LONDON — Britain’s new Labor government has indicated it may allow telecommunications giant British Telecom to enter the entertainment broadcasting market in the near future, a development that would severely antagonize the U.K.’s cable operators.
At present, BT is banned from offering entertainment services at least until 2001, a decision taken by the previous Conservative government to allow the cable industry to gain a commercial foothold as it built its infrastructure and subscribership.
The new National Heritage secretary, Chris Smith, has now said BT could become an entertainment player sooner rather than later providing it fulfill a pledge to connect schools, hospitals and libraries to the Internet free of charge. He added that the Department of Trade and Industry would soon hold talks with BT.
BT has not invested nearly as heavily in new fiberoptic technology as the cable operators, who, besides supplying TV channels, also provide competing telephone services to those of BT. To create a broadband network, BT estimates it will have to invest as much as $25 billion.
In a related development, the newly-created Cable & Wireless Communications and Telewest, the U.K.’s two biggest cable operators, are reconsidering their planned launch date for digital TV services in the wake of satcaster BSkyB announcing last week that it is delaying its 200 digital channel launch until the spring of 1998.
CWC and Telewest had planned to launch jointly in the fourth quarter of this year, but they may now choose to delay until a time close to or concurrent with that of BSkyB.
At present, cable’s most attractive programming is provided by BSkyB, and both CWC and Telewest are interested in the interactive services promised by British Interactive Broadcasting, the joint venture formalized last week between BSkyB, BT, the Midland Bank and Matsushita to finance BSkyB’s digital plans.
But Telewest, for one, is not convinced BSkyB’s digital decoders — of which BSkyB has ordered one million units — are compatible with the cable industry. BSkyB has said its boxes could be upgraded for cable.