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15 March, 2002 Prof. Allan Fels BY FACSIMILE: (02) 6243 1199 Dear Professor Fels, It appears from the publicly available information that the agreements between Foxtel, Optus and Telstra create new monopolies, or at least a very material lessening in competition in cable broadband network (the physical cable network itself, including set top boxes), in cable television programming content and customer management systems, and in the bundling of related telecommunications, broadband and internet services. Based on media reports regarding the proposed agreements, we believe that ACCC approval, if it is given, should be contingent on at least the following three broad conditions: 1. Third parties, (including Fairfax) obtaining a guaranteed right of access, at marginal or incremental cost, to carriage of content on the cable, including access to the cable networks’ customer management systems and set top boxes and to basic and premium content bundling tiers on appropriate terms. 2. Third parties (including Fairfax) obtaining the right of access to content available on Foxtel and Optus. For example, Fairfax may wish to bundle subscriptions to our newspapers, or other services, with pay television subscriptions. In order to promote competition in Pay TV offerings, third parties should have access to Foxtel/Optus programming bundles with the ability to sell separate tiers, or subsets, of the menus of Foxtel and Optus content. 3. Telstra and Optus being required to provide non-discriminatory access to unaffiliated Internet Service Providers (ISPs) on the cable network and non-discriminatory treatment to internet networks and services, such as those we offer through f2, that are unaffiliated with Telstra/Foxtel and SingTel/OptusVision. Similar conditions were imposed by the United States Federal Communications Commission last year in its approval of the merger of AOL and Time Warner, and are expected to be imposed with respect to the pending acquisition of AT&T Broadband by Comcast. We believe that these conditions would further competition and diversity in the in interests of consumers and competitors alike. Given the historical difficulties in establishing rules regarding access and non discriminatory treatment to cable networks, programming and customer management systems, we urge the ACCC to be as definitive as possible in setting terms and conditions that will apply to the provision of such access and non discriminatory treatment. We would be pleased to discuss our views with your staff as the ACCC proceeds in its review of this matter. Yours sincerely, |
