Hard on the heels of the controversy about the BBC's plans to spend more than a billion pounds on digital services, over the next five years, comes consideration of the renewal of its licence fee formula (writes Will Huckleby).

It was last renewed by the Tory government, and expires in 2001. In the face of increasing opposition by its competitors, including Rupert Murdoch, the BBC is already preparing its claim for a new and favourable formula.

Since the introduction of the present fee, £91.50 a year (a third less for black and white reception), there has been no decrease in licence holders, and many in the corporation argue that an increase would be generally acceptable to the public.

A keenly-argued political question is the extent of the influence of Murdoch on Prime Minister Blair, after more than a year in which even Labour politicians have criticised their apparent close friendship.

A report by the Independent Television (ITV) Association, accusing the BBC of failing to meet its public service commitments, claimed that ITV companies were closer to meeting their PSC than the corporation.

The ITV Association would rather have the BBC paid for by its licence fee than by advertising: competition on that front would horrify the companies. They will, however, no doubt with the support of Murdoch's UK interests, continue to snipe at what is seen by most taxpayers as value for money.