Oz watchdog wary of News Corp.-backed merger

SYDNEY — The merger of feevee business partners Foxtel and Austar has hit a snag with the Australian Competition and Consumer Commission (ACCC).

It’s more bad news for News Corp., which owns 25% of Foxtel.

The watchdog has warned that the deal would affect competition in three areas: national feevee provision, content acquisition and telecommunications provision in some areas.

In it’s statement of issues, the ACCC said: ”Foxtel and Austar are the only significant providers of subscription television services in Australia. The proposed merger would therefore effectively create a near monopoly subscription television provider across Australia.”

The two payboxes share the feevee market amicably, with Foxtel servicing cities and Austar regional markets and only in the northern Gold Coast market do they actually compete. However, it is the view of the watchdog that when Aussie broadband speeds increase, and the regional and city markets become saturated, Austar could turn on its partner and try to compete.

In addition to News Corp., Foxtel’s other shareholders include Consolidated Media Holdings with 25% and telco Telstra with 50%.

The decision is only preliminary and a final decision will be reached on Sept. 8.

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