London Briefing/ Chris Johns: A green paper on the funding of the BBC is due to be unveiled this week and the early leaks are suggesting few surprises: the licence fee is safe for now and the BBC can be assured of a steady source of income for the next decade.

Arguments about whether the licence fee should be abandoned have been raging, but the smart money is now betting that by the time the switch to digital TV and radio is complete by 2012, the notion of a publicly funded broadcasting system will have become an anachronism.

I have to confess that I can't really see the logic of this (government-sourced) argument. Apparently, the more channels there are, the more likely it is that the BBC will wither on the vine and the issue of its funding will rapidly become irrelevant as its viewing audience collapses under the onslaught of hundreds of channels of competition.

I suppose it all depends on what you mean by competition: if the current programming make-up of the average satellite-based TV station is a precursor for digital TV, all the BBC needs to worry about are recycled US comedy shows, domestically produced porn shows and endless re-runs of Australian soaps.

I would like to give the BBC some unsolicited advice: tell the government what it can do with its licence fee and get ready for privatisation. If the BBC were to float itself off I would be first in the queue to buy its shares.

One of the problems with the licence fee is that it is now coming with an increasing number of strings attached. Constraints on the nature of programming the BBC can offer restrict the corporation's ability to manage and grow its business.

Under the guise of bashing the corporation for not fulfilling its "public service" remit, enemies of the BBC can attack it from a multiplicity of angles. Consistency of argument is rarely attained by the BBC's detractors.

The broadcaster gets in the neck when it is watched by too many people (anything popular cannot be in the public interest, at least according to New Labour) and is attacked when audience ratings slip (what is the point of a channel that nobody watches?).

Recently, the BBC was on the receiving end of criticism for aspects of its website. It was forced to shut, for example, its version of the popular fantasy football game, following complaints from other game operators that the BBC game was "too successful".

This is a familiar refrain: competitors have been complaining for years that the corporation is "too commercial" and should be restricted to a tightly defined public service remit. A fairly typical remark was made last year by the chief executive of one of the UK's private TV companies: "The BBC has become too commercial and it can make economic judgments which preclude commercial broadcasters."

I interpreted this remark as simply saying that the BBC offers too much competition. Why is that such a bad thing, particularly for consumers of broadcasting services?

The argument relates to the licence fee. Somehow it is supposed to give the BBC an unfair advantage; the question is whether licence fee revenue is used to subsidise commercial activities, giving the corporation an unfair advantage over the private sector companies.

The BBC does have a distinct commercial arm, BBC Worldwide, which covers international programming distribution and sales of books and DVDs (among other things). The corporation has argued that it is the income from BBC Worldwide that subsidises the activities of the public service broadcasting arm; in other words, profits supplement the licence fee, not the other way around. I guess it depends on which way you look at it: which arm subsidises the other will never be an easy one to prove.

The arguments for the BBC keeping its licence fee rest on the notion that without this income, the public broadcaster will rapidly become indistinguishable from Sky. But such concerns miss a much bigger and bolder picture.

By contrast, I think that privatisation could be liberating. If competitors cry foul at the BBC's activities, while at the same time the corporation has to kowtow to the authorities at every step, imagine what it could do if all constraints were lifted. Just imagine: quality TV at a competitive price.

I reckon the Beeb could make a fortune by simply scaling up all the activities that are so upsetting the competition.

• Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.