FOXTEL has dropped a controversial application to use Telstra's BigPond as the exclusive conduit for a new internet download service. It has done so in favour of negotiations which could see its content be made available on the telecom's T-Box entertainment console - a service previously touted as a potential Foxtel rival.
"Foxtel is working with Telstra to provide Foxtel content on Telstra's T-Box with the intention of providing a comparable offering of channels as we will offer via [Microsoft's] Xbox, which is up to 30 channels," the pay TV provider said yesterday in a statement.
"In view of this fact, and rapidly changing market conditions, we have decided to withdraw our application to the [Australian Competition and Consumer Commission] seeking approval to provide Foxtel through BigPond directly to your television set via Foxtel's broadband-enabled iQ boxes."
The offering of a web-based service over rival consoles saves Foxtel the costs of connecting its service to users and the provision of its iQ console. It also gives Foxtel access to a wider audience.
"We think there's great potential. Foxtel already provides content on Xbox, so we think there's great opportunity for both Foxtel and T-Box," Telstra's chief executive, David Thodey, said at the launch of T-Box this week.
A Foxtel spokesman confirmed that the original proposal, to offer downloadable content to its subscribers via the internet, will now potentially be available to all broadband providers, not just Telstra BigPond.
The about-face came just days after the pay TV provider made a submission to the ACCC defending the exclusive deal with Telstra.
Foxtel said on Friday it "still considers the public benefits arising ... in offering the proposed service outweigh any public detriment". According to Telstra's rivals, the original deal only served to help Telstra snatch broadband market share by anti-competitive means.
It was not the only announcement signalling how the tectonic plates continue to shift in the telecom, broadcast and tech industries.
The Foxtel rival Fetch TV became available through iiNet this week, while the regional pay TV provider Austar launched its own online content download service yesterday.
The service, offering downloads to customers' home PCs at no extra cost, appears similar to the one Foxtel wanted to offer exclusively through Telstra, but it is not tied to any particular broadband provider.
Austar AnyWhere featured 38 channels including sports content, the company said.
"We look forward to the [national broadband network] becoming a reality so we can provide an even greater range of innovative services for our subscribers," said Austar's chief executive, John Porter.
Frequently Asked Questions about this Article…
Why did Foxtel withdraw its application to use Telstra's BigPond as the exclusive conduit for its internet download service?
Foxtel withdrew the application to the ACCC because it is negotiating with Telstra to make Foxtel content available on Telstra's T-Box console. Foxtel said changing market conditions and those negotiations made the exclusive BigPond proposal unnecessary.
What does the proposed Foxtel–T-Box arrangement mean for subscribers and channel availability?
Foxtel said it is working with Telstra to provide a comparable offering on T-Box to what it offers via Xbox — up to 30 channels — which suggests subscribers could access many Foxtel channels through Telstra's entertainment console.
How could a web-based Foxtel service on consoles affect Foxtel's costs and audience reach?
Delivering Foxtel as a web-based service on consoles like Xbox or T-Box saves Foxtel the expense of producing and supplying its own iQ set-top boxes, while also giving Foxtel access to a wider audience through existing console users.
Were there competition concerns about Foxtel's original exclusive deal with Telstra and BigPond?
Yes. Rivals argued the original proposal could be anti-competitive and mainly help Telstra gain broadband market share. Foxtel had submitted to the ACCC that the public benefits of the proposed exclusive service outweighed any detriment before withdrawing the application.
Will Foxtel's downloadable content now be restricted to Telstra BigPond customers?
Foxtel indicated the downloadable content proposal could potentially be made available to all broadband providers, not just Telstra BigPond, after withdrawing the exclusive application.
What are some competitor moves in online TV and download services mentioned in the article?
Fetch TV became available through iiNet, and regional pay TV provider Austar launched its Austar AnyWhere online download service offering 38 channels (including sports) to customers' home PCs at no extra cost. Both services are not tied exclusively to a single broadband provider.
How might the national broadband network (NBN) influence these online TV services?
Austar's CEO said the NBN becoming a reality would allow providers to offer an even greater range of innovative services to subscribers, implying better broadband infrastructure could expand online TV and download service capabilities.
What does this Foxtel–Telstra development mean for everyday investors watching media and telecom stocks?
The move highlights shifting distribution strategies in pay TV and telecoms: content providers like Foxtel are exploring web-based delivery via consoles and partnerships rather than hardware-only approaches. Investors should monitor partnership outcomes (Foxtel–Telstra), regulatory responses (ACCC), and competitors' distribution deals (Fetch/iiNet, Austar) as these affect subscriber reach and cost structures.
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