Whatever happened to the venerable British Broadcasting Corporation? The BBC used to be known the world over for bringing you the truth as told by gentlemen, but it has fallen, and fallen hard. The case of the BBC vs. the Blair government reminds us why the world has moved beyond state monopolies. They are inefficient, can be blinded by arrogance and often have an exaggerated sense of their own power. Nowhere is this truer than in the world of media, a profession that is crowded with big egos in any event.

Last week, the independent inquiry into the BBC's reporting that Prime Minister Tony Blair's government manipulated the truth about Iraq's weapons of mass in order to sway the British public found the allegations entirely unfounded, vindicating the government. Lord Hutton, the judge who presided over the inquiry, further found sloppy editorial practices and a resistance to accountability among the BBC's directors. The report also vindicated the government of having any part in the suicide of scientist David Kelly, who had been the source of the BBC's allegations. The report precipitated the resignation of BBC chairman Gavyn Davies, director-general Greg Dyke, and the reporter responsible for the debacle, Andrew Gilligan. You can say this about the British, at least, they know when to fall on their swords.

Prime Minister Tony Blair has enjoyed every minute of it, and may have received a boost that will carry him into a third election victory. Last week, he survived not just the Hutton report, but also a massive mutiny among left-wing members of the Labour Party, who were protesting his plans for raising university tuition. In a long statement, Mr. Blair went after the BBC and demanded a public apology, as well he might.

"The allegation that I or anyone else lied to this House or deliberately misled the country by falsifying evidence on WMD is itself a lie," Mr. Blair said. "And I simply ask that those who made it and those who have repeated it over all these months, now withdraw it, openly and fully."

For the BBC, the timing of the report and the investigation could not have come at a worse time. The corporation's 10-year charter is up for renewal in 2006, and the government is about to launch a debate on the subject of its funding mechanisms. The BBC is a non-governmental entity, with its own board, and funded through radio and television licenses fees paid by the British public. But in a world of independent media, it is surely time to revisit the role of state broadcasters like the BBC, and the Hutton report makes an excellent case why.

Based on an over-drinks interview with David Kelly -- from which his note keeping was careless -- reporter Andrew Gilligan last May claimed on the BBC Today show that Downing Street had "sexed up" the dossier on the information about Iraq's WMD. The following week, on June 1, he further wrote in a newspaper article that the responsible party was Alistair Campbell, head of government communications in Downing Street, and Mr. Blair's closest advisor. In response to the Blair government's denials and charges of bias on Mr. Gilligan's part, the BBC leadership refused to back down. They ignored the fact that other reporters had raised red flags and took to the offensive without as much as taking the time to review Mr. Gilligan's story.

The story was raised to a new level by Kelly's suicide in an Oxfordshire wood on July 17, in the midst of a parliamentary inquiry, in which he had been named as the source for Mr. Gilligan's story. The British government had been accused of treating Kelly in an underhanded way, which had somehow pushed him over the edge. No so, according to Lord Hutton. "I am satisfied that no one realized or should have realized that those pressures and strains might drive him to take his own life," he writes.

All of which should call into question the BBC's reporting during the Iraq War. It was unrelentingly hostile towards the allied forces, and became known here as the Baghdad Broadcasting Corporation. Of course, this was not an unknown phenomenon here in the United States, but in Britain, the BBC has a unique lock on the power to shape public opinion. A shake-up should be focused on getting the corporation back to basics - through competition and privatization. After all it is job of the media to report the news -- get it right and get it first" as this newspaper's editor-in-chief, Wesley Pruden, likes to say -- not to promote its own agendas.