Feeds

Oz regulator punctures Foxtel takeover bid

If it looks like a monopoly and quacks like a monopoly...

Internet Security Threat Report 2014

Foxtel’s ambition to create a subscription TV monopoly with the $1.9bn takeover of rival Austar has been significantly dampened by the competition regulator.

On Friday the Australian Competition and Consumer Commission (ACCC) released its ‘Statement of Issues’ on the takeover which provides the regulator’s preliminary views.

The ACCC found that the proposed acquisition is likely to result in a "substantial lessening of competition" in the national market for the supply of subscription television services; the national market for the acquisition of audio visual content; and a number of markets for the supply of telecommunications products.

The report stated that as Foxtel and Austar are the only significant providers of subscription television services in Australia, the proposed merger “would therefore effectively create a near monopoly subscription television provider across Australia.”

It added that the advent of the NBN (National Broadband Network) would most likely create industry changes that “will substantially increase the ability and incentive for Foxtel and Austar to compete with one another outside of their existing distribution regions. The proposed acquisition would prevent any such competition from occurring.”

It also found that Telstra, via its 50 per cent shareholding in Foxtel, “is likely to be able to leverage its relationship with Foxtel and consequently Foxtel’s position in the national market for the supply of subscription television services, to the detriment of competition in telecommunications markets.” Rupert Murdoch's News Corp and Consolidated Media Holdings each own 25 per cent of Foxtel.

Austar said it would “continue to work with the ACCC to resolve issues identified as a result of market inquiries. Austar remains committed to effecting the transaction and will continue to cooperate fully with all relevant government authorities and regulators.”

Foxtel is considering taking legal action, according to The Australian.

Foxtel CEO Kim Williams told the newspaper, "while the ACCC has raised some high-level issues, it provides limited evidence to back up some of its assertions. On this basis we believe Foxtel/Austar would be well positioned to have some success should it ultimately choose to take the ACCC to court, although we would still see a negotiated outcome as preferable for all parties and is therefore still more likely."

The ACCC will publish it its final determination by 8 September after receiving submissions from market participants on each of the issues identified in this Statement of Issues. The ACCC is calling for industry submissions by 11 August. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.