Cable owners put on notice

Cable network owners Telstra and Cable & Wireless Optus were today urged by Australian Competition and Consumer Commission Chairman, Professor Allan Fels, to develop open access arrangements for digital services or face possible regulation.

Professor Fels was delivering the Australian Telecoms Cisco Lecture in Sydney this evening (26/3).

"Broadband networks, including hybrid fibre coaxial (HFC) and satellite networks, will be the means by which a whole range of high-quality digital broadcasting, telecommunications, data and video services will be delivered to Australians in the future", Professor Fels said. "Both Telstra and C&W Optus are reported to be planning to digitise their existing networks later this year.

"However, potential suppliers of retail programming need to have access to the networks if competition is to develop in digital service provision and diverse service choices are to be made available to consumers".

Access to HFC cable networks for the delivery of analogue pay TV services was mandated by the ACCC in 1999. However, at that time there was considerable uncertainty about the emerging digital environment and the ACCC decided that, rather than mandating access to the networks at that time for the delivery of digital services, it would keep the question under review.

"It is clearly in the interests of both suppliers of retail services and customers for broadband networks to be open rather than closed", Professor Fels said. "This means that access to the network should be available to suppliers on non-discriminatory terms and conditions. An open access environment ensures the competitive provision of services and can also mean a more efficient and effective use of broadband networks".

Professor Fels said that the question was whether this would occur through competition among network owners.

"Regulation of digital platforms will only need to be considered where commercial forces are being deliberately undermined and where the objective of an open access environment is being stifled", he said. "Legitimate market drivers should be given the opportunity to do their job".

However, Professor Fels pointed to the experience of pay TV suppliers attempting to gain access to cables controlled by Telstra and Foxtel.

"Telstra and Foxtel have frustrated every effort to open up access to competitors", he said. "They have engaged in a lengthy campaign to prevent access to competing pay TV providers and slow down the processes. They are clearly both able and willing to devote considerable energy and resources to such activities.

"Digital platform owners therefore have a choice. They can take the early initiative in opening up their networks for digital services, and create significant opportunities and benefits for themselves and their customers. Alternatively, they can take the regressive step of maintaining closed shops - and then face the inevitable demands from potential retail competitors, governments and customers for regulatory intervention".