British culture secretary Tessa Jowell said March 2 that the BBC's license-fee funding mechanism would be retained through 2017, but the pubcaster's board of governors would cease to exist in its curr

LONDON (The Hollywood Reporter) -- British culture secretary Tessa Jowell said March 2 that the BBC's license-fee funding mechanism would be retained through 2017, but the pubcaster's board of governors would cease to exist in its current form.

Announcing the 118-page green paper on the review of the BBC's Royal Charter in a long-awaited statement to the House of Commons, Jowell said the future of the BBC should be such that its political independence and editorial freedom were guaranteed.

The settlement is a major victory for the pubcaster, which had faced the possibility of having to share its license-fee income with other public-service broadcasters as well as the threat of being brought under external competition and program standards regulation.

BBC chairman Michael Grade and director general Mark Thompson welcomed the green paper's conclusions.

Jowell told Parliament that the BBC's current governance system was "unsustainable" and should be replaced by two new bodies: the BBC Trust, which would exist to represent the interests of the license-fee payer and be headed by Grade, and an executive committee, headed by Thompson, that would report to the Trust.

The new BBC Trust will be the custodian of the BBC's purposes, the license fee and the public interest, and the executive board will be accountable to the Trust for the delivery of the BBC's services. The functions of the two bodies will be clearly defined, enabling the Trust to judge the management's performance "clearly and authoritatively."

The Trust will have powers of approval over BBC budgets and strategy and will hold program makers and executives to account through its regulation of new program service licenses that each channel must uphold.

Jowell said that a campaign of internal reform of the current governance structure headed by Grade "were in the right direction" but "did not go far enough."

BBC representatives were visibly relieved that the proposals presented the BBC with such a favorable settlement. At a press conference following the parliamentary statement, Grade said the government proposals were an improvement on the structure for which he had been campaigning.

Thompson said that the guarantee of the BBC's license fee funding mechanism would provide a strong basis for the pubcaster to continue its provision of public-service broadcasting, and that the BBC shortly would embark on a companywide creative review of its output.

The paper also called on the BBC to implement a feature film investment strategy. Film Council chief executive John Woodward, who had lobbied for the BBC to take a greater role in producing British films, praised its conclusions.

"This is a real step forward. The green paper underlines for the first time the importance of the BBC having a proper film investment strategy to champion British films. The culture ministry is now joining up broadcasting and film policy in a way that's never been done before," Woodward said in a statement.

The green paper also warned that the BBC should stay out of bidding wars for expensive U.S. films and series, acquiring product only when it served a clear public-service purpose.

Just two days after the announcement, however, the BBC found itself defending on March 4 a decision to bid a reported $3 million for the six-hour Sci Fi Channel miniseries "The Triangle."

The BBC said the decision to bid for the science fiction series had been taken because it is a program viewers would watch.

But sources at rival broadcasters said that if the $3 million price tag was correct, the BBC would be overpaying for the miniseries.

"$500k an hour is expensive -- it's way over what you'd pay for series prices -- not including 'The Simpsons' or 'Joey,' " one leading buyer said. "Average prices are at least half of that or even less."