BBC Faces Major Overhaul

By Paul Sandle and Michael Holden

LONDON (Reuters) - Britain stepped back from cutting the size and scope of the BBC on Thursday after the publicly-funded broadcaster and some of its biggest stars had accused ministers of threatening the independence of the 94-year-old institution.

Unveiling its once-in-a-decade review, the government said a new governing body would be created to oversee the BBC, and the salaries of its best-paid employees would be made public to improve transparency and address concerns that Britain's biggest player in TV, radio and online news stifles rivals.

But the government avoided more extreme measures such as allowing ministers to tell the BBC what to air during prime-time TV periods such as Saturday nights, or forcing it to hand over some of its income, derived from a levy paid by nearly every household, to other commercial broadcasters.

"The BBC is one of the country's greatest institutions. It is our overriding aim to ensure that the BBC continues to thrive in a media landscape that has changed beyond recognition since the last charter review 10 years ago," Culture Secretary John Whittingdale told parliament.

The BBC's extensive services, estimated to reach 97 percent of Britons each week, are funded by a guaranteed income of 3.7 billion pounds ($5.35 billion) from a license fee imposed on all TV-watching homes.

It is fiercely resistant to any change that it says would make it less popular with the public who pay for it.

Critics, however, say it is a bloated organization that swamps commercial rivals, for example in providing free and extensive online news and information, meaning many commercial groups struggle to charge for their content.

Others have said its news coverage is politically biased, although critics disagree as to whether it is biased to the right or to the left.

"There has been a big debate about the future of the BBC," BBC Director-General Tony Hall said. "Searching questions have been asked about its role and its place in the UK. That’s right and healthy, and I welcome that debate."

Whittingdale said the BBC Trust, its governing body, would be replaced with a new unitary board which would still allow the corporation to appoint a majority of members to ensure independence.

External regulation will be handed to Ofcom, the communications watchdog which oversees commercial broadcasters, he said.