Andrew Allison is head of campaigns at The Freedom Association.

After months of waiting, we now know what the Government’s plans are for the BBC. Despite the rhetoric, this is a deal that the Corporation will feel is better than it could have expected.

The Beeb still keeps its hypothecated television tax, and it will be increased in line with inflation for the next five years. Its Royal Charter will run for eleven years, which means nothing significant is going to change in the way the BBC is funded during that period, and those who use iPlayer just for catch-up services will have to pay a licence fee to do it.

Nick Watt, Newsnight’s new political editor, said yesterday that he thought Cameron and Osborne have reined in the Culture Department.

That may be true, but although the risk averse management at the BBC may be popping champagne corks, the deal is really not in the best interests of the media market in the UK and the Corporation itself.

The BBC’s reach in the UK is enormous. It can throw money at a multitude of projects, often at the expense of smaller enterprises, and it never has to worry about where its next pound is coming from.

The BBC already is responsible for 75 per cent of news content in the UK, and it’s news website has already been a major contributing factor in the demise of many local newspapers.

Despite this, the deal announced yesterday allows the BBC to significantly increase its income in the short term. With inflation at virtually zero, the BBC is not going to raise much extra income from annual rises in the licence fee, but it is likely to get a boost from making everyone buy a licence if they want to access iPlayer.

More money for the BBC through a television tax, means it can extend its tentacles and further distort the market. We know this is what the BBC does. It thinks it should have its fingers in every pie, much to the chagrin of other players in the industry.

As for an eleven year charter, this is completely bonkers. The Government admits that the media landscape today is nothing like it was ten or eleven years ago. Technology is advancing at an alarmingly fast rate.

When my four year-old niece asks if she can watch the television, she isn’t waiting for a programme to start at a certain time. To her television is Netflix and other streaming services. It could be age appropriate YouTube videos. She does not and will not in her lifetime distinguish between different formats.

Because her parents have a Smart TV, all she knows is she watches all sorts of different programmes on the telly in the corner of the room. As she gets older, she will start watching them on a tablet, computer, a mobile phone, and different devices that haven’t been invented yet.

Many students don’t bother buying a television because they simply don’t need one. They watch everything they want to watch connected to the Internet using portable devices. In a fast changing multi-platform, multi-media market, any broadcaster has to be nimble or it will lose its market share. This is ultimately what is going to happen to the BBC.

Although the BBC in dominant in the UK, it is losing ground in the world media market. It could have a number of different income streams, aggressively marketing its back catalogue, as well as new content. It doesn’t do this because it doesn’t have to.

By the time we reach 2027, the BBC will have lost out on a massive worldwide income. It has chosen what it thinks is the safe option, but in reality what it has done is start the process of hammering nails into its own coffin.

The future for the BBC could be rosy, but instead it is bleak. It needs to be liberated so it can respond to technological advances. The very nature of broadcasting has changed irrevocably, but the BBC and the Government put their collective heads in the sand as if the corporation can somehow buck the trend. It can’t.

As a private company, funded mainly through voluntary subscription, the BBC could freely change and adapt as the market changes and adapts. That opportunity has been squandered.

By 2027 the licence fee will be completely irrelevant, and the very survival of the BBC as we know will be in doubt, all because risk averse management (aided and abetted by the current Government) drove the BBC into a dead end.