The broadcasting ban imposed on BT in 1991 could be lifted by Labour in return for linking schools to the Internet, as originally outlined by Tony Blair in 1995.
In its 1997 election manifesto, Labour said it would endorse the House of Commons' Trade and Industry select committee's proposal to allow "gradual entry by BT and others into full competition in the entertainment market".
This would mean lifting the ban imposed in a 1991 White Paper, which prevents BT from broadcasting entertainment services over its network.
Oftel had been scheduled to review the ban in 1998 but the Conservatives had promised the ban would be lifted in 2002.
However, a total ban would deter investment, already begun by cable operators, in local access infrastructure, said David Harrington, director general of the Telecommunications Managers Association (TMA). The restriction on BT has paved the way for cable companies to flourish in this area, the most notable competitive force being Cable & Wireless Communications, which pulls together Mercury with Bell Cablemedia and Nynex Cable Comms.
A BT spokesperson said it was "premature" to discuss whether the ban would be lifted. However, an industry source said BT has never outlined exactly how it would link up schools if it were given the right to broadcast over its networks.
BT is also close to announcing a deal with BSkyB to create an interactive TV system using the satellite operator's network.
A spokesperson for the Cable Communications Association said lifting the ban would be less significant than it would have been in 1995 because many cable companies have already made provisions. He said: "It is important to point out that Labour said it would 'relax progressively' because it doesn't want to be seen as writing a blank cheque to BT."
He said Labour assured the cable industry that it was keen to promote fair competition and protect against abuses which would ensure continued investment in infrastructure by cable operators.
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