Accessing the FoxtelTelstra Network: an Open and Shut Case

1
Accessing the Foxtel/Telstra Network an Open and
Shut Case

• Communications Research Strategy Forum 2005,
  Sydney

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Chronology (1) Pay Television Delivery
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Chronology (2) Access-related Events
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Chronology (3) Access-related Events
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How did the Foxtel/Telstra pay tv network achieve
closed access?

• Unrestricted business entry
• Telstra faced none of the restrictions then
  prevalent in the US and UK

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How did the Foxtel/Telstra pay tv network achieve
closed access?

• Unrestricted business entry
• Minimal competitive threat
• Telstras telephony defence neutralised Optus
  network
• Foxtel/Optus programming agreement neutralised
  Optus content
• Only broadcasters sought pay tv access, not
  Telcos, and both defeated
• No Telco or ISP ever sought cable modem access

7
How did the Foxtel/Telstra pay tv network achieve
closed access?

• Unrestricted business entry
• Minimal competitive threat
• Delayed access
• Insufficient analogue channel capacity
• Persistent legal and regulatory delays whilst
  market position consolidated, competitors wasted
  away and analogue technology replaced by digital

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How did the Foxtel/Telstra pay tv network achieve
closed access?

• Unrestricted business entry
• Minimal competitive threat
• Delayed access
• Dictated terms of access
• Arbitration prolonged until ready for access
  undertakings
• Analogue agreement useless
• Digital agreement competitively neutered
• ACCC worn down by labyrinthine process

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What political and legal opportunities were
exploited?

• Carrier Associates Direction (1995 - 1997)
• Optus subterfuge in avoiding common carrier
  obligations
• Government caught over a barrel by Optus threat
  not to invest in alternative telephony
  infrastructure
• Digital technology would alleviate capacity
  constraint by around 1997 anyway?

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What political and legal opportunities were
exploited?

• Carrier Associates Direction (1995 - 1997)
• Protected Contractual Right (1996/97 2001/2)
• Telstra and Foxtel signed Broadband Cooperation
  Agreement July 1996 lobbied new Howard
  government for protection from third party access
  gt TPA amendment
• Applicable if a contract in force as at 13
  September 1996
• All court cases based on PCR were defeated, but
  delay the prime goal

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What political and legal opportunities were
exploited?

• Carrier Associates Direction (1995 - 1997)
• Protected Contractual Right (1996/97 2001/2)
• Anticipatory Exemption (2002 2004?)
• PC government reduced regulatory uncertainty
  would foster new telecommunications investment
• Telecommunications Competition Bill Access
  providers can seek exemption from standard access
  obligations even prior to investment being made gt
  ACCC granted orders
• Seven Network appealed to Competition Tribunal
  and set aside orders

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Conclusions

• Cable television has been the most significant
  new wireline access network investment since the
  PSTN.
• Governments have never really committed to third
  party access.
• Regulatory process for access is now labyrinthine
  and wide open to gaming.
• Fibre to the Home, the next ( last) wireline
  access network, is highly likely to remain closed
  to third party access gt a monopolists dream!