Paul Brislen: Commission's Sky TV deal inquiry a waste of time

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File photo / Sarah Ivey
File photo / Sarah Ivey

The Commerce Commission is looking at whether Sky TV's contractual relationship with the country's ISPs breaches sections 27 or 36 of the Commerce Act.

Sky, you see, has signed deals with a number of internet providers to offer Sky's online replay service, and there is concern that it is using these agreements to block competition.

Instead of wasting all that time and energy I can tell you now that the commission will find Sky hasn't breached sections 27 or 36 in any meaningful way.

Section 27, as the commission itself puts it, "prohibits anyone from entering into, or implementing arrangements with the purpose, effect or likely effect of substantially lessening competition". Clearly, Sky hasn't done that - any contract it has signed was for the purpose of ensuring it gets the same treatment as any potential competitor.

If any lessening of competition occurred it will be a byproduct, rather than the main aim of the contract.

Section 36 is even more easily discarded - s36 "makes it illegal for any business with a substantial degree of market power to take advantage of that power to deter or prevent rival businesses from competing effectively" and has never really been used effectively in New Zealand.

Proving that a powerful business has done something that any other business wouldn't do in its shoes is almost impossible and in this case Sky TV can argue that these kinds of exclusive deals are simply the standard in the broadcasting world.

After all, the commission says there's no lessening in competition evident should Sky and TVNZ create a joint venture, despite one being the largest pay TV operator in the land and the other being the largest free-to-air TV provider. So that's that.

It'll take the Commerce Commission more time and longer words but I feel pretty confident they'll come to the same conclusion because the problem is not Sky TV, it's the regime in which Sky TV operates.

In New Zealand, we have two opposing regimes designed for two separate markets that simply aren't separate any longer.

Telecommunications and broadcasting have been on a collision course for many years as technology makes it easier for anyone to broadcast content over the airwaves or copper lines, or fibre optic cables.

Gone are the days where broadcasters were few and far between and needed special licences from government agencies - instead every one of us is a broadcaster, firing out tweets, photos, blog posts, videos and podcasts without a second thought.

Unfortunately, we have a heavily regulated telecommunications sector trying to do business with an entirely unregulated broadcasting sector and that's beginning to chaff.

Set up a new business selling content online and you are treated as part of the telco regime, but call yourself a broadcaster and use a slightly different technology to deliver the exact same content and the world's your oyster.

We currently have under way the Commerce Commission investigation into Sky TV, the Telco Commissioner's study of barriers to uptake of the new ultrafast broadband network (UFB), the review of the media laws in New Zealand with a view to not only sorting out those pesky bloggers but also cyber-bullying (a strange pair of bedfellows if ever there was), a newly minted Copyright Act and attendant tribunal that's yet to see a single complaint filed, a review of said Copyright Act's fee structure, a Patent Bill that's waiting to be passed into law that may upset our trading partner the United States because of its declaration that software cannot be patented in New Zealand, and secret trade negotiations that may or may not give away our rights in terms of intellectual property.

Rather than this piecemeal approach to the emerging digital world, we need a national strategy to tie up all the loose ends, whether it be video content and its availability on the UFB or Sky's role as content aggregator and wholesaler to the ISP market or our view on how best to preserve our IP when negotiating with potential competitors.

The Government is investing $1.5 billion in taxpayers' money in an ultrafast broadband network that needs video content to be a success.

We have limited competition in terms of media in New Zealand and no laws governing such things.

We have a Copyright Act that simply defends a dead business model and media laws that could well include provision for taking phones off children in schools. We stand on the cusp of a new economic era, one where we aren't defeated by the tyranny of distance but where we can take part in this new digital economy and play a key role.

For the first time ever we're only a click away from our markets but in order to make the most of this opportunity we need to ensure our electronic ducks are in a row.

The Commerce Commission can't lead this work - it's a regulatory body, not a policy arm, but without this kind of review we'll continue shining our torch on disparate parts of the beast without realising we're staring at the elephant in the room.

Paul Brislen is chief executive of the Telecommunications Users Association of New Zealand

- NZ Herald

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