With his outspoken criticism of BBC governors and management, Channel

4's Michael Grade has rekindled the debate about the corporation. Ian

Bell examines the issues.

AFEW years back, Michael Grade told the Herald in an interview that

the BBC had one main virtue: ''It keeps the rest of us honest.'' It was

not absolutely clear what he meant then. Last week, having developed an

affection for the remark, he repeated it at the Edinburgh Television

Festival and its meaning became much clearer.

It meant something like this: the BBC is the benchmark by which

British television is measured. By example, it clarifies the ideas of

quality and public service. Others can use the words without meaning

what they say: the BBC proves them right or wrong.

But then, Grade would say that, wouldn't he? As the man in charge of

Channel 4 he runs a public service station -- obliged to cater for

minorities and ''regional variety'' -- within the commercial sector.

This did not seem anomalous when C4 was funded by subscriptions

extracted from the ITV companies. Now it faces raising its own revenue

in competition with its former paymaster, with all the pressure for

ratings that implies. Grade needs the BBC, if only as a totem.

Yet the C4 chief executive is no disinterested observer. In his James

MacTaggart memorial lecture last week, he accused the BBC's governors

and senior management of every shade of political behaviour, from craven

appeasement to editorial dictatorship to ''pseudo-Leninist'' management

and the infliction of corporate ''brain death''.

Grade worried that the BBC was being run as a business rather than as

a centre of ''broadcasting excellence'' and suggested that it was

heading for ''terminal decline''. He also called for the abolition of

the corporation's board of governors and the creation of a single body

to oversee all channels, commercial or otherwise.

These were not shots in the dark. Earlier last week David

Attenborough, a figure revered by many within the BBC and adored by the

public, told the British Association that the corporation was being

eroded, staff morale damaged, and ''the very things that gave it its

unique structure destroyed''. As both a former BBC executive and a

broadcaster who has shown that serious television can be hugely popular,

Attenborough spoke for many.

The public, paying the licence fee but not invited to the TV festival,

is entitled to wonder what this is all about. No sooner had Grade spoken

than stories were being prepared to the effect that ''heads will roll''

at the BBC when John Birt takes over from Michael Checkland as

director-general, either next March (as originally planned) or at

Christmas.

Bearing out previous speculation, the stories predicted the end of

Radios 2 and 5, changes at Radio 1, the creation of an all-news radio

channel (reflecting the success of Radio 4's rolling Gulf War coverage),

and the departure of several executives.

So what? What does BBC radio do, after all, that the commerical sector

does not do? Even Radio 3 is alleged to have gone down-market to meet

the challenge of Classical FM. Why should BBC1 schedule game shows and

soaps when independent television and BSkyB offer a plethora of them?

At the heart of the argument is a curious mixture of politics, public

finance, technology, and broadcasting philosophy. It can be summarised

in one question: ''Should the BBC strive to be excellent in general or

excellent in particulars?''

The politics are familiar. During the eighties Mrs Thatcher grew to

detest the way in which the BBC used its role as the voice of the nation

to defend its independence. A series of rows over programmes and a

campaign by the Murdoch press (co-owners of BSkyB) led the Government to

toy with solutions.

End the licence fee? Too useful for applying pressure. Insist the BBC

take advertising? There isn't enough to go around and Mr Murdoch

wouldn't like it. Apply a competitive free-for-all, keep the corporation

tight for cash, and watch it wither? That had possibilities.

After all, it would keep the BBC in thrall to the State (public

finance, ''efficiencies'' etc); expose it to the enormous competitive

burdens of new technology (satellite and cable); and it could be dressed

up as an argument over philosophy (why should the BBC do everything?). A

smaller, less ubiquitous BBC would cease, by stages, to be a national

institution with all the perceived arrogance and pride in its

independence that implied.

If this is a conspiracy theory it isn't a bad one. After all, the

BBC's governors and management have shown few signs of serious

resistance. While John Birt has been accused of deference to the

Government on numerous occasions the corporation has prepared for the

November Green Paper on the renewal of the BBC's charter by setting up

16 ''task forces'', few of which seem to have opted for expansion.

Hence the tales -- denied by the BBC -- of executive decapitations and

services to be cut. Some, like the stories of a reformed radio service,

bear examination; others are speculative. It is worth asking why the BBC

needs five radio stations to ''inform, educate and entertain''. Equally,

it is not unnatural that a new director-general should want his own

people on his board of management.

Nevertheless, it is clear that there is pressure within the upper

echelons of the BBC for fundamental changes. Birt is said to believe

that the corporation should move to the ''higher ground'', leaving

others to play at populism. Marmaduke Hussey, his chairman, has made

statements about the need to recognise Government demands for

cost-cutting.

Hussey has accused Grade of making wild accusations and of living in

the past. He has wondered aloud how Attenborough can claim the BBC is

neglecting quality programming while the C4 boss is accusing it of

deserting the popular market. He does not -- cannot -- grant that both

men might be right.

The BBC was created to be all things to all men. Hence its authority;

hence its reputation for quality. Granted, its programme costs are

higher than other stations but the corporation is not like other

stations: the obligation of public service weighs heavily.

To say that it should now restrict itself to making programmes no-one

else can or will make is to say that it should cease to be comprehensive

and cease, in effect, to be the BBC. Would it then be worth the licence

fee? Michael Grade has posed the question; the corporation has yet to

answer.