Foxtel calls off Telstra content deal

Nicole McCormick
08 Jul 2010
00:00
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Daily News

Australian pay TV provider Foxtel has canned its plan to offer exclusive content to Telstra broadband subscribers.

In a two-line submission, Foxtel notified the Australian Consumer and Competition Commission yesterday of its decision to shelve the content deal, effective July 9.

But it said it “still considers that the public benefits” arising from offering the proposed service “outweigh any public detriment.”

In the wake of the abandoned Telstra broadband deal, Foxtel said yesterday it would supply 30 channels to Telstra’s new internet TV service T-Box on a non-exclusive basis.

Foxtel has so far refrained from such a deal since it could damage sales of its PVR-based pay TV service iQ.

The pay TV firm is walking a delicate path in its negotiations to become a broadband content supplier as its balances its own commercial interests with a changing regulatory environment.

The looming arrival of the NBN Co. will theoretically create a level playing field in the broadband market, which could prompt the ACCC to examine whether they should follow the Singaporean example and ban exclusive content deals between content providers and pay TV operators – a prospect that would be anathema to Foxtel.

Rivals to both Foxtel, the biggest pay TV operator, and Telstra, its 50% shareholder, expressed their opposition to the exclusive Foxtel-Telstra broadband deal in submissions to the ACCC last week.

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Telstra maintained that negotiations of the commercial arrangements for the proposed service were conducted at “arm's length between Foxtel and Telstra.”

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