The BBC, which has revenues of about $5.5 billion US per year, is finding that it's just not enough in these times of technological change. But its detractors are saying enough is too much.

An excerpt from the NYT story:

Jonathan Ross, a BBC talk show host with a vocabulary as colorful as his wardrobe, recently pushed things a shade further than usual. In language that would make an American television regulator blush, he asked David Cameron, leader of the Conservative Party, whether, as a teenager, he had fantasized sexually about Margaret Thatcher.

For critics of the BBC, the moment, which Mr. Cameron laughed off, provided a glorious opportunity to accuse the public broadcaster of losing its moorings. Mr. Ross, who is paid about $11 million, a year, became an example for claims that the BBC is arrogant, spendthrift and out of control, straying into areas of questionable taste as it tries to keep abreast of commercial broadcasters in a competitive media marketplace.

“Such puerile vulgarity is what passes for satire these days on the channel that once brought us ‘That Was the Week That Was’ on a shoestring budget,” The Scotsman, a newspaper, fumed in an editorial, referring to a 1960’s BBC show that poked fun at politicians of that era.

The BBC is under more than the usual degree of scrutiny because the license fee of $242 a year that every British television owner must pay to finance its operations is under review by the government. While the broadcaster’s royal charter has been renewed for another decade, the level of financing must still be determined.

A majority of Britons, in a recent survey commissioned by the BBC, said they supported the license fee. But the review process and the corporation’s plans for spending the money have opened the door to all sorts of critics from outside the BBC and some from within.

The BBC has asked the government to increase the license fee, which raises nearly $5.5 billion a year, by 2.3 percentage points more than the annual inflation rate over the next seven years. The BBC says the money is needed to pay for digital television and Internet services as it prepares for an uncertain future in which consumers will be able to choose from a proliferating array of media options.

Mark Thompson, director general of the BBC, is expected to announce on Wednesday a reorganization aimed at meeting this challenge.

“The BBC is going through huge change, moving from traditional linear broadcasting to the challenging and exciting world of interactive on-demand digital media,” Mr. Thompson said this month as the corporation published its annual report. “It means the BBC’s relationship with audiences is also constantly changing.”

Signs of change include declining audiences for the BBC’s flagship conventional television channels as viewers turn to digital alternatives or log on to the Internet.

Meanwhile, some of the BBC’s plans to move into new areas, particularly in its small but growing commercial activities, have upset some competitors in the private sector.

Some publishers, for instance, have complained about the BBC’s plans to start a weekly newsmagazine as part of its advertiser-supported print operations. And, while the BBC is prohibited from selling advertising on its television, radio and Internet services in Britain, overseas TV channels like BBC World have been raising money from commercials.

Now the BBC wants to add advertising to a new Web site for users outside Britain, who represent about a third of the traffic to the existing global Web site.

Although British Web users would continue to be routed to an ad-free site, some rivals say the proposal to sell online advertising would give the BBC an unfair advantage in the race to stake out new-media ground, given that the BBC’s online operations are, in effect, subsidized by license fees.