Adverts may help fund BBC Online

The Government may allow advertising on the BBC's Internet service, BBC Online, despite concerns that it may be against European Union rules.

The Government may allow advertising on the BBC's Internet service, BBC Online, despite concerns that it may be against European Union rules.

Chris Smith, the Culture, Media and Sport Secretary, raised the prospect of part-funding the website with advertising revenue because so many people living abroad were using it, none of whom had paid a licence fee.

Speaking to the Culture, Media and Sport Select Committee, Mr Smith said: "It does sadden me sometimes that services on BBC Online are used so extensively by people abroad and particularly news organisations abroad, who use it as a quarry for their own material."

Questioned by MPs over the prospect of advertising on BBC Online, he added: "I still do not rule it out". But he made clear that there could be a clash with the European Commission, which has strict rules on mixed state-commercial funding.

However, Sir John Birt, the outgoing director general of the BBC, warned MPs that any move towards carrying advertising on BBC Online could pose a "strategic threat" to the whole basis of the licence fee.

Sir John stressed that the BBC would be deeply opposed to any attempt to introduce advertising, warning that it would dilute the Corporation's public service remit.

"I think the history of the BBC and the history of broadcasting around the world shows the danger of introducing advertising into the mix because, at the margin, people make commercial decisions rather than public service decisions because of the means of their funding," he said.

He said that the Internet may in the future become the main means by which people receive all broadcasting services: "If you take that view, funding it by advertising would be a real strategic threat."

The Government rejected calls to put public money into BBC World, the public broadcaster's international satellite television channel. Labour and Liberal Democrat MPs demanded more funding to maintain BBC World's news and comment programmes, which would otherwise be cut.

But Peter Hain, the Foreign Office Minister, said BBC World was a commercial operation. "The Government sees no grounds for public funding of BBC World either from the licence fee or parliamentary grant-in-aid," he said.

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