Australia - Pay TV - Regulatory - Telstra-Foxtel Divestiture

Synopsis

This report was archived in September 2007 and has not been updated since April 2005. The fallout from the Foxtel deal is creating a significant new monopoly in Australia across platforms (telecoms and cable TV) and across industries (telecoms and media). After the Foxtel/Optus deal the Minister issued another show-inquiry, this time in the broader implications of the deal on media competition. The Australian Competition and Consumer Commission (ACCC) clearly recognised this threat and advised the Minister that Telstra should divest its interest in Foxtel. He flatly refused the ACCC recommendation. Telstra consultant Professor Henry Ergas took up the case for Telstra and once again I am crossing swords with him. The report also explores the role that Sam Chisholm might play in a possible divestiture.

Table of Contents

  • 1. Synopsis
  • 2. Sensis/Foxtel merger would create new media competition
  • 3. Chisholm orchestrating the Foxtel divestiture?
    • 3.1 Foxtel not delivering the goodies
    • 3.2 Who will lead divestiture – Foxtel or the government?
    • 3.3 What’s in it for whom?
    • 3.4 The intriguing Sam Chisholm saga
  • 4. Cross platform competition
  • 5. Telstra/Foxtel threat to competition
  • 6. The fallout from the Foxtel deal
    • 6.1 Effect on competition
    • 6.2 Questions about the intent
    • 6.3 High Foxtel content costs
    • 6.4 Content providers
    • 6.5 The media players
  • 7. Crossing swords once again with Henry Ergas
    • 7.1 Vicious attack on the ACCC
    • 7.2 What do you mean – an innovative Foxtel?
    • 7.3 Market share is a good indicator of competition
    • 7.4 Ergas says pay TV is cheap in Australia – let’s ask the customers
    • 7.5 Content regulations are anti competitive
    • 7.6 Ergas ignores the end game – broadband
    • 7.7 Let’s be innovative, Professor, and combine the two HFC networks
    • 7.8 Protecting the POTS CAN
    • 7.9 Telstra vigorously and successfully lobbies for more competition in New Zealand
  • 8. Senate Inquiry into Broadband competition
  • 9. ATUG’s Opinion
    • 9.1 Lack of competition = higher consumer prices
    • 9.2 Lack of infrastructure = lack of innovation
    • 9.3 Telstra’s successfully limited Optus infrastructure developments
    • 9.4 Solution: divestiture of Telstra HFC network
    • 9.5 Advantaged outweigh disadvantages
  • 10. Related reports

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Number of pages 13

Status Archived

Last updated 1 Apr 2005
Update History

Analyst: Paul Budde

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