The tests are currently limited to around 100 BT employees in the London area, but could lead to a commercial rollout as early as summer 2005.
Technical details of the device aren't yet available, but it is understood that it will support 'time-lapsed' viewing, in which a programme would be available over BT's broadband network some time after its original transmission.
BT also hopes to make films available over the service.
BT has long been keen to use its high-speed ADSL network to transmit television footage that could be viewed on a home TV. At present, its network isn't fast enough to support real-time video-streaming, as the maximum speed available to consumers is a one megabit per second (Mbps) service.
A spokesman explained that BT had calculated that a successful video-on-demand service would need 2Mbps connections.
"Our view is that you don't need a four megabits per second link. Everything a residential customer needs you can do with two megabits per second," said the BT spokesman, in a sideswipe at Cable & Wireless which is rolling out a 4Mbps service through its Bulldog subsidiary.
Reports in national papers over the weekend and on Monday claimed that BT was going into battle against Rupert Murdoch's BSkyB, but this has been denied by BT.
"There won't be a war with BSkyB. They'll hopefully be one of our content partners," said the BT spokesman.
BT also says that it isn't planning to manufacture set-top boxes itself, but is hoping that manufacturers of such devices will include support for its TV service.
BT was granted a broadcasting licence in March 2002, giving it the right to transmit TV and video in the UK.
City investors reacted badly in early 2002 in the past to the suggestion that BT would attempt to turn itself into a broadcaster. Since then, the telco has made big strides in the broadband space, so broadcasting may now be seen as less of a distraction.
Talkback
This is pointless,
More than five years ago now I was at a friend’s house in Colchester. Two of the people in that household worked (and still do) in non-technical roles at BT.
Beside their television was a small box. They were among a number of employees testing an on demand service over standard lines.
They could download programs and movies in about 10 to 30 minutes and the box also provided services for playing games from selected consoles, at the time the popular devices being snes and others.
Typically as trial users they did not have to pay much for services just small amounts for movies and some games rentals as I recall.
It is one thing to be charged for a service but it is quite another when more than four after availability technologies are still in the money for upgrades stage.
The main immediate hope for the clued up user seems presently to be the emergence of fast ip services through mobile phones. When combined with the free very high bandwidth downlink services available to practically all of Europe and the ultra low cost availability of wireless technology meshed using the more advanced capabilities of linux (software access points and routing) [advanced over other available operating systems].
It is unfortunate that v92's call waiting and MOH facilities are unavailable as this makes the demand for GPRS and later mobile technologies a necessity in the every day user scenario and as yet the required price drops have not arrived. The onslaught of the hutchinson 3G service brought some hope. Typically though an inability to make available their apparently higher bandwidth mobile data services in the UK (Australia have had the services from the outset) has meant a much lesser impact, in my opinion.
Another concern is that the proposed standards for the WiMAX facilities will cause disagreement and no doubt restrictions to be imposed upon current owners of 2.4GHz 802.11b/g services. If you read up on the ISP frequency ranges published some time back you will probably be horrified.
The entire point of this comment is that basically the public are being taken for a ride. Personally I do not see telecoms as a commodity any more, it is a necessity unless you are willing to pay lots of money just to yap with your teenage friends and that is all you want or if you are a field dwelling mud hut owner in rural nowhere. It is irritating that the public as a whole do not see that they are entering the realms of paying for 'nothing' and make some gesture towards setting up public services to provide for these things. It does not take much effort but so few people care.
Meanwhile BT are talking about the need for a slightly better ADSL connection to users houses - to me past experience says:
Long wait for most of us.
More expense for national upgrades (and we all know by now that upgrade can be anything from 'flicking a switch').
More expense for governing of the technology and regulating fairness.. (Why is it even necessary to regulate fairness for something that only works - or works best when everyone has an equal service and can only be a customer one they have the service).
When will people start to realize that there is more to communication than just getting there, it is what comes afterwards which is important; like using the technology to improve the quality of peoples lives.