Microsoft eyes up BT's cable franchises

Microsoft and British Telecom are refusing to comment on speculation that the software company is getting ready to buy two cable TV franchises from the telecoms giant. Reports at the weekend suggest that if the deal goes ahead, it would leave Microsoft free to hook millions of homes onto the Internet giving the company an enviable position in the UK. But as the UK sluggishly began to return to work today after the extended holiday break, both companies remained tight-lipped refusing to comment on the rumours. What is known, is that BT has already invited companies to register their interest in London-based Westminster Cable and BT Cable Services in Milton Keynes, north of London. The company is being forced to get shot of the pair in return for approval from the European Union for its part in British Interactive Broadcasting (BiB) -- an interactive joint venture with BSkyB, Matsushita and Midland Bank due to be launched later this year. When BT first announced it was looking for a buyer, pundits looked no further than the UK's three major cable operators -- Cable & Wireless, NTL CableTel and TeleWest. But in October last year, it was reported that the three only showed lukewarm interest in the franchises, with one source suggesting that all three had concerns about the cost of replacing BT Cable's "outmoded analogue network" with a digital service. ®