Joint Committee on The Draft Communications Bill Appendices to the Minutes of Evidence


Memorandum submitted by Video Networks


  1.  Video Networks is one of the world's leading broadband television and video-on-demand companies. Video Networks' HomeChoice service delivers films and programmes from a central server down the telephone line to the television set so that content can be watched at any time. Content can also be paused, forwarded and re-wound like a video or DVD. Customers order what they want via a remote control and the selection is viewed instantly. HomeChoice provides customers with access to over 1,000 pay-per-view film titles and a wide variety of television, sports and music programmes via individual subscription services, which can be purchased separately or as a complete package.

  2.  In partnership with dktv, HomeChoice has enabled local authorities to bring information on public services on-demand to local residents in a simple TV format.

  3.  HomeChoice also offers a fast Internet service for a fixed monthly subscription fee.

  4.  Video Networks is supportive of the comments in the submission by Intellect. We would also like to bring the following points to the attention of the Joint Scrutiny Committee.


  5.  We support the creation of OFCOM as the single regulatory body responsible for the communications sector and believe that a "light touch" approach to its regulatory responsibilities is appropriate.

  6.  Video Networks believes that OFCOM's greatest responsibility will be to ensure that the market is competitively fair and that organisations within its remit are able to compete on a level playing field.

  7.  The regulation of access to BT's network has not been wholly successful to date and OFCOM's powers need to reflect this lack of success. It will be especially important that OFCOM applies rigidly all competition rules relating to dominant networks. We believe that the critical period will be the transition from Oftel to OFCOM.


  8.  The changes relating to cross-media ownership and proposed rules to allow non-European companies to acquire ITV companies is supported by Video Networks. We are a small but ambitious organisation that has been funded from private investment and we believe that this move could help to make the UK market more appealing to any potential US investors as there would be the opportunity to take a strategic longer-term view about the potential size of the market.


  9.  The draft Bill proposes to make video-on-demand non-licensable (Clauses 154, 155 and 238). However, unless there is an industry-wide binding code of conduct covering child protection issues in place by the autumn of this year, the Secretary of State could amend the definition of licensable through secondary legislation (Clause 156) to include video-on-demand.

  10.  Whilst Video Networks is supportive of all effective child protection measures, we believe that we have a system already in place that is superior to a code of conduct. All HomeChoice customers are given personal identification numbers to prevent underage customers from watching unsuitable content.


  11.  Simon Hochhauser, 49, founded Video Networks in 1992. He was responsible for the creation, in 1983, and the development of the technology-focused St James's Venture Capital Fund, part of the J Rothschild Group of Companies. While there, he was instrumental in the start-up and development of the software company Insignia Solutions Limited (now traded on NASDAQ in the USA) and the successful cellular telephone retailer Cellcom Limited. Simon previously worked at the New York investment bank Lehman Brothers, specialising in corporate finance and mergers and acquisitions with particular reference to technology companies. He has a PhD in Physics from the University of London and performed post-doctoral research in laser and fibre optic technology.

June 2002

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