The BBC was once a non-excludable service that served a unique function. It is not anymore. Once the BBC provided a service of essential public need. It was informing the population and providing a unique service of a public good. Now, with a host of other media outlets providing news coverage, the BBC’s public worth is severely diminished.
Additionally, the Royal Family is public-funded, but not through a mandatory Royal license fee. It comes from our tax revenues. Nothing would stop the BBC from being funded in the same way, removing the arbitrary and inefficient license fee.