A licence to bend our ears, open our eyes and provoke criticism

It is fashionable to criticise the BBC and the system of funding programmes by means of a licence fee, while inside the corporation a special edition of `Ariel' shows that all is not well with staff morale. But, argues

Will Wyatt, the corporation has served listeners and viewers well for 75 years and is the envy of most other countries. As for its plans for the future, there are some surprises in store ...

Is the party really over for the BBC? While generous tributes flowed in for its 75th anniversary last week, I was conscious of some nettles among the bouquets. Achievements were recounted and the history of broadcasting was reflected. But the sweet smell of success was soured by something ...

As the anniversary approached, the BBC spent time looking to the future as well as back. We aim to take the great traditions forward, with new channels and new services for a new age.

Broadcasting is an industry of which Britain can be proud. It retains its position as an undisputed world leader.

Today, the transition from analogue to digital technology is presenting broadcasters with challenges and opportunities on a scale exceeding anything - even the advent of television itself - that we have seen before. For the BBC, the long-term significance of 1997 is that this is the year in which digital is becoming the technology of the present, not the future.

The implications are immense. Digital broadcasters are different from others: they have more channels. More channels means more competition; more competition means fragmentation of the market; this means erosion of audience share. In a few years' time analogue-only broadcasters - if there are any - will look as anachronistic to audiences as black-and-white television channels would today.

On the verge of such a revolution, it's no wonder that many people question whether public service broadcasting can make the transition to the digital age.

The BBC is in good shape to do so. We start in a far better position than in the Fifties, when the breaking of its monopoly last presented the BBC with a challenge on a similar scale. As David Elstein pointed out in last week's Reed lecture, the launch of ITV in 1955 soon took 70 per cent of the television audience away from the BBC. It demonstrated dramatically that Lord Reith had been right to be fearful about the onset of competition, which he regarded as analogous to the onset of smallpox and the Black Death, and also (for reasons I have never quite understood) dog-racing.

But the BBC soon discovered its own competitive instinct. It bounced back with programmes such as Steptoe and Son, Z Cars and The Forsyte Saga, programmes which chimed with the mood and tastes of the British audience. Today competition is already all around us. We are at home with it. It spurs our creativity and thus benefits our licence-payers. Over the past few years, the BBC has shown it can do more than survive; it can prosper in an increasingly competitive market place. In those years, for example, the growing take-up of cable and satellite television neither prevented BBC1 from increasing its audience share (while ITV's was failing), nor stopped BBC2 from moving ahead of Channel 4. These were years, too, when we won record numbers of awards at home and abroad.

From time to time people have questioned the need for the BBC to retain or develop radio services. BBC Radio continues to record an audience share of nearly 50 per cent, despite a channel explosion in 10 years from 45 to 185 independent competitors. And the introduction of Radio 5 Live has proved a resounding success.

Last year, overall, the BBC accounted for around 45 per cent of all viewing and listening and our weekly audience reach remained constant at 95 per cent. These are figures for all households. Independent readers will have been bemused by vastly different figures deployed last week by David Elstein. His were based solely on the inevitably lower share in cable and satellite homes (currently one in four homes in the UK). But even there, the terrestrial broadcasters (BBC, ITV, C4 and Elstein's own C%) command a respectable 62 per cent of the viewing. The robustness of the BBC's reach and share are due to the talent of the BBC's stars, programme makers, schedulers and controllers, together the crack regiment of British broadcasting.

The figures demonstrate the value of the licence fee which - despite being one of the lowest in Europe - provides by far the widest range of programmes on both television and radio. The licence fee is an incredibly efficient engine for creating valued programming from income received.

For just 30 per cent of the total TV income in the UK, the BBC commands around 40 per cent of the audience - and the hourly cost of BBC services to the user is about a quarter of the figure for a satellite multi-choice subscriber. Whichever way you look at it, this is good value.

The BBC and its programmes are rarely absent from national debate - front page, front room, pub, club, office or Internet. This autumn the crack has been about Teletubbies, The Nazis, Hotel, Holding On and This Life, among others. I was asked by an American interviewer last week why the BBC is controversial. I said that it was because what it does, matters. It would be disappointing if it weren't controversial. We make programmes that engage, stimulate, get people involved. Outside of sport, it's hard to think of any on cable or satellite that do so to the same extent. We are paid by and are accountable to the public; we expect and welcome assessment of what we do. At the same time we, like the public, need to divide the noisy views of some of our detractors by the scale of their own self-interest.

Our commercial rivals call for a more market-based system, presumably to help drive up the price that people pay for television. This would, of course, hit the poorest groups in Britain, the very people to whom, according to some critics, the licence-fee system is unfair.

The licence fee is an oddity in many ways; it has been held up to the light, shaken and scrutinised almost as often as ITV has commercial breaks. But each time the scrutineers - occasionally to their own great disappointment - have judged it the best way of providing an independent public-service broadcaster, and good value for money.

Right now, we are determined that we will extend the principles, values and successful practice of public-service broadcasting into the digital age, delivering new and appropriate services for our audiences. The BBC has always been a pioneer. We have played a key role with other broadcasters in getting digital broadcasting to the starting-line, and next year we will launch our suite of offerings - enhanced and new services - to enrich our public service portfolio and adding still more value to the licence fee.

Because of the way it is funded, there is much that the BBC can provide which many of its subscription or commercial rivals will be increasingly unable or unwilling to offer. Thanks to the licence fee, the BBC will maintain its role as the country's most important patron of the arts. It can continue as Europe's largest provider of programmes, giving voice to and developing cultures of the UK and providing the forum - as with the Prime Minister's BBC-1 interview on Sunday - where the nation hears questions, discusses it can take risks; some may fall, but many more pay off. And, as broadcasting is increasingly challenged by narrowcasting, the BBC can and should continue to make great programmes and events available - including, I believe, national sporting events on a universal free- to-air basis.

Some things should never change, After 75 years, and all the technical developments, the essential element remains the programmes. Whether Bach is your bag or Never Mind the Buzzcocks, Fidelio or The Fast Show, Desert Island Discs or Driving School, it is the range and quality of the output that has meant continued widespread support for our kind of broadcasting.

The mixed economy of UK broadcasting has created a success story that really is the envy of the world. Yes, the BBC, but also the programme heritage of Granada, the inventive swagger of BSkyB, the quirkiness of Channel 4. It's disappointing, then, that more of our competitive colleagues do not feel able to share in the excitement of carrying forward our industry's flourishing international reputation without the need for such crude sabre slashes at its roots - the BBC.

The roots, however, are strong and deep, and full of sustaining growth.

The writer is chief executive of BBC Broadcast.