Foxtel hits back over content access fears

Foxtel chief Kim Williams has hit back at claims made May 31 by telco Optus that the pay-TV group’s proposed A$1.9 billion merger with Austar could threaten competitive access to content.

Optus CEO Paul O’Sullivan used a keynote speech at a the CeBIT conference to call on the competition regulator to consider creating “must-share provisions” as part of its evaluation of the Foxtel-Austar merger.

Williams described the comments as self-serving and Optus’s position as “delusional”. “It appears that Optus has a position on content which equates to one where we do all the work and they reap a free-rider benefit with no strategic, financial or risk input by them,” he claimed.

“In our view, their approach should be judged in light of the history of Optus’s failure in content initiatives and services over at least the past ten years, where they have had access to Foxtel services to resell on the Optus cable since 2002. To say I find the position unsatisfactory, delusional and evidence of historical revisionism on a grand scale is to understate my response.”

O’Sullivan is concerned that Telstra , which has a 50 per cent stake in Foxtel, could be a preferred distributor of key content.

“There is a real threat here that we allow those with deep pockets to try to tie up content and applications to create walled gardens, to create content monopolies that restrict people’s access to content and innovative applications,” O’Sullivan warned.

Williams contends the proposed merger will not affect the acquisition of content. “The market in which both Foxtel and Austar operate is highly competitive, where we face vigorous competition from the reinvigorated commercial and national broadcasters and their digital multi-channels, new IPTV, including FetchTV, and on-line competitors such as streaming services over broadband networks (such as iiNet) and ISPs that provide content themselves, online movie rental and download services, and DVD rental and sales,” he said.

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