Government launches investigation into BBC

Enquiry to question whether public money goes into commercial division

The government is considering launching an investigation into the commercial activities of the BBC that would include a review of its news Web site BBC Online, following complaints from companies that the public service broadcaster is competing unfairly.

Culture secretary Chris Smith announced that the enquiry would investigate whether the BBC has been using licence-fee money to subsidise its commercial services. He has indicated that there must be a clear division between the BBC's public service broadcasting and its commercial arm, BBC Worldwide.

The review comes at a time when many Internet companies are feeling the pinch from falling online advertising. BBC Online does not rely on advertising but competes with many commercial Web news and information services for readers. The BBC also plans to launch an international news Web site later this year which will be funded by advertisements. It intends to block UK users from accessing the site although experts have questioned whether this is possible.

A spokeswoman for the BBC says that its service is already regulated strictly. "The service is already subject to review by BBC governors and parliament," she says.

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