Australia - Pay TV - Content - Foxtel-Optus Deal - Proposal and Rejection

Synopsis

In March 2002, Optus announced that it intended 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. This initial rejection is summarised and analysed here.

Table of Contents

• 1. Synopsis
• 2. Foxtel-Optus content sharing deal
  • 2.1 Details emerged
  • 2.2 Competitive Carriers’ Coalition
• 3. Analysis of the proposed deal
  • 3.1 Reasons behind the deal
  • 3.2 The key issues
  • 3.3 Monopolies in the making
  • 3.4 Consequences of the deal
  • 3.5 Preceding events centred around Telstra
  • 3.6 Infrastructure and structural separation
  • 3.7 Content choice
  • 3.8 Network digitalisation
  • 3.9 Wholesale availbility
  • 3.10 What’s in it for the consumer?
• 4. ACCC rejection of the deal – June 2002
  • 4.1 Proposal breached Trade Practices Act
  • 4.2 Acquisition of content
  • 4.3 Dominance of the Foxtel distribution network
  • 4.4 Supply of pay TV services
  • 4.5 Provision of channels to third parties
  • 4.6 First and last bid rights
• 5. Analysis of the ACCC rejection
  • 5.1 Operators handed an opportunity
  • 5.2 Forward-thinking ACCC
  • 5.3 ACCC put the onus on Foxtel and Telstra
  • 5.4 Access is the issue
  • 5.5 Pay TV players must sleep in the bed they made
• 6. Related reports