View from City Road: BT puts cat among cable company pigeons

Where does interaction end and broadcasting begin? Much arcane argument on the subject is threatened as the UK cable television industry heads for the courts in an attempt to unplug British Telecommunications' newly launched experiment in providing video-on-demand to its telephone customers.

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.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Guru Careers: Graduate Editor / Editorial Assistant

£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine