Bell rejects BSkyB restrictions

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The Independent Online

Bell Cablemedia, the third-largest UK cable company, is prepared to sign a long-term contract to broadcast programming from the cable and satellite broadcaster BSkyB, its chief executive, Alan Bates, said yesterday.

But the company would not accept "non-competition" clauses prohibiting it from investing in or broadcasting sports or films which competed directly with BSkyB.

Such non-competition clauses, included in contracts signed between BSkyB and the two large UK cable companies, Nynex CableComms and TeleWest, are the focus of complaints by the cable industry lodged with the Office of Fair Trading and competition authorities in Brussels.

"It just doesn't make sense to have a monopoly provider and it certainly isn't in the best interests of viewers," Mr Bates said.

Bell Cablemedia would continue to encourage "cable exclusive" programming, working with other cable companies, even if it signed a long-term service agreement with BSkyB.

Mr Bates also revealed details of a three-way trial with Nynex and TeleWest to test interactive multimedia services over an 18-24 month period. The companies are to look at technical viability, billing systems and customer response to various entertainment and educational products.

Eugene Connell, president of Nynex, said the trials had "the potential to provide exciting new products to home and businesses".

During the technical stages of the trial, the three companies will attempt to create a workable national network of broadband services accessible by all cable operators.

The marketing stage, considered by the partners as the most important, will generate information about the kinds of services consumers might actually pay for. Three franchise areas, one from each of the partners, will be selected for the trials, and a minimum of 2,000 customers will take part.

The project's backers stressed they would be able to benefit from economies of scale by working together. They also said that the results would be shared with other cable operators.

The multimedia tests were seen by the cable industry as a necessary response to the technical and marketing trials being done in Ipswich by BT, which is testing video on demand and home shopping services using telephone lines.

Bell Cablemedia also announced yesterday that profits had climbed to pounds 1.2m in the three months to March, compared with a loss of pounds 3.1m last time, although the figures were inflated by a pounds 9.1m gain from the public offering of shares by Videotron, in which Bell Cablemedia has a 26.3 per cent interest.

Ross Cope, finance director, said that, without the gain, losses would have climbed to pounds 7.9m, as the company continues to build its basic network. During the quarter, 60,000 more homes were passed, bring the total to about 422,000. When complete, the network will pass 1.7 million homes.

The company confirmed, however, that "churn," the rate at which customers disconnect from the system, remains at a high 40 per cent for cable and 20 per cent for telephone services.

Bell CableMedia has set up a trial in one of its franchise areas to test ways of reducing churn rates, including more comprehensive credit checks and yearly contracts. Mr Bates said churn in the test market had been reduced to about 20 per cent.