The battle to control content delivery to a new generation of Smart TVs is set to intensify today with the Australian Competition and Consumer Commission set to spell out conditions for the $1.9 billion dollar Foxtel Austar merger later today.
The approval if given will create a massive pay TV monopoly with Foxtel gaining access to 97% of the pay TV market.
Foxtel who has one of the most expensive pay TV services in the world due to their monopoly in the Australian market has been told by the ACCC that to get their approval they have to share some of their content with other IPTV operators who are trying to enter the Australian pay TV market.
The shared Foxtel content will not include prime time content delivered by Fox Sports, instead competing ISPs will be offered content from the likes of ESPN, Setanta and Sky Racing which has poor ratings among main stream consumers.
The ACCC appear to have caved in to the demands of Foxtel after intensive lobbying by the owners of the pay TV operator which include Telstra who own 50% of the Company, the Rupert Murdoch owned News Limited and the James Packer-controlled Consolidated Media Holdings.
Later today the ACCC, who are currently probing the Coles-Woolworths monopoly in the food retailing market, is set to issue a 19 page report of detailed undertakings that Foxtel and Austar have agreed to in an effort to get the deal through the Australian regulator.
The Australian newspaper which is owned by one of the Foxtel owners said the undertakings will be subjected to market comment over the next couple of weeks but essentially will dictate how Foxtel will share non-exclusive content such as international movies, lifestyle shows and other programs with rival internet service providers.
SmartHouse believes content from the highly popular Lifestyle channel will not be shared with other ISPs, however Telstra may get access to the content for their T Box service.
The Australian said that the ACCC will attempt to provide some carve-outs to allow for any radical changes in technology, with the ACCC keen to ensure the merger does not enhance Telstra’s strength or create high barriers to entry.
Ironically content from the James Packer Consolidated Media Holdings and Rupert Murdoch’s News Limited owned Fox Sports network does not make up any of the content that has to be shared.