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ACCC accepts the new analogue pay TV access undertakings of Foxtel/Telstra multimedia.



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Australian Competition and Consumer Commission

ACCC accepts the new analogue pay TV access undertakings of Foxtel/Telstra multimedia The Australian Competition and Consumer Commission today announced its final decision to accept new Telstra Multimedia (TMM) and Foxtel access undertakings for analogue pay TV services.

"The ACCC's decision clears the way for third party access seekers to access TMM's cable and Foxtel's set-top units (STUs) as the undertakings will govern terms and conditions of access in the absence of any other commercial agreement", ACCC Commissioner, Mr Ed Willett, said today.

"Third-party content or channel providers will now have an opportunity to provide their own programs on the existing analogue pay TV cable and will also have rights to migrate these channels to digital over time, consistent with the timing of Foxtel's own digital plans.

"Acceptance of the undertakings follows the rejection by the ACCC of earlier undertakings, submitted in late 2002, which were defective in regard to a number of terms and conditions of access. These have now been rectified in the new undertakings. The undertakings reflect a fair balance between the rights of access seekers to use the service on reasonable terms and the legitimate commercial interests of TMM and Foxtel".

The new access undertakings will have implications for the resolution of the long standing pay TV disputes between TMM and Foxtel and TARBS and C7, which the ACCC had been arbitrating. These arbitrations were put on hold pending the ACCC's assessment of the TMM and Foxtel undertakings. Any determination which may be made by the ACCC for these arbitrations must not be inconsistent with the terms and conditions laid down in the new access undertakings.

Further information please contact Mr Ed Willett - Melbourne, ACCC Commissioner, (03) 9290 1800

Ms Lin Enright, Director, Public Relations, (02) 6243 1108, (0414) 613 520

Release # MR 045/04 Issued: 25th March 2004

Links The decision will be available from "Revised analogue pay TV access undertakings" by COB 25/03/04 - http://www.accc.gov.au/content/index.phtml/tag/RevisedAnaloguePayTVAccess

Undertakings

Background

In March 2002, Foxtel and Optus announced their intention to enter into a content supply arrangement. The ACCC concluded that, if given effect, the arrangement would breach the competition provisions of the Trade Practices Act 1974. To address these competition concerns, various parties provided the ACCC with undertakings, pursuant to section 87B of the Act. These undertakings included a commitment by Foxtel and TMM to provide service providers with access to the analogue pay TV carriage service and set top units (STUs) through the provision of separate Part XIC access undertakings The analogue pay TV undertakings provide third parties with the opportunity to deliver analogue pay TV services in competition with Foxtel and Optus using the Telstra/ Foxtel analogue pay TV networks.

As part of their section 87B undertakings, Telstra and Foxtel submitted proposed access undertakings for the analogue pay TV network in November 2002.

The ACCC rejected the November 2002 undertakings in December 2003, largely because it had concerns with the then proposed charge for access to Foxtel's analogue STUs, which it considered was excessive, and because it believed that some of the non-price elements of both access undertakings should be further strengthened to promote more effective and timely terms and conditions of access.

TMM and Foxtel lodged new undertakings in late December 2003, including amendments to clauses which it considered addressed the previous concerns of the ACCC, expressed in relation to the rejected (November 2002) undertakings.

In assessing access undertakings, the ACCC is required to satisfy itself that:

the undertakings are consistent with the standard access obligations (SAOs) outlined in the Act the terms and conditions of access are "reasonable", as defined in the Act.

The new undertakings are now considered reasonable by the ACCC as a result of changes to previously problematic terms and conditions. In relation to consistency with the SAOs, the ACCC has determined that, as this test had been met by the previous

undertakings, and the new undertakings had made no changes to these clauses, the new undertakings also satisfies this condition.