The Australian Competition and Consumer Commission will not oppose the proposed acquisition of Austar United Communications Limited by Foxtel Management Pty Limited after accepting court-enforceable undertakings from Foxtel.

The undertakings will prevent Foxtel from acquiring exclusive internet protocol television (IPTV) rights for a range of attractive television 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.

• 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.

• 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 50per cent of the eight specified

independent movie studios.

• SVOD 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 undertaking further prohibits Foxtel from exclusively acquiring any movie delivered on a Transactional Video on Demand  basis.

Importantly, the undertaking also prevents Foxtel from acquiring exclusive mobile rights to the content referred to above where those rights are sought by competitors to combine with IPTV rights. This means that those competitors will have the opportunity to deliver a seamless and integrated package of programming across a number of devices.

The ACCC’s main areas of concern with the proposed acquisition were in the national market for the retail supply of subscription television services, particularly in relation to the developing IPTV field, and a number of regional markets for the supply of fixed broadband and fixed voice telephony products.

The concerns in regional markets for fixed broadband and telephony markets arise because of Telstra’s 50 per cent ownership of Foxtel and Telstra’s ability post merger to acquire preferential access to Austar’s existing subscriber base in combination with its existing content delivery infrastructure in regional areas. This will allow Telstra to offer a superior “triple play” of fixed voice, broadband and IPTV services.

“The proposed acquisition would bring together the two main subscription TV industry players in Australia each with a substantial customer base and significant access to key content. This would in turn give Telstra, Foxtel’s largest shareholder, greater market power in regional fixed broadband and telephony markets,” ACCC chairman Rod Sims said. “By reducing content exclusivity, the undertakings will lower barriers to entry and promote new and effective competition in metropolitan and regional telecommunications and subscription television markets.”

“Taking into account the undertaking which has been offered by FOXTEL, the ACCC is satisfied that the proposed acquisition is unlikely to substantially lessen competition.”