The effect of the two cable operators, NTL and Telewest, can also not be under-estimated.
NTL's independence also helped it in its struggle with its last remaining rival, Telewest.
It makes it a more difficult acquisition given that NTL has got a lot of debt.
You can t buy something with tax losses, and NTL can t become more leveraged than it already is.
The firm was created from the merger of NTL and Telewest, and Sir Richard Branson's Virgin Mobile.
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Among those joining BT in giving evidence were net providers AOL, NTL, Freeserve, and telecoms regulatory watchdog Oftel.
NTL, Britain's biggest cable operator, has had to abandon plans to buy its software from a third company.
Many of the set-top boxes supplied by NTL have a cable modem inside that could do the same job.
One reason for investor skepticism may be NTL s weighty debt burden.
Branson, meanwhile, is the majority shareholder in cable company NTL -- currently a smaller player in the UK television market.
The deal gives Microsoft a piece of the action in Europe's telecom market, while ntl gets access to Microsoft's software expertise.
Speculation is rife that NTL will next make a bid for Telewest.
The Business Director, Mr Bates, says the education authority has set down the milestones - NTL is merely helping to achieve them.
Cable firm NTL already offers a broadband service via its set-top boxes.
NTL, which owns most of the country's cable networks, says it is planning to launch a service next year, but it doesn't know when.
If you dig a little deeper this looks extremely opportunistic on the part of NTL. It s got the slimey hands of investment bankers all over it.
Currently there's talk at Virgin of splitting up with NTL, the British cable company that's a 49% partner in Virgin Net, an Internet search portal.
"There is a dark secret in the broadband world that NTL is including its 128k product in its figures which clearly is not broadband, " he said.
Analysts warned at the time that renaming the struggling NTL would do nothing more than taint Virgin's reputation, while BSkyB would continue to be a looming threat.
NTL, recognised in the industry as the most innovative company, also has the most comprehensive infrastructure cable, mobile telephony, a national fibre-optic network and a television broadcast network.
NTL, a leading British cable company, raised no competitive issues.
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Companies still taking on subscribers - which include Freeserve, RedHotAnt and NTL - are restricting the numbers that are signing up in an attempt to keep the service manageable.
Cable firm NTL said in August it had 300, 000 high speed subscribers, while the UK's second cable operator, Telewest, claimed 192, 000 broadband customers in the higher band of 152 kilobits per second.
Unfortunately the companies did not move fast enough, and both NTL and Telewest, the companies that emerged out of the round of business failures, takeovers and forced mergers, were bankrupt by the end of the process.
Some reckon BSkyB is trying to protect its pay-TV business against the looming threat of television over Internet, including BT's forthcoming "Vision" IPTV product and the newly enlarged cable concern NTL, which has added rival Telewest and the cell provider Virgin Mobile.
But with NTL due to change its name to Virgin Media next year, NTL also has UK commercial broadcaster ITV in its sights as a takeover target, part of its plans to offer television as well as broadband, fixed-line and mobile telecommunications services.
"We at TopCoder are thrilled to be again working with Harvard and NASA to provide creative and inventive support of NTL's mission to deliver critical solutions while recognizing the need to return high taxpayer value, " said Rob Hughes, President and COO of TopCoder, Inc.
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"The board believes that whereas there is obvious appeal to NTL in gaining control of ITV's substantial and successful business, from ITV's perspective there is little, if any, strategic logic for ITV to combine with NTL, " ITV said in a statement to the London Stock Exchange.
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