Telstra's Nine hopes put content in spotlight

Telstra is thinking about purchasing the Nine Network, and is currently going over the numbers with an investment bank advisor, according to The Australian. Does this put the cat among the pigeons for the competition watchdog?

The Australian Competition and Consumer Commission (ACCC) has been very busy in the content area, having to investigate Foxtel's acquisition of Austar. It finally decided that the deal could go through, after seeking and obtaining Foxtel's agreement to a number of conditions saying that it wouldn't keep certain content to itself in exclusive deals.

Telstra actually owns 50 per cent of Foxtel, which would make any acquisition of the Nine Network a concerning prospect.

Optus CEO Paul O'Sullivan has often pointed out that telecommunications is going to be a content game (PDF), and has spent a lot of time worrying that big providers will lock away access to that content, barring the way for anyone else. After all, once everyone is using NBN Co's pipes, differentiation is going to be key.

Telstra will have a lot of cash from its deal from NBN Co — that is, if it isn't altered by the Coalition, which seems likely to come into power at the next election.

Optus' parent SingTel has recognised the importance of going on the attack in this sense, with its recent restructure set to make sure that the telco doesn't lose ground to content players.

iiNet, meanwhile, has been busy pushing Fetch TV, which it and a number of other smaller telcos offer as a content package. It was one of the most vocal parties making submissions on the Austar-Foxtel deal.

iiNet was disappointed that the ACCC let the deal go through. "Now you've got Telstra, with its 50 per cent ownership of this merged entity — it's going to be able to dominate the bundled TV and broadband sector, with offers in the regions that nobody is going to be able to match, because no one's got the infrastructure in the country to be able to deliver the content you will get on Foxtel and Austar merged together," iiNet chief regulatory officer Steve Dalby said.

If Telstra is allowed to buy Nine, this effect could be exacerbated.

Luckily, it seems that the ACCC is very aware of these issues. Chairman Rod Sims told The Australian that the ACCC would have to look into forcing Telstra to sell its Foxtel stake if it decides to buy Nine.

It has also previously said that it has its eye on content providers trying to enter the telco space to take customers away from traditional providers.

Let's hope that its attention doesn't wander on the issue. In a world where infrastructure is standard, content is indeed king.

Via ZDNet.com.au



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