The first committee in the television era, the 1950s Beveridge Committee, had this
monopoly as its focus. In its submission to the committee, the BBC argued strongly
against ending its monopoly, since Gresham’s Law would operate “as remorselessly in
broadcasting as ever it did in currency. The good, in the long run, will inevitably be
driven out by the bad. […] And because competition in broadcasting must in the long
run descend to a fight for the greatest number of listeners, it would be the lower forms of
mass appetite which would more and more be catered for in programmes.”
The Beveridge Committee recommended that the BBC monopoly be continued, but
2 years later, a newly elected government rejected this, and in 1955 it established com-
mercial television in the UK, funded by advertising. This Independent Television (ITV)
had strict PSB obligations, and the new second television channel was not an alternative
to public service broadcasting. An advertising-funded commercial broadcaster could be
induced to supply specified kinds of programming in return for its license to operate.
Having one of just two television channels meant that ITV would enjoy significant scar-
city rents. (The phrase “a license to print money” was coined when the first ITV licences
were first awarded.) These rents could be used to fund programming that the regulatory
authority wished to see provided, but which would not be supplied voluntarily by
commercial broadcasters.
The next committee, the 1960s Pilkington Committee, was charged with how to
allocate a new, third television channel. Sir Harry Pilkington was very much a Reithian
in outlook and concerned with pervasive “triviality.” The committee found a lack of
variety and originality and unwillingness to try challenging subject matter, and identified
commercial television as the main culprit, which was unable to “understand the nature
of quality or of triviality, nor the need to maintain one and counter the other.” The
committee awarded the third channel to the BBC.
Finally, we fast-forward to 1986, the heyday of Margaret Thatcher’s government, and
to the Peacock Committee, which was set up to investigate alternatives to the BBC’s
license fee. This committee radically shifted the tone of the discussion in the UK, and
treated broadcasting more like any other product. It wanted a broadcasting system to offer
“full freedom of entry for programme makers, a transmissions system capable of carrying
an indefinitely large number of programmes, [and] facilities for pay-per-programme or
pay-per-channel.” The committee recommended that in the medium term (the 1990s)
the BBC should be funded by subscription, and that residual PSB requirements be
financed from a fund open to all broadcasters.
7.4.1.1.2 PSBs as a Response to Market Failure
Armstrong and Weeds (2007) analyze in depth the extent to which PSBs can be ratio-
nalized as a response to market failure. Quoting Gavyn Davies, they give credence to the
view that the mission of a PSB should not simply be to “inform, educate, and entertain,”
but to “inform, educate, and entertain in a way which commercial broadcasters, left
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