London Briefing Chris JohnsThe Hutton process is best understood in terms of a British establishment at war with itself. The first World War has sometimes been described as a row between Europe's royal families, albeit one with disastrous consequences for the masses. Hutton should be seen in those terms: a row between in-bred elites that has bloody implications for the rest of us.
It should be remembered that the ex-chairman and ex-director-general of the BBC were both derided as "Tony's cronies" - which they were. The ultimate irony is that, in the past, it has always been the Tories who complained about BBC bias. Margaret Thatcher had several unsuccessful attempts at neutering the corporation.
Given how upset this government gets when people are rude about it, I should not say that Gavyn Davies was put in as chairman of the BBC because his wife works for Gordon Brown or because he has £150 million in the bank. He is a reasonably heavyweight economist who, it was thought, would steer the BBC through the minefield of its charter renewal - a big deal that sees all aspects of the BBC's operations up for grabs.
In particular, as an economist, it was hoped that he could fend off those free-market types who demand an end to the licence fee. A strong body of opinion in the UK would leave the BBC to market forces.
Ms Tessa Jowell, the culture minister, has avowed that the chances of any serious change to the current system of funding the BBC lie somewhere between "unlikely and improbable". According to polls, the majority of British people no longer believe a word this government says. If they are right, we must expect the licence fee to come under attack.
The case for public service broadcasting is not clear cut. The debate is similar to the one about funding of the arts: why should the taxpayer subsidise opera? In terms of narrow economics, there are few reasons for doing so.
But it can be the best possible use of the money. We have to imagine a world where the BBC never existed: one where commercial TV has plumbed even lower depths, Basil Fawlty never ran his hotel and nobody got grilled by Paxman.
Economists can point to a certain type of market failure: programmes the public want to see, and are happy to pay for, that would not get made in the imperfect world of commercial television. In Britain, the BBC provides much needed competition to a business dominated by a few large corporations.
Turn the BBC over to pure commercial interests and we could end up with US-style TV. With honourable exceptions, the output of American commercial television is unwatchable. But I suspect that the US model may actually present a flattering image of what British television might become without the BBC. No other country can match us for the range and depth of our tabloid press. I would guess that TV is no different. Imagine schedules full of Kirsty's Home Videos (uncut).
Greg Dyke's genius was to go head-to-head in a ratings war with commercial channels and to continue the BBC tradition of quality programming. The paradox of public service broadcasting is that its remit is to produce something that everybody pays for but only a minority will watch. Mr Dyke realised the BBC would be sunk if it won awards but few viewers.
Other broadcasters are urging the government to renew the BBC charter in a narrow way, to keep the focus on quality rather than ratings. The Murdoch press came out all guns blazing over the weekend, with an explicit call to the government to shut down the BBC's digital channels and superb website; all in the interests of restricting the corporation to the fundamental ethos of public-sector broadcasting. Disguised as a high-minded call for culture, Murdoch is simply trying to destroy a very effective competitor. Murdoch's best friend, Tony Blair, understands this game only too well.
A restricted mandate will spell a long lingering death for the corporation and will remove a lot of uncomfortable competition for the Murdoch empire. This could be a very attractive option for a very vindictive government.
