Labour thinks again about ending BT ban

The Labour Party is retreating from its policy to allow an early end to the ban on British Telecom broadcasting entertainment down its phone lines after fears by shadow ministers that the approach could kill off the cable companies.

In a clear shift in its approach, Labour has signalled a much more sympathetic stance towards the cable companies after a new and serious threat to their business emerged in the shape of digital terrestrial television. The move will be met with huge relief in the cable industry which has spent two years intensively lobbying Labour on the issue.

At its party conference in 1995 Labour stunned the cable companies by revealing an agreement giving BT, chaired by Sir Iain Vallance, a phased end to the broadcast ban in return for the group's commitment to extend fibre-optic "superhighway" links into schools.

An influential report a couple of years ago by the Trade and Industry Select Committee also suggested the ban should be reviewed in 1998, giving rise to the possibility that the restriction would be lifted.

There were howls of protest from cable companies on the grounds that allowing BT to compete in the television market would prejudice their pounds 12bn, 10-year, investment programme to homes. So far about half the cash has been spent. The Government's policy is to wait until 2001 to review the ban, with no guarantee that it will be removed.

However Geoff Hoon, the Labour technology spokesman, said yesterday that the whole industry had changed rapidly since the original "deal" with BT. "Digital satellite television and digital terrestrial television are going to make a fundamental difference. If I was a cable company I'd be seriously nervous at the moment."

He also suggested BT's priorities in offering television services using sophisticated computer compression technology may have changed. "The other question here is what BT now wants. In their recent trials of interactive television in Colchester they seem to have found people didn't want to sign up for movies through the service. They seem to be evaluating the future for the project."

Though the trials to 2,500 homes ended last June, BT has yet to decide the future of the technology. One suggestion is that it is much more likely to be used to provide high-speed Internet access services through copper phone wires than broadcast entertainment.

Mr Hoon said Labour was still committed to reviewing the ban next year if the party wins power, but it would do so in the light of new developments in the telecommunications industry. A favourable outcome for the group now seems much less likely. However Mr Hoon insisted the schools agreement with BT still stood.

The threat from digital terrestrial television, which bypasses cable or satellite delivery methods, has already hit cable share prices heavily. Rupert Murdoch's BSkyB has linked with Granada and Carlton to bid for a licence to offer a block of digital services using the technology. BT also has links with BSkyB and one theory was that the telephones giant may have abandoned its television ambitions for fear of damaging its links with the satellite operator.

The Trade and Industry Select Committee is also reviewing its approach to the broadcast ban and held hearings with BT and the cable operators last week. Labour's policy was broadly modelled on the committee's previous conclusions.

Martin O'Neill, committee chairman and a Labour MP, said it would be wrong to characterise the move as a shift of direction.

]However he said one question which would feature in the committee's conclusions was whether the ban had actually prevented BT from investing heavily in fibre-optic links. He added:

"The truth is that BT has invested quite a lot anyway. Circumstances have changed since our last report and the ban is not so much of a problem."

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot