This is taken from The Guardian:

CBI chief criticises BBC's licence fee bid
by Ben Dowell
Wednesday November 1, 2006

Richard Lambert, the director general of the Confederation of British Industry, last night poured cold water on the BBC's bid for an above-inflation licence fee increase.

Delivering the annual Wincott Lecture in honour of former Financial Times editor Harold Wincott, Mr Lambert, also an ex-FT editor, insisted there were "good reasons for challenging the view that an arrangement which made sense when the BBC was the only national broadcaster around is still the best option available today".

"Moreover, the existence of a state-financed broadcaster curbs the opportunities for market-driven news providers. For example, the BBC's 24-hour news service provides direct competition to Sky. And its highly successful news website makes life very hard for newspapers which are competing for the same audience and which are not supported by the BBC's vast newsgathering resources.

"There is a growing risk that the existence of such a powerful publicly funded broadcaster will enfeeble other news organisations in the UK, whatever their main channels of distribution."

Mr Lambert - a member of the Bank of England's rate-setting Monetary Policy Committee who took up the £300,000-a-year CBI post in July - added that he was not calling for the abolition of public service broadcasting as it "may well also be the best way of addressing the digital news divide, which looks at least as big a threat in the UK as it does in the US".

However, he said: "It would be surprising if the BBC were to be the one organisation to emerge unscathed from this media maelstrom, and if there weren't to be growing arguments for public funding to be distributed more widely among different news providers at a local as well as a national level in the future."

In 2002, Mr Lambert wrote a report about BBC News 24 which was commissioned by the culture secretary, Tessa Jowell. In it, he praised improvements made to its service - but said it must become "distinct" from its rivals.

"The channel is not yet as good as the BBC claims it is, or as good as it could be," his report said.

Mr Lambert's call comes in the same week that a group of 14 senior academics attacked the BBC's commercial competitors, insisting are attempting to "diminish" the corporation by lobbying for a lower licence fee settlement.

The academics, who included Professor Steven Barnett from the University of Westminster and Cambridge University academic Georgina Born, wrote to the Financial Times insisting that the BBC be given a settlement which "allows it to fulfil all the programming obligations laid out in the white paper.

"We believe there is now a very real danger of a financially and therefore institutionally emasculated BBC."

The letter adds the BBC is a "trusted ambassador for Britain" and calls on the government not to force the corporation to "reduce its vision or scale through the back door of inadequate funding".

Earlier this month, the corporation revised its bid for increasing the licence fee down to an annual rise of 1.8% above inflation.

The BBC director general, Mark Thompson, announced the bid would come down from the 2.3% above the retail price index that the corporation set out a year ago.

He said that while some projected costs, such as the BBC's pensions budget, had gone up over the past year, others, like the planned move of 1,800 staff to Manchester, had gone down.