The unanimous cross-party report also rejected pressure to privatise Radio 1 or Radio 2, saying the BBC should be allowed to keep all the radio services it currently provides.
It adds that BBC Radio and Television should not contain advertising, although the governors should be given the freedom to ask Parliament's permission if they decide they want advertising on radio.
The report was welcomed by John Birt, director-general of the BBC, as a 'generous recognition of the BBC's value and achievements'. It provided the corporation with valuable backing, as a White Paper on its future was prepared.
In a speech to businessmen in London, Marmaduke Hussey, chairman of the board of governors, said the BBC was planning a package of television and radio services for each region of the globe, in English and the vernacular.
'This is the opportunity for a broadcasting empire. An empire without frontiers . . . I want the BBC to be broadcasting's national leader in an export drive which I'm sure the new big ITV groups will be keen to follow,' he said.
However, Gerald Kaufman, chairman of the committee, said that the 1996 charter and licence agreement might be the last, since broadcasting was changing so rapidly.
He also said that Mr Birt was 'wildly optimistic' in assuming that the BBC could hold on to a third of the nation's viewing (compared with around 44 per cent currently) by the end of the century as competition intensified. The report emphasises its reservations and 'great reluctance' in coming to the conclusion that the present flat-rate licence fee should remain.
The committee's aim was to give the BBC a period of stability, in which it would have time to devise a role and a structure in difficult new conditions with potentially hundreds of TV channels, satellite, cable, subscription, pay-per-view and video on demand.
'The committee is confident that an organisation that has evolved so successfully in the past 70 years can meet its new, and perhaps its greatest, challenge.'
The report also recommends that the Government examines raising extra licence fee funds, either through a new car radio licence, or a one-off payment for those with car radios.
It also wishes to protect poor people on pensions and social security from the disproportionate effect of bearing the licence fee. To do so it recommends that the Government should consider the feasibility of introducing a reduced licence for households owning one TV set, with an extra, doubled licence for homes with two or more sets.
It also recommends that people who are unable to pay the licence fee should not be pursued through the courts.
Other key points include:
The BBC should continue to be regulated by Royal Charter and not by an Act of Parliament, underlining that it is not a creature of the Government;
There should be one body that deals with all complaints relating to radio and TV, whether broadcast by the BBC, ITV, independent radio, cable, satellite, or any other service;
The new licence agreement should positively encourage the development of specialist subscription services;
When effective means of disconnecting BBC Television services have been devised, non-payment of the licence fee should cease to be a criminal offence;
Hotels should have to pay the licence fee for each room with a TV, over the first 50;
The BBC should review who among the elderly is eligible for concessionary licence fees, to minimise anomalies;
The BBC should devise more aggressive marketing and sales policies to sell its programmes and services abroad.
The committee praises the World Service radio, saying it greatly enhances the UK's international reputation. It welcomes its expansion into television, but says it needs partners to go truly global.
BBC 2 is to axe 40 Minutes, the documentary programme which has run for 13 years.
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