BT agrees on-line deal

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British Telecom has agreed to wire, free of charge, every school, college, hospital and library in Britain to the information superhighway, Tony Blair told the conference. He said David Blunkett, Labour's education spokesman, had also opened discussions with computer companies to ensure that every child had access to a lap-top computer.

The BT deal, which follows meetings between Mr Blair and Sir Iain Vallance, BT's chairman, would, for example, allow small or rural schools to link up electronically with teachers at a remote location. Medical experts would be able to examine patients by video link-up. All these institutions would gain access to a vast amount of information. Once the link was installed they would have to pay for services.

In exchange for BT's offer a Labour government would from 2002 allow BT, Mercury and other telecom providers to use their networks to broadcast entertainment services into British homes, in direct competition with cable operators.

This "open market" was already a firmly established part of Labour policy, but had not yet been made the basis of any explicit agreement involving BT. The concession could prove profitable to BT, delivering to them a potential market comprising millions of consumers.

The cable industry downplayed the significance of the deal. A spokesman for the Cable Communications Association said: "There's nothing fundamentally new about what Blair said today. We certainly share his view about the social and economic benefits of the information highway."

He added that the cable industry announced its own plans to wire schools around the country last January, and has since connected "hundreds" of institutions at no cost. Hospitals, universities and local councils have signed up as clients of the cable operators, and are using video- conferencing and other technologies, for instance to develop distance learning and remote medical diagnosis.