C&W merger may hit buffers, BT warns

British Telecom warned today that the proposed merger that would bring together Cable and Wireless (C&W), Videotron and the UK arms of Bell Canada and Nynex CableComms, could hit a regulatory buffer. If approved, the combined company would be a huge force in Internet, cable, and TV services.

"In principle, we welcome this," said a BT spokeswoman. "We would prefer there to be big players who compete equally because it could change the whole issue of what we call asymmetry where BT and Mercury are restricted to operating only in telephony rather than both entertainment and telephony as the smaller cable companies can. If there were to be three big players like BT, C&W and AT&T it would put us in a position where we could say: 'look, you don't need this artificial regulation'. We're very confident in our ability to compete."

However, she added that the proposed merger was likely to come under some close scrutiny. "This proposed group does raise a lot of questions for regulatory bodies. Only last week, Don Cruickshank, the overall telecommunications regulator for Oftel, said he would look askance at companies who attempt the combination of entertainment and telephony."