For many years telecom laws protected the cable TV companies by prohibiting BT from broadcasting down its phone lines. In September 1993, after discussions with the DTI and Oftel, the Independent Television Commission said the Broadcasting Act 1990 would let BT use its network to provide Video on Demand. VoD was classified as monocasting not broadcasting, as each viewer can get what they want, when they want it.
The twisted-pair copper wires which connect homes to BT’s telephone network were designed to carry analogue speech. The 3.5 kHz bandwidth limits long distance modem communication to around 50 kilobits/second. But ADSL lets the wires carry the 2 megabits needed for video compressed to the MPEG-1 standard for a few kilometres.
Asymmetric Digital Subscriber Loop was developed by BT, Bell Laboratories and Stanford University. It uses Discrete Multi-Tone modulation which splits the video payload into many separate data streams, typically 256. The raw video signal is piped by optic fibre to local exchanges and DMT coded for the last mile. Over 90% of homes were close enough to an exchange to receive 1.5 Mbit/s or 2 MBit/s.
BT trialed a few homes near its Labs in Martlesham, and in 1995 started a one year full service trial for 2,500 homes in Ipswich and Colchester. Movies were stored on a computer server and sent to homes on demand via individual coders and decoders. BT planned 400 servers across the country, delivering movies at around the same cost as tape rental (then about £2.50). In November 1996 BT promised to publish the results “in a few weeks”. But there was no formal announcement. Informally BT said viewers had been happy, but the crippling cost made a national service impractical. Elsewhere others were learning the same lesson.
As BT quietly shelved its plans for VoD, Hull Corporation’s arms-length subsidiary Kingston Communications in the North of England was promising its own independent service. In 1904 the British government had offered local councils the chance to compete with the national Post Office service. Six tried but only the Hull Corporation remained independent, serving 200,000 subscribers over a 120 sq mile area. Like BT, Kingston was banned from TV broadcasting. But they too saw the loophole in the 1990 Broadcasting Act which allows monocasting.
In 1996 Kingston ran a secret VoD trial using ADSL technology in 20 employees’ homes for six months. This widened to 250 telephone subscribers, with a computer server at Kingston’s exchange in Hessle storing movies. Unlike BT, Hull had no cable TV system to compete with, and with a tightly defined area knew the maximum number of subscribers to serve. Like BT, Kingston insisted that the trial was a success, but no commercial VoD service was launched. The company subsequently changed hands and is currently part of the Australian investment giant Macquarie Infrastructure and Real Assets (MIRA).
BT then changed tack and started using ADSL to provide subscribers with fast internet access instead of VoD. This was possible because Margaret Becket, then President of the Board of Trade, said Britain’s telephone companies could start start broadcasting from 1 January 2001. As a result, telecoms companies no longer had to use the hugely expensive VoD loophole in the Broadcasting Act. A third British company tried to use VoD for something completely different, but also quietly gave up.
In May 1995, while the telephone companies were getting excited about VoD, British Airways got excited too. For years all passengers had been obliged to watch the same movie on a cabin screen. Then there was a limited choice from tapes.