The people of the ACT should be especially concerned about the pay television deal struck between Foxtel and Optus. Subscribers to either service will now get access to the content of the other. Essentially, it makes Foxtel the monopoly provider of content for pay television. Foxtel is partly owned by Telstra. The Foxtel cable and satellite delivery network reaches 70 per cent of Australian households. Optus is happy with the deal because it can bundle some worthwhile pay television content with telephony packages to attract custom, and it is relieved of the burden of long-term commitments to paying for choice Hollywood content at very high prices. Telstra and Foxtel, too, can bundle telephony and pay television content to attract custom.
So where does that leave TransACT, the ACT cable network that is being rolled out using Actew’s access to the electricity easements and poles that reach every household in the ACT? TransACT has huge advantages on the hardware-infrastructure side. And under federal law it has access to the Telstra telephony network so it can provide telephony services at competitive prices.
Also under federal pay television content providers can get access to Foxtel’s cable network.
The critical question for TransACT, however, runs in the other direction. As a cable network can it force content providers to supply content to its customers at a reasonable price? There seems to be no special federal telecommunications law to provide an answer. TransACT will have to rely on the good grace of Foxtel (don’t hold your breath); or rely on ordinary Trade Practices Act requirements (expect a legal brawl); or rely on the Federal Government getting some new law through Parliament to ensure that ACT’s TransACT customers get access to Foxtel-Optus content deals at reasonable prices (that will take some time).
Some encouraging noises have been made by Communications Minister Richard Alston. Senator Alston said he was concerned that carriers like TransACT would get access to Foxtel content for its customers. But that concern has to be translated into action. Hitherto, TransACT has not had access to Foxtel. With its new monopoly there will be political and legal pressure for it to supply, but unless that happens quickly, Foxtel will have a big market advantage in offering ACT customers its bundled telephony and pay television services. And it will target the ACT precisely because there is a competitive infrastructure provider.
Meantime, other parts of Australia have no pay television at all. It indicates that the Government should never have allowed any company to be both a content provider and a network owner.
How the Government deals with the ACT situation will be a major test of its telecommunications and television credentials.