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As part of his economic austerity plan, Finance Minister Benjamin Netanyahu announced yesterday that he plans to cancel the television license fee and to finance the Israel Broadcasting Authority partly through state subsidies and partly from advertising revenues.

The proposal to cancel the license fee, which presently stands at NIS 515 a year, faces several potential obstacles. One is a legal problem stemming from the fact that the two commercial television channels, each of which paid millions for their broadcast licenses, did so on the understanding that they would not have to compete with Channel One for advertisers. The reform would mean abolishing the IBA's fee collection service, which employs hundreds of workers.

IBA director-general Yosef Barel said that the BA would have to finance itself through advertising revenues and prove that it could achieve higher ratings to draw those ads. But implementation of the plan would necessitate some 1,000 layoffs and a cut in the number of radio stations.