AAPT: Foxtel should offer service to telcos on competitive basis

By NZPA

Tuesday 8th October 2002

Australia's third largest telecommunications provider AAPT says Foxtel should be required to offer its pay TV service on competitive terms to all telecommunications providers for resale.

AAPT today released a submission to Australia's competition watchdog, saying without such an offer, Australia's competition watchdog should not authorise the proposed bundling by Telstra and the Foxtel-Optus content arrangements.

The submission to the Australian Competition and Consumer Commission is part of growing opposition to the Foxtel-Optus pay TV content sharing proposal.

AAPT is owned by Telecom New Zealand, a direct competitor to Australian telco giant Telstra Corp which has a 50 percent stake in Foxtel.

The remainder of Foxtel is split between News Corp and Publishing & Broadcasting Ltd, while Optus -- the number two telco -- is owned by Singapore Telecommunications Ltd.

Telstra chief executive Ziggy Switkowski has said the telco's ability to bundle Foxtel pay TV on the same bill for telephony customers was integral to the Foxtel-Optus deal.

AAPT regulatory director David Havyatt said Telecom NZ considered the anti-competitive effects of Telstra's proposed bundling could be alleviated by the following measures:

- Foxtel undertaking to provide a subscription television service for resale by telecommunications carriers on a non-discriminatory basis;

- Regular imputation testing by the ACCC to ensure that Telstra does not use its market power to engage in price squeezes, leveraging and other anti-competitive behaviour in connection with the bundled offer;

-Telstra to be ring fenced from all decisions by Foxtel on the resale of its pay TV services to telecommunications carriers; or

-Telstra to be prevented from materially altering the terms of its bundling programme without ACCC approval.

"There is nothing in Foxtel's undertakings that would alleviate the effect of Telstra's proposed bundling of telecommunications and pay TV services on competition for fixed-line telephony and other telecommunications markets," Mr Havyatt said.

"If the ACCC permits Telstra to bundle, then other telecommunications providers will also need access to pay TV to offer similar bundles in order to remain competitive.

"If they do not gain access, there is likely to be an effective return to a duopoly telecommunications market."

Comments from our readers

No comments yet