April 11, 2012

It’s uncertain what immediate effect the acquisition of regional pay-TV provider Austar by Foxtel will have on local subscribers however new ways of watching TV in the future look to be protected by the deal, which was approved yesterday.

In July 2011, Austar announced it had reached an agreement for Foxtel to take over Austar in a $2.5 billion deal however the Australian Competition and Consumer Commission delayed the proposal saying it was concerned it could create a near-monopoly.

The ACCC announced yesterday that it would now not oppose the proposed acquisition after accepting court-enforceable undertakings from Foxtel.

These undertakings have forced Foxtel to accept conditions which could encourage future competition from new content delivery systems such as “internet protocol television” (IPTV) which allows viewers to watch TV programs and films on demand over the web.

Austar said the proposed acquisition was an “exciting time” because bringing the two businesses together was likely to bring a number of benefits. It expects Foxtel to formally take ownership of Austar in late May.

“Until that time, it is business as usual for us. You can just sit back and relax and continue to enjoy your Austar service,” according to the company’s website.

The undertakings prevent Foxtel from acquiring exclusive IPTV rights for a range of attractive TV program and movie content, including:

  • Linear channels supplied by independent content suppliers, including more than 60 linear channels that are currently broadcast by Foxtel and many more that are broadcast internationally

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  • Subscription Video on Demand rights to current or past seasons of television programs that form part of a linear channel supplied by an independent content supplier

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  • Movie linear channels (or movies for inclusion in a linear channel) from more than 50 per cent of the eight major movie studios or more than 50 per cent of the eight specified independent movie studios

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  • Subscription Video on Demand rights to movies, except for an 18 month window in relation to the movie studios from which Foxtel is not prohibited from acquiring exclusive linear rights.The undertakings also prohibit Foxtel from exclusively acquiring any movie delivered on a Transactional Video on Demand basis.

Read more on the ACCC website