BT hopeful of end to ban on TV services: Opponents fear that committee report will threaten pounds 10bn investment in cable sector

THE battle between BT and the cable television industry will reach new heights this week with the publication of a report by the Trade and Industry select committee on the fibre-optic cabling of Britain.

BT is upbeat about the report, which it hopes will recommend an early end to the ban on the company using its telephone wires to deliver television and other entertainment services.

Opponents say lifting the ban would threaten an investment of up to pounds 10bn in the cable television industry by the end of the decade. But BT says it cannot embark on a pounds 15bn investment to build 'information superhighways' around Britain unless shareholders are guaranteed the rate of return that entertainment services could provide.

BT is confident it has won over many MPs for an end to the ban, and over the past few months has carried out one of the most intense lobbying campaigns seen at Westminster. But it is concerned that pressure on Conservative members of the committee may have recently been brought to bear by Michael Heseltine, the President of the Board of Trade, who is against an early end to the ban.

The Government-imposed ban runs until 2001 with a possible review by the regulator, Oftel, in 1998. Don Cruickshank, the director-general of Oftel, told the select committee: 'There are no plans to remove the restrictions and no commitment to do so.' He believes investors could be frightened off if the ban on BT is relaxed.

During the select committee's investigation, it was clear that some members were worried Britain would be left behind in the information revolution unless BT carried out its plans. The cable television industry privately admits that it lost the advantage to BT early on. The industry believes that there may be a recommendation to lift the ban earlier than it would like, but in a phased way.

The cable industry is widely regarded as the main threat to BT in local telephony. The sector is dominated by big foreign companies, many from North America. Some, including Nynex of the US, are linking contiguous cable franchises with a view to building large regional television and telephone networks which could compete more effectively with BT.

Cable companies expect to have 700,000 telephone lines installed by 1995 and are adding 25,000 every month. The companies have doubled the number of business lines - BT's most lucrative market - to 50,000 over the past year.