Is Sky TV the new Telecom?
It is big and it is dominant. And now it faces a regulatory threat which may hinder its efforts to carry its dominance into a new technological era.
How real that threat is remains uncertain. Sky TV chief John Fellet says the company has nothing to hide. But that didn't stop investors panicking this week.
News that the Commerce Commission will investigate Sky's deals with internet service providers knocked 7 per cent off the company's value on Wednesday - a staggering $148 million of wealth gone in quick time.
The shares have since bounced back but the company still closed the week down 35c at $5.20.
Why the panic?
If Sky is able to use its current clout to do exclusive deals with major internet service providers, then it will have this new web-based market sewn up as well.
But if the Commerce Commission gets in the way and demands some kind of regulated carve-up of web providers, then Sky could not expect to maintain the kind of market share it has enjoyed in the satellite-based pay TV market.
So Wednesday's announcement represented a big threat to Sky's future growth potential - which is where a lot of its value still lies.
Fellet says none of the deals that Sky has done, or will do, breach the Commerce Act. But history suggests that laws like the Commerce Act are open to interpretation, and this is new territory.
The deals it does may be seen as a deterrent to international web content providers that could enter our market with the scale to take on Sky TV in the bidding war for top programmes.
Thus far Sky's dominance and the small size of our market have made New Zealand uninteresting to United States giants like Hulu and Netflix.
That may change, Australian player Quickflix has already jumped in and isn't afraid to test Fellet's view that Sky's dealings are clear of the Commerce Act.
If investors were underwhelmed by Fellet's reassurance it probably has something to do with memories of Telecom's unruly fall from grace.
Regulators in this country have a history of turning up late to the party ... but driving a convertible straight into the pool when they do.
Telecom shed a quarter of its value in the first two weeks of May 2006 when the Government of the day surprised the market and fast-tracked a major regulatory announcement.
You can certainly lay blame at the feet of Telecom for having a "head in the sand" attitude to regulatory risk.
It held on too long to the past and devoted too much effort to fighting regulatory battles when it should have been focused on customers' needs.
But when the regulation finally came it destroyed far too much investor value far too quickly.
The big-shot foreign investors with brokers were able to dump their stock.
It was the local mum and dad investors who had stuck with the company from the beginning who didn't stand a chance.
New Zealand investors lost more money on Telecom than they did on any one finance company.
Markets don't like surprises.
The way the Commerce Commission announced its investigation plans on Wednesday was surprising.
It was tacked on, almost as an afterthought, to a press release which gave the green light for Sky and TVNZ's Igloo TV service.
It is vital that the Government and its regulators find the right balance here.
The annoying fact that Sky TV holds the rights to all the best TV programmes can be easily dismissed by the powers that be.
Nobody ever died from waiting three months to watch an episode of Game of Thrones or Mad Men.
But proper regulation of this new market is a bigger issue than that.
It goes to the heart of doing business in this country and it is something we have got wrong time and time again. Those who bemoan Sky TV's grip on all the quality content would no doubt urge them to embrace competition now, to give up the fight and focus entirely on customer service and customer choice.
They won't, not yet.
Why should they? They've got a duty to protect their value for shareholders.
It is not clear yet that this is a fight they will lose any time soon - particularly given the favourable hearing they have had from successive governments in the past decade or so.
But the tide of public opinion is powerful, governments can change and even when they don't they can change their policies.
There is risk for Sky in this Commerce Commission investigation and even if the ruling goes its way, there is risk that the Commerce Act may be changed on them.
Sky would do well to look to Telecom for an example of what not to do.