiums).

Section 1 outlines the eventual abolition of the License Fee as an antiquated method of funding a multi-billion pound organisation and indefinitely freezes in statute the License Fee at its current rate.

Section 2 outlines the creation of an equity vehicle designed to allow private firms to obtain a stake in the BBC so that they have a stake in how the firm is run and also outlines the creation of corporate bond designed to allow the BBC access to significant liquidity such that they are able to compete with rival broadcasters.

Section 3 outlines the rights that these business partners will hold with regards to minimal but exclusive advertisement giving them further incentive to invest.*

Section 4 is procedural outlining the relevant fiscal changes to begin on 1st April 2021.

Due to canon, no cost is attached is attached to this bill.

BBC Group Financial Report..

http://downloads.bbc.co.uk/abouttheb...rt/2018-19.pdf


Changes For Second Reading
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- Section 1.1 has been amended to freeze rather than abolish the License Fee indefinitely.
- Section 1.2 has been added to put in statute the requirement for abolition of the License Fee.
- Section 2.1 has been amended to clarify that the BBC will hold an auction process every three years and that the value of the equity and bond stake will be that which is laid out in the BBC's company accounts.
- Section 2.2 has been amended to clarify that any premium generated by the auction process will be kept by the BBC and that if the minimum 5% reserve value is not reached, the respective equity stake or corporate bond will not be sold.
- Section 3.2 has been amended to clarify that the advertising rights will be for all BBC group TV channels.
- The Notes have been amended.

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CatusStarbright
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I feel like the author has tried to compromise between different people's positions but is in reality now going to please nobody with this.
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Rakas21
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(Original post by CatusStarbright)
I feel like the author has tried to compromise between different people's positions but is in reality now going to please nobody with this.
Personally speaking i actually have no objection to outright privatisation (i'd possibly have the state maintain a small stake if it wants to maintain parts of the charter like responsibility for educational shows) but there is certainly no majority for that. I am reasonably confident that i have the numbers for a solution such as this.
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JMR2020.
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The BBC has problems but is generally value for money and produces some very high quality content apart from some of the news which I do have problems with. So I will be voting against.
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LiberOfLondon
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This bill has been watered down far too much - Nay.
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Jammy Duel
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And now the rationale for having the bill in the first place is gone, namely to get rid of the licence fee.

(Original post by Rakas21)
Personally speaking i actually have no objection to outright privatisation (i'd possibly have the state maintain a small stake if it wants to maintain parts of the charter like responsibility for educational shows) but there is certainly no majority for that. I am reasonably confident that i have the numbers for a solution such as this.
And yet again I refer you back to the last attempt at privatisation, something you refused to vote for and only failed due your own party failing to support it, can you confirm that should a bill for privatisation be put before your party they would reject it, and that you would once again refuse to support it if the term of privatisation did not include the state determining the funding model?
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The Mogg
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I have to admit that the only reason I gave this bill the thumbs up initially was because it abolished the license fee, ignorantly not really reading the rest of the bill. But now with the fee frozen instead of abolished, I'll have to abstain on the bill if it goes to division.
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Baron of Sealand
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This is the child's friendly version of it, thus the title says "Bill Bill".
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Mr T 999
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A 2nd reading of a bill is supposed to make a improvement this made it worse.
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TheRadishPrince
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I wouldn't support this either.
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Rakas21
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(Original post by JMR2019.)
The BBC has problems but is generally value for money and produces some very high quality content apart from some of the news which I do have problems with. So I will be voting against.
Can you confirm you have the bill? You are voting against a bill which increases bbc funding.
(Original post by TheRadishPrince)
I wouldn't support this either.
Can you outline your reasons why?
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shadowdweller
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Still a nay from me.
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Rakas21
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(Original post by shadowdweller)
Still a nay from me.
Because..
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shadowdweller
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(Original post by Rakas21)
Because..
Essentially the same rationale as JMR2019. above - though without the issues with their news, from my side
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Rakas21
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(Original post by shadowdweller)
Essentially the same rationale as JMR2019. above - though without the issues with their news, from my side
Given that this bill increases BBC funding and does not abolish the license fee anytime soon I am bemused.
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TheRadishPrince
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(Original post by Rakas21)
Can you outline your reasons why?
Going from a Bill that abolishes the license fee to maintaining it (freezes or not) defeats much of the point of the original.

I also do not like suggestions surrounding advertisements and have major concerns that something like this shall eventually lead to BBC programming having more and more ads over time, whilst (due to this reading), the British public is still forced to pay.

It creates too slippery a slope between current BBC advertising standards and the potential for too much advertising in the future should this be misused. I'd even prefer the current system to this.
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barnetlad
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I don't want adverts on the BBC, and it would take money away from ITV and other free to view channels. I don't want the possibility of a provider being out of business after 3 years, which provides no security or any incentive to develop programmes over years.

Nay.
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Rakas21
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(Original post by TheRadishPrince)
Going from a Bill that abolishes the license fee to maintaining it (freezes or not) defeats much of the point of the original.

I also do not like suggestions surrounding advertisements and have major concerns that something like this shall eventually lead to BBC programming having more and more ads over time, whilst (due to this reading), the British public is still forced to pay.

It creates too slippery a slope between current BBC advertising standards and the potential for too much advertising in the future should this be misused. I'd even prefer the current system to this.
While it baffles me that supporters of the BBC remaining public would choose to restrict their funding rather than have a small amount of advertising, that is a fair view.
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Jammy Duel
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(Original post by barnetlad)
I don't want adverts on the BBC, and it would take money away from ITV and other free to view channels. I don't want the possibility of a provider being out of business after 3 years, which provides no security or any incentive to develop programmes over years.

Nay.
Not a single channel is free to view due to the TV licence
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CatusStarbright
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(Original post by Jammy Duel)
Not a single channel is free to view due to the TV licence
You can use their online services without having a TV licence though I believe.
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