In an effort to gauge the possible anti-competitive consequences of Microsoft’s intended investment in UK cable network Telewest Communications [WAMN, 26-May-00], the European Commission has asked both companies to present detailed projections about how soon and to what extent high-speed phone connections will become serious competition to set-top cable boxes for receiving interactive digital services.

The question was posed during the course of EC investigations into the intended partnership. It is crucial to the outcome of the enquiry, because the duo’s anti-trust defence hinges on its argument that digital subscriber lines (DSL) are a viable alternative to cable lines. Acceptance of this premise would dispel fears about Microsoft's possible dominance of the set-top software market.

But competitors believe the influence of DSL on digital TV is as yet unknown. "Is that something that will come soon?," enquired one attendee at the hearings. "Today's DSL is not offering any video services."

That view is supported by UK-based market research company, Datamonitor: "It's far too early to make those forecasts," said Datamonotor’s David Cockram, who estimates that the nine million European homes currently receiving DTV will rise to 39m by 2004.

News source: Wall Street Journal