Most countries have state broadcasting networks of one sort or another, many of them (the best ones) modelled on the BBC. We would be crazy to scrap the Beeb, for the good reasons given by Howard. It's a National Treasure.
But I can see Duke's point about the licence fee, and I understand his reference to the poll tax: it's a very blunt instrument,with its flat rate charge for everyone. The over-75s are exempted, which puzzles me, as many of them could well afford to pay. Perhaps we should devise simple ways of exempting or reducing the cost for those who can't afford the full licence fee, maybe by linking it to the tax and benefit system.
Switching to a subscription service like Sky Sports is definitely a bad idea - it would decimate the BBCs income. A better plan, IMO, would be to finance the Beeb at least partly through advertising.
I'm not saying the BBC is rubbish, some of the content is very good indeed (as is ITV, Ch4, 5 Sky & Television X).
It's competing on a world stage with one hand behind it's back and now is the time to set it free as very soon it'll be worthless. As we start to watch telly in different ways, financing TV needs to be different. I bought a TV licence for the first time in 6 years as I got a sky subscription and TV but for yonks i didn't need it and TBPH, if it were just me, I'd have a large screen and watch through catchup (avoiding the licence fee).
In time, it will be an uncollectable tax and far better to look at other options. I know many say it will be worse if privatised but private companies do not throw away the image that the BBC has gained. When VW bought Rolls Royce, they did not start to build cheap hatchbacks, the USP is the quality and a private enterprise would maximise that.