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NEW ROLE FOR AUSTAR
SYDNEY
Austar United Communications has reached agreements with FOXTEL
and Optus, subject to board approvals and any necessary regulatory
consents, which will see Austar become a customer of FOXTEL’s satellite
platform and Austar and FOXTEL will cooperate in content creation.
It will also ensure that Austar customers will obtain access to
any new services FOXTEL develops, including near video on demand
(NVOD), interactive TV services and new channels.
The agreements will ensure that regional and rural consumers have
access to the subscription television services equal to or superior
to that offered in the major capital cities.
The key terms of the conditional agreements to be entered into with
FOXTEL and Optus, provide for:
- dissolution of the existing satellite joint venture between
Austar and Optus;
- Austar to migrate satellite services to a new satellite platform,
with no disruption to service;
- Austar’s consent to be given for distribution of XYZ programming
to Optus and Telstra;
- options to renew current programming arrangements for FOXTEL
related channels in Austar territories;
- Austar to be able to sublicense programming to telecommunications
providers which wish to bundle pay TV services or to infrastructure
operators within Austar’s service area; and
- Austar to be given access to any new services developed or
acquired by FOXTEL, including near video on demand (NVOD) offerings.
“These proposed agreements will provide tremendous long term benefits
to Austar and to consumers in regional Australia,” said John Porter,
Chief Executive of Austar. “First, they allow us to obtain any of
the upside which will flow from industry rationalisation. This should
result in greater stability and, in time, a lower cost base.
“Secondly, there will be tangible benefits for Austar, such as increased
revenue generated by XYZ, access to new services and satellite carriage
arrangements which are financially favourable.
“Thirdly, Austar customers will continue to receive all of the premium
programming available in Australia and potentially a whole lot more.
The launch of the C1 satellite, which these arrangements help to
secure, will see satellite coverage extended to areas such as Tasmania
and North Queensland, which currently are beyond range,” said Mr
Porter. “We expect this to add about 200,000 homes to our service
area, many of these in places where decent free to air reception
is unavailable.”
Austar does not believe that anything in the proposed agreements
would breach the Trade Practices Act. However, it has decided to
offer voluntary draft undertakings pursuant to section 87B of the
Act to provide its content to infrastructure providers within it
territories. This undertaking has been supplied to the ACCC and
Austar is happy for the Commission to seek public comment on it.
The undertaking is similar to one given by FOXTEL, ensuring the
competitive benefits of that arrangement are passed on to regional
Australia.
“Our proposal to provide content to infrastructure providers will
ensure that companies which, like Austar, are willing to invest
substantial sums in regional Australia will have access to content
in a convenient form,” said Mr Porter.
“This will stimulate competition across a range of services, including
telephony and broadband data.”
In summary, the draft undertakings provide that:
- subject to programming rights, Austar will offer the full package
of Austar programming to an infrastructure provider who has network
which passes at least 8,000 homes;
- content would be delivered to a head end and then the infrastructure
provider would be responsible for delivery to its customers;
- pricing would be based on a retail minus model.
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