Telstra will be able to bundle Austar’s pay TV service with Telstra's telecommunications services, the Australian Competition and Consumer Commission announced today.
"The decision means the Telstra Corporation-owned Telstra Pay TV can provide Austar pay TV services at a discount to retail residential customers who also get telecommunications services from Telstra Corporation", ACCC Chairman, Mr Graeme Samuel, said today.
"The conduct is limited to the areas that Austar currently supplies - rural and regional Australia, Hobart and Darwin.
"The ACCC found the public benefits of allowing Telstra to bundle the services were likely to outweigh the public detriment.
"The decision is consistent with the ACCC's November 2002 decision to allow Telstra to bundle Foxtel's pay TV services in the areas that Foxtel supplies.
"The ACCC expects the proposed bundling will enhance competition by providing consumers with an alternative supplier of Austar’s pay TV service and by facilitating price competition.
"The public is also served as the increased competition from Telstra bundling should increase the penetration rates of pay TV and thus improve the long-term viability of the industry".
Mr Samuel said the majority of market participants consulted about the proposal did not believe the public benefits outweighed the detriment. In particular, it was argued that the conduct would stifle the development of alternative telecommunications infrastructure in rural and regional areas.
"The ACCC gave these comments serious consideration. It undertook further analysis by talking to infrastructure providers and merchant banks to determine the extent investment in new networks may be directly harmed by the bundling. However, the ACCC did not believe it was sufficiently clear that the conduct would have such an impact such that it should be stopped".