TV licence will go DOWN in 2013 after digital switchover, says Ofcom chairman

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The TV licence fee will be reduced in 2013 once the digital switchover has been completed, Ofcom said last night.

The BBC is currently using £800million of licence payers' money to cover the switch from analogue - taking place region by region - which will be complete by 2012.

By 2013, when the BBC is due to review the cost of the licence fee, the money will no longer be needed for that purpose, Lord Currie, head of the media watchdog, said.

He suggested that the licence fee intake, which currently totals £3.2billion, should be either lowered or the money shared with other channels.

The fee stands at £139.50 - or about £12 a month - for a colour TV set.

Lord Currie said from 2013 there would be a 'switchover surplus' and Government and Parliament have three choices at that stage: to reduce the licence fee, spend it on new BBC services, or apply it to another purpose, including the funding of public service content by other organisations'.

The corporation's ruling body said yesterday that the BBC's dominance could harm commercial broadcasters who try to compete against it.

A report commissioned by the BBC claimed it adds £6.5billion to the the British economy, twice as much as it raises from the licence fee.

But it recognised complaints that its powerful position is seen as a threat to rival broadcasters.

Among the concerns acknowledged by the BBC Trust, the body that oversees the broadcaster, is that its dominance is seen by many as a dangerous monopoly that allows it to distort the market in its favour and crush potential rivals.

The Trust commissioned a study from accountants PriceWaterhouseCoopers into the impact the corporation has on the economy.

Shadow culture spokesman Jeremy Hunt said: 'The key question is not about the impact the BBC has had on commercial competitors so far but whether the BBC's dominant role will crowd out innovation.'