The Australian Competition and Consumer Commission today issued a discussion paper on applications lodged by Telstra and Foxtel to be exempt from access regulation of digital pay TV services, should Telstra and Foxtel digitise their pay TV networks.
"The parties have requested this exemption on the basis that, prior to undertaking the investment that would be necessary to digitise their pay TV networks, they require certainty about the terms and conditions upon which access to these networks may be granted to third parties", ACCC Commissioner responsible for telecommunications, Mr Ross Jones, said today.
Foxtel and Telstra have already provided court-enforceable undertakings on access for competing pay TV operators to Telstra's digital HFC network and Foxtel's digital satellite and cable set-top units. The undertakings were provided last year to meet the ACCC's competition concerns about the Foxtel-Optus content supply arrangements.
"Whilst it is an exemption application, the parties are relying on their access undertakings in making these applications", Mr Jones said. "The ACCC will need to consider whether the exemption and access undertakings promote competition in pay TV markets and promote efficient investment.
"The digitisation of these networks represents a significant increase in the capacity available on these networks and a corresponding ability to deliver not only a wider range of traditional pay TV services to consumers, but an opportunity to offer new services".
Under the Trade Practices Act 1974, the ACCC must make an exemption order (with or without conditions) or refuse the application. The parties have requested an exemption order that would operate until 2015. If exemption orders are granted as requested by Foxtel and Telstra, the companies have undertaken to commence supplying digital subscription TV services within 12 months from the exemptions being granted (but not earlier than 23 October 2003).
"The ACCC will assess the exemption applications in an open public process. All available information will be taken into account, including relevant material provided in the assessment of Telstra's and Foxtel's previous undertakings".
The ACCC has already begun assessing undertakings offered by Foxtel and Telstra on access to analogue pay TV services provided on Telstra's HFC network.
Copies of the undertakings together with the discussion paper are available on the ACCC telecommunications website. The ACCC invites submissions on any aspect of the undertakings. Also on the website are submissions from Telstra and Foxtel in support of their undertakings.
The ACCC seeks comments on the exemption applications by Friday 28 February 2003. It is expected that the ACCC will issue a draft report in May 2003 with a final report issued in July 2003.