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.
- 1 Chelsea victory parade mocked on Twitter as 'tens of fans' pack the streets of London
- 2 Preston fan who appeared to snatch Jermaine Beckford's shirt from eight-year-old boy identified and says: 'the truth will come out'
- 3 Johnny Depp facing 10 years in jail for illegally bringing dogs to Australia
- 4 US warned by Chinese media to stop meddling or 'war will be inevitable'
- 5 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Cyclist who knocked down three-year-old girl says his life has been 'destroyed'
Australian man punched in the face for defending Muslim women from abuse on train
Johnny Depp facing 10 years in jail for illegally bringing dogs to Australia
US warned by Chinese media to stop meddling or 'war will be inevitable'
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
The day that Britain resigned as a global power
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
A nation of inequality: How the UK is failing to feed its most vulnerable people
iJobs Money & Business
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...
£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...