MEDIA: SPOTLIGHT ON - NTL AND CABLE AND WIRELESS/Cable faces another setback from DTI competition inquiry/In whose interest is cable now being referred to the MMC, Alasdair Reid asks

The Monopolies and Mergers Commission was at the centre of yet another Whitehall farce last week. Although, this time, it can advance the excuse that it was in fact the unwitting victim of a bizarre whim of the trade and industry secretary, Stephen Byers - a couple of bizarre little whims as it happens, both of which were announced on the same day. Byers not only ordered an MMC investigation into Vivendi’s acquisition of a 25 per cent stake in BSkyB but also an inquiry into the proposed takeover of the Cable and Wireless Communications cable networks by NTL.

The Monopolies and Mergers Commission was at the centre of yet

another Whitehall farce last week. Although, this time, it can advance

the excuse that it was in fact the unwitting victim of a bizarre whim of

the trade and industry secretary, Stephen Byers - a couple of bizarre

little whims as it happens, both of which were announced on the same

day. Byers not only ordered an MMC investigation into Vivendi’s

acquisition of a 25 per cent stake in BSkyB but also an inquiry into the

proposed takeover of the Cable and Wireless Communications cable

networks by NTL.



BT will be celebrating, obviously, but these developments are arguably

of greatest potential benefit to one man and one man only - Rupert

Murdoch. After all, they directly address the two main threats to his

status as a broadcaster in the UK - a possible takeover by Vivendi and

the long-term threat to Sky Digital of cable as an interactive digital

media platform.



Understandably, given that the Office of Fair Trading had already waived

the deal through and, in the absence of any rational explanation from

Byers, industry conspiracy theorists immediately jumped to the

conclusion that Murdoch had lobbied for this. And as with Margaret

Thatcher, so with Tony Blair and the new Labour Government: Murdoch’s

voice is heard. Perhaps. But this is to forget that he didn’t get to buy

the Manchester football club he wanted. On the other hand, it could be

the quid pro quo for that little setback.



Paul Longhurst, the managing director of digital and interactive media

specialist, Quantum Media, thinks that, whatever way you look at it, the

decision is outrageous: ’I haven’t seen a shred of justification for the

cable referral. There are no real issues of competition within the cable

industry itself because the franchise holders have never been in

competition with each other. They compete with other providers of

television and telephony.



There are competition issues concerning cable - for instance, whether it

should be required to take interactive services like Open - but

competition law should be all about what is in the best interests of the

consumer.



’I think it is very clear that the merger would enable the consumer to

receive better and more cost-effective services. We’re seeing yet

another attempt to slow down cable and everyone agrees that cable is the

best integrated, interactive option over the long term.’



NTL’s chief executive, Barclay Knapp, still hopes to get clearance in

order to complete the deal by the spring of next year and will be giving

the MMC every assistance in speeding it to a conclusion. He states: ’We

continue to believe that the combination of (NTL and the cable assets of

CWC) will provide significant new services, choice and competition for

the consumer and business telephone and television market in the

UK.’



Do industry groups, such as the Institute of Practitioners in

Advertising, agree? And will they also be helping the MMC to arrive at

the right decision? Jim Marshall, the spokesman on television issues in

the IPA’s media policy group, says that, unfortunately, cable still

doesn’t set many pulses racing: ’The referral is obviously a bit odd,

but I’m not terribly worked up about it to be honest. And it’s a sad

indictment of the cable industry that I can’t imagine too many people

getting exercised about it either.



’In terms of digital and interactivity, it’s the platform with the

greatest potential and, on paper, it should win hands down. But there

has already been a hell of a lot of consolidation in the cable industry

and the existence of the Cable and Wireless cable division is in itself

evidence of that.



’Yet penetration remains worryingly low and has been achieved on the

back of cheap telecoms deals. People might not get very upset about

possible setbacks for cable because they’re not convinced that cable was

going anywhere in the first place.’