While the BBC claims the panel's funding proposals do not go far enough and threaten the future of the BBC's digital output, commercial channels and consumer groups criticised the increase as a "digital poll tax".
The panel, headed by economist Gavyn Davies, proposes digital viewers be charged an extra £24 a year, starting next April. For viewers of analogue there will be no increase and it is proposed to phase out the digital charge before the analogue switch-off.
Commercial operators including Sky, Cable and Wireless, Granada, Carlton and OnDigital joined together to berate the proposals. Speaking on behalf of the commercial sector Clive Jones chief executive of Carlton said in a statement: "This poll tax will set back this new technology by years." Claiming that existing digital subscribers could hand back their set top boxes in protest at the charge, Jones warned the government is in danger of creating a society of 'information have-nots'. "Elderly people, the unemployed and the low paid cannot afford to pay £125 a year BBC licence fee," he said. He described the additional fee as a "final straw" for this group, preventing them from taking part in the digital revolution.
Davies denied the charge is a digital poll tax. "This piece of spin-doctoring is entirely without foundation. The temporary digital supplement will only ever be paid by those who decide voluntarily to migrate to digital television. The rest of the population will gain, since they will no longer have to subsidise the digital minority," he said.
The government is yet to make a decision about when analogue TV will be turned off. Some commentators think it could be as early as 2006 but the government is remaining tight-lipped both on its timetable and the future of analogue viewers. A spokeswoman for the Department of Culture, Media and Sport said: "The government is currently considering issues like take-up and is not prepared to give a date." A further announcement is expected in the autumn.
BBC Director-General Sir John Birt is disappointed the panel only recommended a fraction of the £650m the BBC demanded and warned BBC digital offerings may have to be cut as a result. Despite claiming two years ago that a digital tax would be a "tax on innovation", he said yesterday the funding recommendations would not be enough to support the BBCs planned digital content.