Wraps off BBC license fee Jan. 18

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LONDON -- BBC bosses are expected to hear the outcome of their long-awaited license fee negotiations next week, with a result expected Jan. 18, according to senior sources at the pubcaster.

The result of the protracted negotiations between the BBC, the Treasury and the culture department is expected to be discussed at a government cabinet meeting on the 18th, with a formal announcement regarding the BBC's funding levels announced to the House of Commons by Culture Secretary Tessa Jowell the week after.

The BBC currently receives about £3.3 billion ($4.3 billion) a year to cover its television, radio and new media operations. About £3 billion ($3.9 billion) of that comes from the license fee, an annual per-household payment of £140 ($181), with the remainder generated by the BBC's commercial operations.

The BBC's senior managers already have resigned themselves to a significantly lower funding settlement than the pubcaster had originally called for, and director general Mark Thompson has described leaked government estimates of the settlement as "very disappointing."

According to the leaked reports, the BBC is expected to receive an annual funding increase of 3% for the two years beginning in April, followed by 2% for the next three years and a rise of up to 2% in the final year of the deal. The BBC had originally hoped for a 2.5% increase on top of the annual rate of inflation for six years, which would have worked out at roughly 5.5% a year. The pubcaster later scaled down its estimates to 1.8% plus inflation.

It is now resigned to an income increase that does not take inflation into account at all.

In the absence of the generous settlement it had sought, director general Mark Thompson is hoping to dramatically increase the revenues generated by its commercial division, BBC Worldwide, to make up some of the shortfall.

In addition to plans for the launch of an international media player, giving subscription access to the BBC's program archive outside the U.K., BBC Worldwide director John Smith is overseeing an expansion of the BBC's global channel business, which he said will result in "literally dozens" of new BBC branded networks in the next two years.

BBC Worldwide also is launching a series of social networking hubs relating to its lifestyle magazine brands.

Speaking at a Parliamentary briefing Tuesday night, cultural industries minister Shaun Woodward said that the settlement was still under discussion and had not been finalized.

"Despite all the rumors that people have heard in the media since Christmas, it is not finalized and will not be finalized until it goes through cabinet and we make a statement through parliament," he told lobby groups.

Of the intense media speculation relating to the BBC settlement, Woodward said some was "informed, some of it less informed and some of it is pretty accurate."
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