The Media Column: The BBC must admit that it has done wrong on a huge scale

There were people in London in the 1930s who believed that John Reith, the director general of the BBC, was a megalomaniacal lunatic. The postmaster general did. Ramsay MacDonald and Stanley Baldwin had their suspicions. But, as the cabinet papers on the abdication of Edward VIII have revealed, Reith proved entirely trustworthy when constitutional crisis came. The King wanted to do an unauthorised radio broadcast to the nation. Backed by his friend Winston Churchill, he was all set to stake his empire on a direct appeal to the people over the heads of ministers. As we now know, Baldwin vetoed that. When cabinet colleagues fretted that the king would go straight to Broadcasting House, the Prime Minister was confident. Reith was on side. He would not permit it.

Would Greg Dyke have respected constitutional principle? There are people throughout Britain in the Noughties who doubt it. Consider the ratings opportunity: a monarch speaking exclusively to the BBC about sex and power would leave commercial stations viewer-free. Plugged relentlessly and presented by Jeremy Vine, it would screw the competition completely. Add repeats on News 24, and analysis on BBC4, and BBC Digital would outperform Sky Sports. Dyke would be more likely to ask if King Charles could speak at the same time as Arsenal vs Man United, and whether he would bring Camilla, too.

Too cynical? In the first month of 2003, Barry Cox called the BBC a "cultural tyranny" and suggested that it should be funded by subscription. The Labour MP Derek Wyatt declared the corporation to be "in terminal decline" and suggested that it should be split up. Jonathan Dimbleby questioned whether the licence fee is still justified. So did Jeremy Isaacs. A New Statesman front page demanded that the Government "Kill the Licence Fee", and had a columnist describe it as a "poll tax that picks the pockets of the poor to fund the pleasures of the better-off". That is the view of the Opposition, too.

And, to make it all official, the Culture Secretary, Tessa Jowell, ordered the most comprehensive review of the BBC's remit since the Peacock report of 1986. She made it plain that the BBC's funding mechanism will be "tested to destruction".

Granted, 1986 is not so long ago. To a casual observer, we have been here before and under less ruthlessly competitive leadership than Dyke's. But that is wrong. What was once the ideological perspective of the Thatcherite right has become the consensus. This is worse than the relationship between Harold Wilson and BBC News. It makes Tory fury over even-handed coverage of the Suez crisis look trivial. Dyke's BBC is under assault from sectors of opinion that have traditionally defended it.

Of course, self-interest is involved. Commercial broadcasters resent the BBC's expansion into digital. ITV reviles the populist scheduling that has cut its share. But even in Broadcasting House, there is awareness that the BBC is losing the argument. Gavyn Davies worries about dumbing-down. Executives understand that renewal of the charter in 2006 is less certain than ever.

This is a critical time in the history of the BBC. To survive as a global standard-setter, it's going to have to do something that has been anathema since Reith's day: to admit it has done wrong on an unprecedented scale. Dyke will deny it, but, from right to left, it is now accepted truth that his BBC has expanded into market sectors in which it has no business. Worse, that this commercialism has been exercised at the expense of licence-payers, many of whom don't want the new services for which they pay, and to the detriment of mainstream quality. It doesn't look good for the BBC to announce redundancies in news and current affairs as war looms.

The case for a licence fee remains strong. Neither ITV nor Rupert Murdoch really wants the BBC touting for revenue in an already depressed, fragmented market. But they, with politicians and licence-payers, have decided that they do not want a BBC that seeks to dominate the airwaves, instead of strengthening them with a core of excellence. Dyke has made it plain that he intends to serve a second term. But in Parliament and among the public, the view is growing that the director general's strategy is a barrier to renewal of the licence fee. Like Edward VIII, he may need to be persuaded that the survival of an institution he claims to love is incompatible with his own ambitions.

timlckhrst@aol.com