Australia - Pay TV - Content - Foxtel-Optus Deal - Overview and Analysis

Synopsis

This report has been archived and was last updated in May 2004. In March 2002, Optus announced its intention to hand over its content arrangements to Foxtel. It was no longer able to sustain its ongoing losses in this industry and was threatening to pull out of the residential (cable TV) market altogether if the deal was disallowed by the Australian Competition and Consumer Commission (ACCC). This report looks at how the proposal developed over the course of 2002 on the way to an ACCC rejection and eventual approval. Our extensive analysis of the issues and ACCC decision is included.

Table of Contents

• 1. Synopsis
• 2. Foxtel-Optus content sharing deal
  • 2.1 Details emerged
  • 2.2 Competitive Carriers’ Coalition
• 3. Undertakings to gain ACCC approval
  • 3.1 Undertakings from Foxtel
  • 3.2 Extra undertakings from Foxtel
  • 3.3 Undertaking from Optus
  • 3.4 Undertaking from Telstra
  • 3.5 Undertaking from Austar
• 4. ACCC approval of the deal – November 2002
• 5. Analysis of the ACCC approval
  • 5.1 Bleak competition prospects
  • 5.2 Why such generous undertakings?
  • 5.3 Terms and conditions
  • 5.4 Look closely…
  • 5.5 Optus intentions more than cost saving
  • 5.6 ACCC failed the consumer
  • 5.7 Pessimistic, and with good reasons
  • 5.8 Access to remain the issue in the future
  • 5.9 Protecting Telstra
  • 5.10 Final decision: no access to digital pay TV
• 6. Effects of the Foxtel-Optus deal
  • 6.1 Overall results will be minimal
  • 6.2 The crux of the problem
  • 6.3 Related effects
• 7. The broader picture
  • 7.1 Monopolies in telecom, TV and broadband
  • 7.2 The power of the consolidated moguls
  • 7.3 Let’s seize the opportunity and move on from here
• 8. Related reports