Fast-forward five years. Broadcasters and the independent sector are working hand in hand and have positioned the UK as a world leader in the development and production of innovative interactive content. A meritocracy operates for commissioning, such that independent interactive commissioning levels are on a par with television commissioning.

All broadcasters have taken a leaf out of the Codes of Practice handbook for television and have drawn up fairer terms of trade, covering issues like rights retention for independents. The sector has been able to retain and grow its own intellectual property.

Software developed by the BBC for operation on its platforms is available to all suppliers as open source, allowing access to the programme codes, and enabling external suppliers to bid to develop content applications for the BBC's platforms. A transparent and constantly evolving supply process allows new producers access to commissioning routes and gives producers the opportunity to plan around commissioning schedules.

Back to 2004 ... and back to reality. We are quite some way away from this Utopian scenario, although in theory it should be easily achievable.

The independent production community has made a powerful contribution to interactive programme formats, cross platform television projects and stand-alone interactive media. The likes of Fame Academy, Pop Idol and Big Brother all had interactivity at their heart. Yet unfortunately, the sector is a long, long way from becoming a sustainable part of the UK creative economy.

To support our submission to the BBC Online and Charter reviews, Pact commissioned a study of the state of the broadcaster-related interactive media industry. The findings made for sobering reading.

Of course, there is little independent interactive media rights retention, no open source coding and no easy and transparent access to commissioning routes but another key fact was revealed as well: namely the astonishingly low levels of commissioning of interactive content from external sources - particularly in terms of value. While Channel Five, ITV, Channel 4 and 4 Learning spend approximately 72%, 58%, 64% and 81% of their interactive media budgets on external commissions, the actual interactive spend is relatively small.

At least the intention to engage with the independent sector is there - at the BBC it's a different, and more depressing story. An analysis of available data estimates that less than 3% (approximately £2.3m) of its sizeable interactive media spend goes to external producers. Quite clearly this is not a positive place for the independent interactive media sector to find itself in and it is a situation Pact has addressed by proposing a number of key principles to the Graf report. We suggested:

Significantly increasing access to BBC online commissioning for independent producers with measurable, enforceable targets for commissioning.

Implementing measures to ensure BBC Online acts to build overall sector competence, eg information provision, and open technology and code sharing.

Ensuring transparency of process and negotiation for BBC Online commissioning, with attention paid to models for IPR retention and fair negotiations.

The issue at stake is not about helping a beleaguered independent new media industry. While those independent interactive media companies that have weathered the storm of recent "new media" change are not wholly reliant on work from the broadcaster sector to grow, additional income would help them expand their business and their creative skills. And while it might appear so to the inhabitants of White City/Bush House, it's also not about putting the BBC under siege.

Pact is simply putting forward a case that fair access to the market would increase the range and diversity available to BBC Online. It would bring high quality, innovative suppliers to the BBC, thus improving the quality of their offering to the licence payer, which is surely the ultimate aim. And with Ofcom's PSB review showing a viewing public highly dissatisfied with the lack of innovation and original ideas in broadcasting today, this can only prove timely.

Pact supports the BBC's role in providing a well-funded, high quality, innovative presence on the internet and does not question the existence of services on BBC Online. Our issues are around the quality, innovation and appropriate use of the public money with which the BBC funds its activities.

To move forward, Philip Graf has to insist the BBC enter into a productive dialogue with the independent production sector. Faint- hearted measures do not work, achieve nothing and could leave the independent sector kissing goodbye to Utopia.

· John McVay is chief executive of Pact