ACCC should reject the proposed Foxtel deal

1
ACCC should reject the proposed Foxtel deal

• The agreements create monopolies or substantially
  lessen actual and potential competition in key
  markets
• The behaviour of the incumbents raises serious
  concerns as to how such monopoly power will be
  used in the future
• The agreements generate no public benefit that
  offsets the lessening of competition

2
The agreements create monopolies or substantially
lessen actual and potential competition in key
markets

• Competition between Foxtel and Optus is ended
• Consumers suffer from
• Disappearance of todays price competition
  (differential for basic of 25 to 60) leading
  to higher prices
• A reduction in range of content
• Absence of any commitment to digitise the system
• Content suppliers suffer from
• A reduction in range of content acquired
• A reduction in the number of parties acquiring
  content
• Monopoly pricing by Foxtel
• The absence of a meaningful access regime to
  analogue or digital
• The absence of any commitment to digitise the
  network

3
The behaviour of the incumbent raises
seriousconcerns as to how such monopoly
powerwill be used in the future

• Foxtel has a history of non-negotiation on access
• Foxtel appears to discriminate against content
  suppliers who compete in Australia with News Corp
  and/or PBL
• News Corp has tried to use its market power in
  Pay TV against competitors in other industries
• Foxtel asserts and uses capacity constraints to
  minimise opportunity for third parties to supply
  content

4
The agreements generate no public benefit that
offsets the lessening of competition

• Digitising the cable network
• No commitment to digitise
• No timetable
• No commitment of capital expenditure
• No guarantee of access, even if cable is
  digitised
• The market can resolve any decision by Foxtel
  and/or SingTel to exit the Pay TV or telephony
  business
• There is no failing firm argument that
  justifies the creation of such a monopoly

5
Conclusion the ACCC should reject this deal

• The mistake of uneconomic content supply
  contracts should not be the award of a monopoly
• Approval of this deal would create an
  anti-competitive industry structure
• The market is working today. If competition
  fails, and a monopoly emerges, it can be dealt
  with at that time by the ACCC