BBC `stifles competition' in quest for new enterprises

David Elstein, chief executive of Channel 5, yesterday accused the BBC of stifling competition as it entered the new media age.

Mr Elstein's broadside came as it emerged the BBC was to pump around pounds 10m of public money into its online services. Speaking at the Royal Television Society's biennial conference in Cambridge, Mr Elstein said: "You're going to have to rethink what the BBC is there for. Is it a commercial enterprise or a public broadcaster?"

He said the BBC's 24-hour news service, which is funded by licence payers' money and launches later this year, threatened to put other news operators out of business. "There are three 24-hour news services - CNBC, CNN and Sky News," he said. "The BBC's will be the fourth, funded with pounds 30m a year - which is more than any of the others have."

Mr Elstein said the BBC should be regulated more effectively and but none of the competition authorities had the power to crack down on it.

However, David Docherty, deputy director of television at BBC Broadcast, dismissed Mr Elstein's concerns, saying it was impossible to separate the commercial projects from the public service. "It is much more complicated than that. By virtue of creating TV and radio programmes, you create commercial assets."

Answering Mr Elstein's claims that the BBC was insufficiently regulated, Mr Docherty said the corporation was "subject to close scrutiny by the Government".

The BBC's head of online services, Edward Briffa, was asked what justification he had for using licence payers' money to move into media such as the Internet. He replied: "The same justification we had in 1945 when we moved into television."

Mr Briffa is overseeing the creation of online versions of several well- known BBC programmes. Crimewatch will soon make an appearance on the Internet where users will be able to access a database of major unsolved crimes in Britain. An EastEnders chat forum is also to be launched imminently.

The BBC's 24-hour news venture ran into controversy last month when several cable operators indicated they would drop Sky News in favour of the corporation's services.