The BBC administrates this system along with the other major broadcasters (ITV, C4, ...).
If the BBC did not put out its own output under Freeview, not only would Freeview collapse but the BBC would effectively be wiped off the face of British television.
Key distribution is already a solved problem as well, the UK has a large userbase of smartcard-based prepayment systems such as for electric/gas meters or transport cards (Oyster card) and every tobacco/liquor store has a terminal that can sell or reload these cards. Expanding this system to reload TV cards is just a software update.
London has good broadband in parts. In the central postcode of a major city in 2019, I could only get 40Mbit broadband, pathetically low compared to the multiple 1-2Gbit options I have in the US for the same price or lower.
Their focus on the easy money of a license fee, along with lines of “everyone loves to pay it” was going to land them in trouble sooner or later
If they'd have go subscription then, they could have chosen their own destiny
But on a technical level it should be possible with DAB which actually has some adoption in the UK unlike most other countries.
I believe there was once a separate BBC radio license, but they gave up on that long ago. So now BBC radio is financed from the TV licence fee, but there's no requirement to have a TV licence to listen to radio.
Very unlikely at present. Tangential fun fact: the ongoing broadcast of BBC Radio 4 on longwave is (one of?) the means by which British nuclear deterrence submarines ensure Britain hasn't been destroyed.
https://www.manchestereveningnews.co.uk/news/greater-manches...
There's an argument that the same shift should happen to be an internet license, but the idea has never got off the ground.