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The UK government announced on Monday it would freeze funding for the BBC for the next two years.
Under the agreement the license fee - a tax on all television-owning households - will be frozen at $217 a year until 2024.
A debate will also be held on whether a universal charge with criminal penalties for evasion was still appropriate when the public can subscribe to many platforms, like Netflix and Amazon Prime.
Culture Secretary Nadine Dorries told parliament the move was designed to help households squeezed by rising taxes and energy bills.
"The BBC wanted the fee to rise to over 180 pounds by the end of this settlement. Instead, it will remain fixed at 159 pounds until April of 2024. That's more money in the pockets of pensioners, in the pockets of families who are struggling to make ends meet.''
The move has drawn scorn from the opposition who accuse the Conservatives of 'cultural vandalism'.
The BBC is one of the biggest institutions in British public life, offering high-quality news output, drama and documentaries.
In recent years it has struggled to navigate the heightened political and cultural disputes gripping Britain with its critics accusing it of being too London-centric on issues such as Brexit.
The BBC's director general, Tim Davie, and Chairman Richard Sharp, said the freeze would mean tough choices ahead.