Ban stays on BT dial-a-movie plan

THE Government has rejected calls by BT and Mercury for a change in telecommunications policy to allow BT to provide entertainment over telephone wires.

Patrick McLoughlin, technology minister, said that any change in policy would have a devastating effect on investment in cable television in the UK.

In the most definitive statement so far on the ban on BT, Mr McLoughlin said that the restriction had resulted in massive inward investment in Britain's cable industry and in more choice for consumers.

He told the House of Commons Select Committee on Trade and Industry: 'There is no reason why the success of those policies should persuade the Government to change them.'

He rejected allegations that the policy discriminated against BT because the company was free to apply for cable television franchises if it wished.

BT has warned that it cannot spend billions of pounds on the fibre-optic cabling of Britain unless it is allowed to provide entertainment services.

But the minister said that Britain's future communications system would be built incrementally and would be based on the commercial judgement of a number of operators. The cost of installing a national fibre-optic grid could be between pounds 10bn- pounds 20bn and had to be commercially justified.

At present the ban on BT providing entertainment through the telephone network will not be lifted until 2001 at the earliest. But Oftel, the regulator, may review the conveyance ban in 1997. Don Cruickshank, director-general of the telecommunications watchdog, has said that he sees no reason for the regulations to change.