Murdoch's justifiable attack on the BBC?

It's a topic that has come up here on this blog numerous times.

How can media compete in a free market when the BBC prevents that free market from happening?

There has been a lot of coverage already about James Murdoch's speech at the Edinburgh International Television Festival last night.

I don't agree with everything that he said but think that he was spot on with this section

"Most importantly, in this all-media marketplace, the expansion of state-sponsored journalism is a threat to the plurality and independence of news provision, which are so important for our democracy.
"Dumping free, state-sponsored news on the market makes it incredibly difficult for journalism to flourish on the internet. Yet it is essential for the future of independent digital journalism that a fair price can be charged for news to people who value it."