ITN has launched a broadside against the BBC's licence fee demands and new media plans insisting that its "expansionist" strategy risks "swamping markets which are well-served by commercial operators".
In a carefully timed intervention in advance of tomorrow's Department for Culture, Media and Sport seminar on BBC licence fee renewal, ITN has called on the government to examine the corporation's proposed new media expansion and news expenditure.
ITN believes the BBC should be forced to reduce its investment in news over the term of the next licence fee settlement from April 2007.
"The BBC's new media strategy is once again too expansionist. It shows no sign of curbing its tendency to throw public money into developing new media platforms," ITN chief executive Mark Wood said.
"This risks swamping markets which are well-served by commercial operators. ITN is already providing these services without public funding. ITN's multimedia business is growing quickly and we are now the UK's leading supplier of news, entertainment and other video content to 3G mobile phones and broadband," he added.
"There is no evidence of any kind of commercial failure in this market and it is therefore very unclear as to why the BBC should need to allocate so much resource to it. We believe their online news strategy could be funded at a much lower cost."
In its current licence fee bid, the BBC is asking for additional funds of £1.6bn to deliver "quality content", £600,000 to deliver "local services", and £1.2bn for "digital infrastructure".
The BBC proposes to spend some of this extra funding on global journalism, on local news and on its online news and "active engagement".
Mr Wood, whose company provides news programming for ITV and Channel 4 and more than 260 commercial radio stations in the UK, added that the BBC's licence fee bid documents give no detail on what levels of news expenditure they envisage in the next licence fee period.
"We believe that the BBC has plenty of scope for even greater efficiencies in its news expenditure," he said.
"The BBC says it provides good value for money but ITN and other commercial news services provide outstanding programming at a fraction of the cost of the BBC's news provision. ITN has driven its costs down dramatically over the last decade by harnessing new technologies and pioneering new techniques in newsgathering."
Mr Wood concluded that ITN's eight gongs at the Royal Television Society 2005 Awards for television journalism showed that "good cost management need not affect quality".
ITN has joined forces with mobile operators Vodafone, 02, and 3 and BT, Yahoo! and MSN in a bid to develop its stake in the growing new media marketplace.
The BBC declined to comment.
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