Yet another example of the public sector being asked to get out of the way so the private sector can do a worse job. The BBC is restricting its downloads using DRM, in order to avoid competing too much with commercial broadcasters.

The most obvious problem is that almost all the BBC’s broadcast output has a “negative market impact” on commercial broadcasters. If this argument is followed to its logical conclusion, the BBC should simply shut down. The flaws in the economics of the BBC Trust’s argument are more fundamental.

The valid argument for moving the provision of a service to the private sector is that it will save consumers money. This will either be because competition will lead to more efficiency, or because the charges the private sector makes will be more than offset by reduced government expenditure.

Neither of these applies in this case. Consumers will have to pay for commercial alternatives to something the BBC could provide free.

There will be no reduction in expenditure anywere. The BBC will still record the same programs, they will just distribute them in a different format. In fact they will have slightly higher costs as the result of developing and licensing the necessary software.

For those who understand the jargon of economics, this approach reduces engineering efficiency, therefore it must fail to maximise economic efficiency.

Another argument that can be made for private sector services is better choice or quality. Given that there are legal, technical and economic restriction on the number of broadcast channels available, the choice argument is unconvincing at best. As for quality, I have seen very little that suggests that Britain’s commercial broadcasters can do a better job than the BBC.

So lets look at this from the point of view of society as a whole. The gain from restrictions is a possible increase in choice, the loss is a large an certain increase in cost, a reduction in competition, and restrictions on consumer use of material (in economic terms, another cost).

If you are in Britian you do have an opportunity to influence the BBC Trust.

The main issue in this case is why you should have restrictions on your use of something paid for by the license fee.

The DRM is pointless anyway because it is all broadcast without DRM in digital formats anyway.

The more fundamental problem is that the assumption that private sector provision of services is somehow automatically better is a widely accepted piece of ideology. It has been used to hold back free internet access services, privatise without ensuring a competitive market, increase the costs of research and restrict the distribution of information generated by governments – even if it makes the public (as consumers) pay again for something they funded as taxpayers.