BT is playing down reports that it has plans to launch a broadband television service but has confirmed that discussions with broadcasters are ongoing.

According to an article in the Independent on Sunday, BT had planned to sell a digital terrestrial television receiver together with a broadband modem for £40, with a £30 a month subscription for broadband access.

BT had approached the BBC and ITV about providing content for the project but has apparently delayed the launch of the package. This was originally planned for October but BT has gone back to the drawing board as the proposition was considered to be too complicated for consumers.

Customers are already able to obtain a Freeview set top box from BT which is manufactured by Netgem. This includes the facility for basic internet access and email.

A BT spokesman confirmed to informitv that there would not be any announcement “within the next few weeks” but would not rule out further developments before the end of the year.

He emphasised that BT would not be going into content provision, saying “BT TV is not going to happen, but we will work in partnership with broadcasters”. Discussions with broadcasters are understood to be ongoing.

The concept of BT using its broadband network for broadcasting was first aired in 2001 when Sir Christoper Bland, former chairman of the BBC, was appointed chairman of BT.

BT received a broadcasting licence in 2002, but City investors have to date reacted negatively to plans for the telco to compete with broadcasters.

The target has been set for over 99% of UK households to be connected to broadband exchanges by August 2005, but many consumers will still be unable to receive a service faster than 512 kilobits per second, which is generally considered unsuitable for live broadcasting of television quality pictures. In urban areas speeds of 2 megabits per second or more are possible.

Video Networks currently operates the HomeChoice service in London, which delivers digital television, video on demand, broadband access and a telephone service down a single line, but this requires special equipment located at each telephone exchange.

Meanwhile, the BBC has floated the idea of providing an Interactive Media Player or iMP to allow access to a seven day archive of selected television programming over a broadband network using a peer-to-peer file sharing system.