A settlement which will see the emergence of a second commercial television station in Darwin and an assured supply of television programs for a new licensee in regional Western Australia has been reached between the Australian Competition and Consumer Commission, Seven Network Limited and Golden West Network Pty Limited.
The settlement is in relation to Federal Court proceedings brought by the ACCC against Seven, the Nine Network, Golden West Network and others on 24 October 1996.
The proceedings relate to the entry into two long-term exclusive program supply agreements:
an agreement between Territory Television (a Nine subsidiary and the operator of the sole commercial television station in Darwin) and Amalgamated Television Services (a Seven subsidiary) for the exclusive supply of Seven programming to Territory Television an agreement between Golden West (the operator of the sole commercial television stations in regional WA) and Nine for the exclusive supply of Nine programming to Golden West
The ACCC alleged that these exclusive agreements had been entered into as part of an overall market-sharing agreement between Seven and Nine not to pursue their interest in acquiring a second commercial television licence for Darwin and for regional WA respectively.
The ACCC alleged that the purpose and likely effect of these three agreements was to hinder or prevent potential entrants from acquiring any second commercial television licences for Darwin and for regional WA, and that the agreements breached provisions of the Trade Practices Act dealing with exclusive dealing and arrangements affecting competition.
Following the institution of proceedings, Seven terminated its exclusive program supply agreement with Territory Television. Since the termination of that agreement, Telecasters Australia Limited (a Network Ten affiliate in regional Qld and northern NSW) successfully bid for and acquired the second commercial television licence in Darwin.
Seven and Telecasters have now entered into a program supply agreement which will provide for the exclusive supply of Seven programs to Telecasters for its Darwin operations, which are expected to commence in April this year.
It is anticipated that a new commercial television broadcasting licence will be issued for remote and regional WA following the recent announcement by the Australian Broadcasting Authority that it has invited applications for such a licence by 26 February 1998. The licence area of the new service will cover the same area as that covered by Golden West.
Seven has undertaken to the ACCC to supply to the new licensee for regional WA all or some of its programs as the new licensee requests (except for those programs it is legally contracted to Golden West to supply on a short-term basis). For its part, Golden West has undertaken that it will not interfere with or frustrate the performance of Sevens undertaking to supply the new licensee. Golden West has also undertaken that it will not object to Nine supplying its programs to the new licensee if Golden West does not intend to broadcast those programs itself. Seven has confirmed to the ACCC that Golden West does not have any long-term rights over significant Seven programs which would be likely to be needed by a new licensee to compete against Golden West.
On this basis, the ACCC has agreed to the discontinuance of the Federal Court proceedings against Seven and related parties and against Golden West and related parties.
The ACCC has written to Seven and stated that, in light of the undertakings provided by and the cooperation of Seven and Golden West, the ACCC will not subsequently institute or maintain any proceedings against Seven or Golden West in relation to the subject matter of the proceedings.
Seven and Golden West in their defences to the proceedings deny the allegations made by the ACCC. Seven and Golden West provided the undertakings to the ACCC, and Seven agreed (at the request of the ACCC) to terminate the program supply agreement with Territory Television in Darwin, in order to facilitate the resolution of the proceedings and the achievement by the ACCC of its stated objectives. The undertakings and agreement were without prejudice to Sevens and Golden Wests denial of liability.
ACCC Chairman, Professor Allan Fels, said the signing of the program supply agreement between Telecasters and Seven will greatly benefit Darwin television viewers and advertisers who will now have a choice of commercial channels and television advertising outlets. There will be similar benefits for viewers and advertisers in regional WA.
"The undertaking by Seven in relation to program supply in regional WA is also a positive move in facilitating the entry of a second commercial television station into the regional WA television markets," he said.
Professor Fels said that Sevens cooperation in terminating the exclusive program deal in Darwin, subsequently entering into a new deal with Telecasters in Darwin and now undertaking to supply the new licensee with Seven programs in regional WA should go a long way to fostering competition in both the Darwin and regional WA markets.
The settlement with Seven and Golden West follows an earlier settlement with the Nine Network. In the settlement with Nine, Nine undertook to terminate its program supply agreement with Seven in Darwin, thus facilitating the pro-competitive outcome in Darwin which has been achieved by the signing of the Seven and Telecasters program supply agreement.
Nine also undertook at the time to terminate its exclusive program supply agreement with Golden West, if Golden West consented, and then to offer to supply Nine programs to the regional WA market on reasonable non-discriminatory commercial terms.
"However, the settlement with Seven and Golden West makes it unnecessary for the ACCC to press for the termination of that agreement in the interests of promoting competition in regional WA," he said.
