Vallance demands TV rights for BT network: Fibre-optic cabling could hinge on relaxation in rules

Click to follow
The Independent Online
SIR IAIN Vallance, chairman of BT, has called for an urgent change in Government policy that would allow the company to invest pounds 15bn to install a fibre-optic network to homes and businesses throughout the UK.

Sir Iain said that the ability to deliver multimedia services ranging from television to interactive medical counselling over such a network could 'form a pivot for the balance of national economic success'.

In evidence to the Trade and Industry Select Committee, Sir Iain launched his most vigorous attack to date on the Government's policy of prohibiting BT from delivering broadcast television over its telephone network to the home. He said that without the guaranteed revenues from TV services, BT could not justify the expenditure on the fibre-optic cabling of Britain and might be forced to find another home for shareholders' funds.

'There is something of a race on, to be in the vanguard of the information age - to get the first, the most and the best infrastructure and services in place. But there needs to be a clear, non-discriminatory public policy framework to give this country the best chance of success,' Sir Iain said.

He told the select committee that BT had a technological lead but it needed to be built on quickly. The restrictions had to be lifted within three years if the company was to go ahead with the investment required, he said.

The Government is concerned that the fledgling cable television industry would be threatened if BT were allowed to deliver television and has said that the restriction will not be reviewed until 1998 at the earliest. The company is worried that any review could take years.

Although BT is testing services including video-on-demand and home shopping over its telephone network, Sir Iain argued that there was a great deal of uncertainty over how much people would use those services and how much they would be willing to pay.

Without the revenues from TV, the company says it will be able to justify only a limited investment - a few hundred million pounds - in upgrading the network to deliver multimedia services. In that case the main beneficiaries would be larger businesses which use the telephone network most, Sir Iain said.

BT also wants to be allowed to use radio to complete the link to homes where laying cable would prove too expensive.