View from City Road: BT puts cat among cable company pigeons
Friday 04 March 1994
As far as can be made out the rules state that BT will be allowed to offer full broadcasting down its telephone wires after 2001, subject to an interim review in 1998.
Cable TV companies are extremely upset by BT's move, epecially as it is backed by the big names in broadcast provision. The cable companies have spent pounds 2bn so far in digging up pavements and roads to connect UK households to their services, and they plan to spend between pounds 6bn and pounds 8bn more by the end of the decade.
BT is arguing that video-on-demand is not the same as broadcasting. Customers will interact with the new service to select the timing and content of their viewing rather than gaze at a dumb terminal.
Clearly there is much blurring at the edges between interaction and broadcasting. The Office of Fair Trading ought to take the view that if consumers want the extra services the Government ought not to stand in the way and the cable companies should pipe down.
There are, in any case, one or two hidden agendas behind BT's action. Mercury and the cable companies, which offer low-cost or even free telephone services in the local loop, are eroding BT's market share.
The combination of Mercury and the cable companies is likely, the brokers Smith New Court say, to take about 2.5 per cent of the residential telephone market away from BT every year until the end of the decade, reducing its share to 80 per cent.
It is clearly in BT's interest to slow the rate of attrition in its market share from the more dynamic cable companies. Already BT is marketing BSkyB satellite dishes on the grounds that every home with a dish is unlikely to want cable TV as well.
Video-on-demand is obviously another way of reducing the attractions of cable and so potential loss of telephone custom.
The second hidden agenda is more far-reaching and involves the building of an 'information super- highway'. BT has no intention of spending billions on fibre optic links in the local loop if it can only use it for telephone calls.
Video-on-demand is a way for BT to earn a decent return on an investment in largely fibre optic cable that could cost pounds 15bn. BT will no doubt argue that there would be economic gains for the nation from such a network. It is probably right. If cable companies want to compete with BT's video- on-demand they should deliver better-quality programmes.
Jeremy Paxman reveals he has heard senior Tories calling activists 'swivel-eyed loons'
Gay couple beaten in park urge MPs to moderate language on gay marriage
Strewth mate. Aussies wave goodbye to Britain as it becomes too pricey to stay
X marks the spot: The find that could rewrite Australian history
'There are empty spaces where there used to be living rooms, bedrooms, classrooms': President Barack Obama says America is praying for Oklahoma in wake of tornado that claimed 24 lives
- 1 'He was lucky he didn't die' - George Michael fell out of speeding car onto M1 motorway, according to eye witness
- 2 Austerity has hardened the nation's heart
- 3 Gay couple beaten in park urge MPs to moderate language on gay marriage
- 4 Why Arsène Wenger must spend to put icing on the cake and buy likes of Stevan Jovetic for Arsenal
- 5 'It was just like the movie Twister': Man survives Oklahoma tornado by taking refuge in horse stall
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.
iJobs Money & Business
£180 - £230 per day: Orgtel: Operations Analyst - Leading Bank in the City of ...
£500 per day: Orgtel: A top tier banking client urgently requires Finance Busi...
£425 - £550 per day: Orgtel: Senior Finance Project Manager - £550 - Bristol -...
£150 - £250 per day: Orgtel: KYC Analyst - London - Banking - £150-250/day C...