An MP has called on the public to be given a much greater say over programmes made by the BBC and salaries paid to top performers and managers.
Conservative Robert Halfon said licence fee payers should be able to elect the chairman of the BBC and its board.
Launching a proposed bill, he said the BBC was a "great British institution" but had "fundamental flaws".
The BBC Trust said the BBC's governance was set out in legislation which required it to consult the public.
Mr Halfon's proposals are included in a ten-minute rule bill which, although it has the backing of a number of other Conservative MPs, are unlikely to become law.
The MP said the BBC had many "positive attributes" and was "an umbilical cord" to British society.
But he said that it controlled too great a share of the media market, deterred commercial competition in some areas and the licence fee had become a "medieval anachronism".
"If the BBC really does depend on the licence fee for its survival, there must be some real checks and balances. What better way than democratising the licence fee," he told MPs.
The public must be given real influence over the "strategic direction" of the corporation, he said, describing existing consultations over programming and other key issues as a "sham".
Under his proposals, licence fee payers would be able to elect the chairman of the BBC and his or her fellow board members via the internet and have "some say over programme making and payment of salaries".
Executive pay had been allowed to get out of control while the BBC's daily taxi bill totalled £50,000, he suggested.
Resources should be focused on supporting journalism, sports coverage and new programming, he says, rather than on "expensive and unwanted" projects such as the BBC's new studio complex in Greater Manchester.
"At the moment we are powerless as the BBC is currently run as a feudal monarchy," he said.
The governance of the BBC is set out in the BBC Charter which currently runs until 2017.
The BBC Trust - which oversees the BBC's strategic direction - said the corporation was required by existing laws to consult licence fee payers.
"This includes the process for appointing Trustees, and requirements for the Trust to represent the interests of licence fee payers, to consult them on their views, and to ensure high standards of openness and transparency," a BBC Trust spokesman said.
The BBC has moved to reduce costs following criticism by some MPs and commercial rivals, reducing the pay bill for senior staff by 25% and publishing more details of what it pays its top stars.
Nearly 50,000 people responded to a public consultation on the BBC's strategic direction conducted last year.
The next chairman of the BBC Trust, who will succeed Sir Michael Lyons, is due to be announced in the near future. Former Conservative chairman and Hong Kong Governor Lord Patten and former CBI boss Sir Richard Lambert as seen as the leading candidates.