What should we do with the BBC?

Why should British people be forced to pay for a service delivered to, say, Californians?

Once again, the BBC's future is under review. Today, Tessa Jowell, the Secretary of State for Culture, Media and Sport, will publish a Green Paper on its future funding - what should happen after the present royal charter expires next year?

Once again, the BBC's future is under review. Today, Tessa Jowell, the Secretary of State for Culture, Media and Sport, will publish a Green Paper on its future funding - what should happen after the present royal charter expires next year?

The headline issue is whether the corporation will keep the full licence fee or whether part of it should go to other broadcasters that carry out public service broadcasting. But underneath is a much larger issue of how the BBC's excellence can be sustained and even deployed more widely.

There are three big issues here. One is what happens to the BBC. Two is what happens to media technology. And three is how will people around the world use what we now call television but we will come to think of as something much wider: televisual entertainment, information and education.

The BBC matters in British terms for its public service role. There are plenty of ways in which its sports and entertainment services could be supplied to the country. You don't need a state-financed company to supply a programme such as Fame Academy or to cover Wimbledon. But, for historical reasons, what are essentially commercial products have been supplied along with public service ones. You would not invent the BBC if you were starting from here.

But it works and works wonderfully well. If you look at it in global terms, it is (and I know this is subjective) the best-regarded broadcasting organisation in the world. Its reputation for integrity has not only survived the fracas over its Iraq coverage: I think on balance its reputation has been enhanced since then, for it proved broadly correct in its reporting. It also now has a more effective chief executive and stronger management controls. At any rate, it is the best shot the UK has at securing global media clout.

Thedifferent ways of seeing the organisation lead to different sorts of analysis. On the one hand, you can talk about the future of the BBC in terms of the best way of providing public service broadcasting to the British domestic market. Hence the issue as to whether some of the licence fee should be taken away from the BBC and given to other broadcasters, so that they, too, can offer public broadcasting services.

On the other hand, you can have a quite separate debate about the best way of ensuring that the BBC competes effectively on a world stage. That leads into questions about its ownership and revenue sources. Would it be better able to compete in the global marketplace if it could tap finance markets for investment funds. If so, should it be a shareholder-owned corporation, or maybe a not-for-profit company but quite separate from the state and funded by a variety of sources, of which the licence fee would be a minor element?

Any debate about the broadcasting companies does not take place in a vacuum. We are just on the cusp of three technological changes that will utterly change visual media. They are digital, broadband and big screen.

You never know the effects of a technology - even if you can see the technology clearly - until you see how people want to use it. That takes time. We can see those three technologies clearly enough, but what we cannot see is the way they will interact with each other.

Take digital. Is this simply a means to make available more channels or is its real significance the integration, at last, of the television and the computer? Take broadband. A colleague's 17-year-old son does not bother to watch British TV at all. He simply downloads the US programmes he wants to watch on his computer. But is he pioneering the new way we will all watch TV in the future, or will the TV and the computer remain separate boxes, used for different purposes?

Or take big screen. Some people have argued that this enhances television at the expense of the computer: big screen is ideal for leisure use. With the extra quality of digital, it may give conventional television a new lease of life, enabling it to fight back against the computer. On the other hand, as Bill Gates argued in Davos last month, we may come to use big screen to hold lots of windows open at the same time. You could envisage people zapping in to the one that interested them most, which could be a sports event or a documentary delivered over the web.

What we certainly know - because it's happening already in print and radio - is that the new technologies give a global footprint to small and medium-sized media. Classic FM now has a substantial US audience, which listens over the net. Journalists on this newspaper find they have readers all over the globe in a way that would not have been practicable five years ago.

What we don't know is whether technology ultimately undermines the BBC or whether it boosts it by giving it full global reach. It certainly does undermine the principle of the licence fee. Why should British people be forced to pay for a service delivered to, say, Californians?

That leads to the third big change: how will we use what we still call television in the future?

Assume digital sweeps the world. Assume that the majority of the developed world is on high-quality broadband. Assume big screens become the norm. At that stage, and I guess we are talking about five years away, a majority of people in the developed world will be able to access any television company programme, any movie, any sports event, any university course, that they want. There will be user fees, of course, but the basic limit on the use people will make of the technology will be their time, not their money.

The most obvious effect will be that the big media groups will lose control of their distribution. It will be a shift as radical as the shift now taking place in the music industry, where downloading is killing the CD. But counterbalancing that loss of power will be the gain of global reach.

Now ask, how should the BBC operate in this very different world? It plays a hand of international strength and national weakness. It will become stronger, seen from a global perspective, thanks to its reputation, competence, body of talent, brand name. It is one of a tiny handful of media groups with global clout.

On the other hand, it will continue to lose market share in Britain for two reasons. One is that the time available to watch TV will continue to be whittled away by time on the computer. The second is that other global media can reach the UK market just as easily.

If this is right, Britain will need a different BBC. It will need a public interest broadcasting service, which would be much smaller and cheaper than the present BBC, doing the things that the great global media empires would not do. Whether part of the licence fee goes to other companies is a secondary issue. My own view is that if the BBC does public broadcasting well, then let it have the money, but review the matter and look at other bids.

The more important issue, surely, is how to help the BBC reach out to the world. If that means changing its ownership structure to give it more freedom and more money, then let's get on with it. Ensuring good public service broadcasting is easy. We know how to do that. Dominating global media - not leaving that to the Americans - is tougher. But what a goal, and are we not lucky to have such a player?