An article in The Independent last weekend claimed that BT is planning to move into the broadcasting space and compete with BSkyB, whose Sky+ service includes a personal video recorder that lets customers record TV broadcasts onto its hard drive and watch them at a later date.
A similar product could be plugged into BT's high-speed ADSL network, recording selected programmes that could then be viewed on the home PC or TV.
BT made a move in this direction in 2002, when it successfully applied for a broadcasting licence. However, City investors have reacted negatively in the past to the idea of Britain's dominant telco attempting to take on the likes of BSkyB and the BBC, and the idea was being played down by BT on Monday.
"It's still early days," said a BT spokesman, adding that "we're not planning to compete with broadcasters."
Some 90 percent of UK homes and businesses are connected to an ADSL-enabled exchange, and this percentage is expected to top 99 percent by this summer. However, due to physical restrictions many customers live too far from their exchange to be able to get a service quicker than 512 kilobits per second. This would be much too slow for broadcasting.
Video Networks operates a service called HomeChoice, which delivers digital TV, video-on-demand, and Internet access all down a BT phoneline.
BT currently doesn't offer a similar service, but is working on a number of technologies that could be used to enhance the delivery of TV across its broadband network. This includes its plans for 'flexible bandwidth', where users could choose to get a much faster broadband connection for a short amount of time.