Blair to soothe cable tensions

MATHEW HORSMAN

Media Editor

Tony Blair, the Labour leader, is to meet senior executives of the cable industry in a bid to allay fears that they are being left out of his party's plans to develop an information superhighway in Britain.

The meeting, scheduled for next Monday, is aimed at soothing tensions created by Labour's controversial deal with BT to connect every school, library and public institution to the information highway. Leading operators, including Nynex CableComms, Telewest, Bell Cablemedia and General Cable, are all scheduled to attend.

A spokeswoman for Mr Blair played down the significance of the meeting, saying it was merely "a reflection of his high commitment to the information highway". But sources in the cable industry confirmed the meeting was directly linked to concerns about the BT deal. "We believe that there was a certain naivety and confusion in Labour's initiative with BT," said an insider at one of the top three operators. "We have already connected schools and hospitals, without any undertakings from the Government."

BT was promised a review of rules prohibiting the telecoms giant from entering the entertainment broadcast business before 2002, in exchange for its undertaking to connect public institutions for free. "We are not knocking BT, nor making any crazy promises," Richard Woolham, director of the Cable Communications Association, said. "We just want to show we are making a contribution."

The cable industry has been eager to develop close ties with Labour in advance of the next general election. Jack Cunningham, now shadow Heritage Secretary, visited cable and telephone companies in the US during the summer. Most of the leading UK operators have North American part-owners.

"We felt we had excellent relations with Labour," Mr Woolham said. "But when they get up on the public platform, they tend to forget the cable industry. This is very damaging to investor confidence."

Cable stocks in the UK have performed indifferently. Worries about low consumer pick-up rates and lack of cable-exclusive TV programming have helped to depress share prices. More recently, however, some companies have managed to win new telephony business from BT, with 30,000 customers a quarter moving to cable telephones.

The cable companies are hoping for assurances from Mr Blair that Labour will recognise the contribution of the industry, and will not change the regulatory environment without considering the effects on the pounds 10bn cable business.