BT has selected Philips to supply the set-top box for what it describes as a “next generation TV service”. Capable of delivering high-definition video, it will include a personal video recorder with storage for up to 80 hours of programming.

The BT service, expected to launch in the late summer or autumn of 2006, will offer access to broadcast channels on digital terrestrial television, together with a television “catch-up” and video-on-demand service delivered over a broadband telephone connection. Trials will begin in the spring and early summer of 2006.

Further details of the proposed service were announced following news that satellite broadcaster BSkyB will acquire broadband service provider Easynet Group.

BT has appointed James Soames, the head of marketing for the BSkyB satellite television service to help launch its broadband television service. He will report to Lib Charlesworth, head of marketing and sales for BT Television Services, another former BSkyB executive.

BSkyB and BT will be in direct competition for customers, and previous marketing alliances are in question. “It is difficult to see the sense of promoting a direct rival,” said a BT representative.

Customers will have to be signed up with BT broadband to access the video service. It will be available without subscription, but will include pay-per-view options, with what is described as an extensive library of movies and music. Pricing details were not announced.

Programmes from the previous seven days broadcast schedule will be available on demand. It is not clear whether these will include all programmes across all Freeview channels or a selection, or indeed whether they will be available free or on a pay-per-view basis.

The BBC is currently evaluating its own service providing selected programmes available for download over a peer-to-peer network for viewing within a seven day window from the first broadcast. This may establish a precedent for “fair use,” but may not be acceptable to commercial channels and other rights holders.

The set-top box will also include a personal video recorder, with up to 80 hours of storage, comparable to the latest Sky+ product provided by BSkyB. The cost of the set-top box was not indicated.

BT says that there will also be interactive services, including online games, retail opportunities and community services. These will be enabled by an always-connected broadband return path. This will be a significant addition to the Freeview platform, which has suffered from the lack of a return channel to enable two-way interactive services.

“Our services will be a world first and will place power in the hands of the viewer,” said Ian Livingston, chief executive BT Retail. “No longer will BT customers be reliant on TV schedules. From next year, they will be able to watch what they like when they like. This is all about giving our customers choice, convenience and control.”

“We see next generation TV as a vital element of our vision for home entertainment,” he continued. “In an increasingly converged world, BT customers will be able to benefit from the combination of television, communications and the internet.” As an example, he said that football fans across the country will be able to chat using video telephony while watching a match.

Unusually, BT has selected a single source supplier for its set-top box. Philips is the largest electronics company in Europe, with sales of over 30 billion euro in the last year. Philips was a supplier of set-top boxes for the original ONdigital digital terrestrial television project.

It leaves Pace Microelectronics, the UK supplier of set-top boxes whose customers include BSkyB, out of the picture. French company Thomson is also out of the running.

“Philips is very excited to partner with BT to introduce this innovative new digital TV service to the UK market,” said Rudy Provoost, chief executive of Philips Consumer Electronics. “This co-operation is an important proof-point of our strategy providing consumers access to information and entertainment anywhere anytime, while preparing the road for HDTV. It is all about bringing innovation and ease-of-use to the consumer.”

As previously announced, Microsoft will be providing its IPTV Edition software for the service. IPTV, or internet protocol television, enables audio and video services to be delivered over a broadband data network.

“Microsoft is very pleased to be working with BT and Philips to realize an exciting new vision,” said Microsoft chief executive chief executive Steve Ballmer. “With BT service, Philips set-top boxes and Microsoft TV IPTV Edition software, the integrated entertainment and communications capabilities offered to UK consumers will be among the richest and most advanced in the world.”

Microsoft is also working on IPTV services with SBC in the United States, among other leading telecommunications carriers. SBC say that their “Project Lightspeed” is on track, but appear to have pushed back until mid 2008 their target to deliver video, voice, and data services to 18 million households over an integrated internet protocol network. A controlled trial of the service is expected later this year or in early 2006.