THAT IS THE QUESTION : ADS: TO BE OR NOT TO BE ON THE BBC?

The British Broadcasting Corp., which prides itself on presenting some of the world’s finest radio and television programming, is fighting what it sees as a sinister encroachment--commercial advertising.

Since the BBC went on the air Nov. 14, 1922, it has won national and international acclaim for a vast array of dramatic, cultural, comedy and public-service programs that have never had to answer to sponsors or competitive ratings.

But the corporation’s spiraling budget, which reached $844 million this year, has brought an outcry from several members of Parliament who say the British public shouldn’t be forced to pay the entire bill--as it has always done.

Their cause, backed by the advertising industry, won support last month from Prime Minister Margaret Thatcher who indicated that she favored advertising on a limited number of BBC television and radio programs.

Though Mrs. Thatcher said advertising was a “longer term” option to be considered sometime in the future, the BBC didn’t waste any time in denouncing the possibility of any kind of commercialism.

“If we were to give in to the argument for advertising, then we would start down the slippery slope to destroying the finest broadcasting system in the world,” warned BBC Chairman Stuart Young.

Young’s sharp denunciation was in keeping with the BBC’s vigorous defense of its independence from the government, which maintains some control over its finances.

In one memorable exchange during the 1982 Falklands War, Mrs. Thatcher said the BBC wasn’t stressing Britain’s side of the conflict strongly enough. “The BBC needs no lessons in patriotism,” retorted Richard Francis, managing director of BBC Radio.

Like broadcasting organizations in many European countries, the BBC is funded almost entirely by the British public through license fees--first on radios, now on either black-and-white or color televisions.

The license fee to receive the first radio broadcasts was fixed by the government at $2.40. The current debate over advertising was set off by the BBC’s request to the government to raise the annual color TV license fee from $54 to $76, a 41% hike.

BBC Director-General Alasdair Mine said that even at $76, it would still be “the best bargain in Britain.”

But Conservative lawmaker Robert Jones told the House of Commons it was a “whopping increase” for pensioners and others on fixed income. He endorsed the introduction of advertising.

Opposition Labor Party lawmaker Joe Ashton said he will introduce a bill allowing the BBC to take advertising instead of raising the license fee.

Thatcher, reportedly annoyed at the size of the proposed increase, said Home Secretary Leon Brittan, in making a decision on the BBC application, would have to consider that the fee “was a compulsory levy on the television viewer whether they watched the BBC a great deal or not.”

The alternative, Independent Television (ITV), is financed entirely by advertising and has consistently topped the BBC in ratings in the last year. Everybody with a television set has to buy a license, even if they only watch ITV.

Young warned that if the BBC and ITV had to compete for the same source of revenue, the high programming standards in British television would plummet.

Paul Fox, managing director of Yorkshire Television, one of the production companies for ITV, agreed, saying: “If there’s advertising on the BBC, then ratings will be the only thing that matters.”

But the advertising agency D’Arcy, MacManus & Masius, commissioned by Marketing Week magazine to devise a workable plan for the BBC to take advertising, insisted there’s no need for a ratings war.

“If the BBC took advertising tomorrow at six minutes per hour of broadcasting as ITV does, then the ITV (production) companies would go bankrupt tomorrow,” said Rodney Harris, D’Arcy’s media director. “Quite simply, there is not advertising money to fund both ITV and the BBC.”

But Harris said there is a way to allow a limited amount of advertising on the BBC without damaging ITV--by transferring the increase in demand for advertising on ITV, which has averaged 6% annually, to the BBC.

In practical terms, Harris said, this would give the BBC 15 seconds of advertising per hour in 1985, doubling each year thereafter. This would enable the BBC to maintain the current $54 license fee, he said.

However, Young insisted that the BBC would have to take 90 seconds of advertising an hour to make the money needed. “That would mean a glut of advertising space and would inevitably result in a ratings war. It would be a disaster for commercial television and the BBC.”

Two public opinion polls--one for the Sunday Times and the second for the advertising agency Saatchi & Saatchi--found that nearly 70% of those questioned favored the BBC taking some advertising to avoid a license increase.

Young said the BBC will continue to fight the advertising industry.

Harris said: “All we’re asking for is that the whole subject is properly discussed.”