High Court rejects challenge to ACCC pay TV declaration

The decision today by the High Court of Australia to reject an application by Foxtel for special leave to appeal the decision of the Full Federal Court upholding the validity of the ACCC's pay TV service declaration has been welcomed by the Australian Competiton and Consumer Commission.

"The ACCC was always very confident that its decision to regulate access to cable networks for analogue pay TV services was totally correct and would withstand any challenge", ACCC Chairman, Professor Allan Fels, said today. "It is pleased and not surprised that the High Court does not consider there are grounds for further judicial consideration of this matter. The will of Parliament and its expression in the law has always been quite clear".

The application seeking leave to appeal follows a decision by the Full Federal Court in August last year that found that the ACCC's 1999 decision to declare the Analogue Subscription Television Broadcast Carriage Service was valid. Telstra and Foxtel had challenged the validity of the declaration

"The declaration of this service is particularly important for the development of competition in the market for pay-TV services, as it helps allow a range of alternative content providers to offer their services to consumers over Telstra’s cable network", Professor Fels said. "This decision by the High Court upholds the ACCC's decision that declaration of this service is in the long-term interests of consumers of pay-TV services.

"The ACCC trusts this decision will bring Telstra and Foxtel’s resistance to this declaration to an end. It is now time for both parties to facilitate the use by others of the Telstra cable to offer pay-TV services that are in competition with Foxtel", Professor Fels said. "The issues concerning the validity of the ACCC's declaration decision have been before the courts for almost two years as Telstra and Foxtel have challenged the ACCC's decision using every legal avenue available. This has created much uncertainty in the industry and frustrated the development of competition".

"This decision means that, subject to capacity being available, Telstra must provide access to its HFC network to access seekers for the supply of analogue pay-TV services. This will assist alternative content providers, such as Television and Radio Broadcasting Services Australia Pty Ltd (TARBS) and Seven Cable (C7), who have requested access to Telstra’s cable network to obtain access either on negotiated terms, or failing agreement, on the terms and conditions determined by the ACCC in an arbitration.

"Indeed both these alternative content providers have notified the ACCC of a dispute.

"Although these arbitrations have been delayed as a consequence of proceedings before the courts the ACCC has issued interim determinations requiring that both C7 and TARBS be given access and, in the absence of agreement by the parties, the ACCC will be looking to finalise its decision on access by TARBS and C7 to Telstra’s cable.

"The ACCC also notes the emergence of digital pay-TV services that are likely to provide a broad ranges of services and enhanced functionality for consumers of pay-TV services", Professor Fels said . "The ACCC has made no decision on declaration of these services and has made clear that the issues are likely to be different from those considered in an analogue environment.

"In the ACCC's view, so far as it has been developed at this stage, regulation of other digital platforms will only be likely to be needed to be considered where commercial forces are being deliberately undermined and where the objective of an open access environment is being stifled. Legitimate market drivers should be given the opportunity to do their job".

Background

Part XIC of the Trade Practices Act 1974 sets out a telecommunications access regime. If a carriage service is declared, a provider of that service must supply that service to an access seeker subject to certain exceptions. In June 1997, the ACCC deemed a 'Broadcasting Access Service' to be a declared service for the purposes of Part XIC ('the Deeming Statement'). [The ACCC was required to deem this service under section 39 of the Telecommunications (Transitional Provisions and Consequential Amendments) Act 1997].

In addition, in September 1999, the ACCC declared an Analogue Subscription Television Broadcast Carriage Service to be a declared service for the purposes of Part XIC . Both declarations apply to Telstra and Optus' cable networks. Seven Cable Television Pty Limited and Television and Radio Broadcasting Services Australia Pty Ltd (TARBS) have requested access from Telstra to these services.

While the ACCC's declarations apply to analogue services provided over cable networks, the ACCC continues to monitor developments in digital services, including broadcasting, to assess whether declaration of a broad-band cable service is appropriate at some future point.