Kingston Communications, the Hull-based telecoms company, yesterday announced plans to begin offering its pay television, internet and telephony services across the country.
The company, which is 44.9% owned by Hull city council, aims to be among the first to take advantage of the break-up of British Telecom's monopoly of local services from the start of next year.
Kingston has applied for access to 1,000 BT local exchanges with the aim of installing equipment which will allow it to take over lines at the request of customers and upgrade the old copper wires for broadband use.
The company is using DSL (digital subscriber line) technology which can transmit high speed data including multi-channel TV over the existing networks.
Previous estimates from Kingston have put the cost of developing a nationwide pay-TV business at £1bn. Kingston has been running a service using DSL in Hull where it has partnered with BSkyB. The Hull service, called Kingston Interactive Television, also includes video-on-demand as well as 60 TV channels, internet access and conventional voice services.
The company spent £3m upgrading its network in Hull which enables users to download at speeds of 256kb compared to existing ISDN line speeds of 56kb.
The joint venture in Hull was announced eight months ago but there remain question marks over BSkyB's willingness to enter into a broader partnership.
Tony Ball, BSkyB chief executive, said in July that he was also talking to British Telecom as a potential partner using DSL.
BT would be keen to attract the most powerful brand name in pay TV in the hope of keeping the number of customers deserting to the minimum.
BT is running trials in London with video-on-demand company Yes Television.
BT's monopoly of the so called "local loop" will end on January 1 - six months earlier than originally planned. Rivals hoping to take advantage of the break-up have nevertheless been strongly critical of BT for allegedly obstructing their paths.
Steve Maine, Kingston chief executive, described yesterday's application to BT as "a major step forward" for the company. "We hope that BT will work with us and other operators to make advanced services available within the agreed industry timescale," he added.
Kingston will also use the exchanges for its corporate telecoms division, Torch, which is operating in six regions in Britain.
The services will be supported by Kingston's broadband national network which is under construction in co-operation with Colt Telecom.
The network will link the company's six existing city rings constructed for Torch as well as the larger British Telecom exchanges.
The national backbone will ensure that as much traffic, and consequently revenue, as possible remains on Kingston lines.
The unbundling of the local loop took on a political dimension when the chancellor, Gordon Brown, made it known that he wanted the date brought forward. The government sees the break-up of the local monopoly as key to the widespread introduction of high bandwidth services.
