Government supports Sky's 'market' solution to internet TV concerns

Sussan Turner. Photo / Supplied

The Government and Sky TV sang from the same hymn-sheet at a Commerce Commission conference on the future of ultra-fast broadband in Auckland yesterday.

Communications and Information Technology Minister Amy Adams and Sky TV chief executive John Fellet said there was no need to intervene in the emerging wholesale market for internet TV content.

Sky's dominance of TV content has sparked concerns from MediaWorks and TelstraClear about the shape of internet television. TelstraClear has suggested it could reduce competition, unique video content and eventually the uptake of ultra-fast broadband (UFB).

National's endorsement of Sky TV's view of the market is true to form. But the address to the Commerce Commission illustrates how it supports Sky's strong position in the new era of internet TV.

Earlier Sky TV had strongly objected to the issue of content being included in a commission study of potential barriers to UFB uptake.

Some believe Adams' endorsement signals an eventual clash with Telecommunications Commissioner Ross Patterson.

Adams mirrored Fellet's view that competition should be resolved by "the market" and negotiations among businesses.

But internet service providers such as TelstraClear have previously raised alarm bells about Sky's dominance including restrictive contractual terms that limit acquiring content outside deals with Sky.

Internationally, video on demand has played a major role in the uptake of UFB but Sky has challenged the inclusion of content on the periphery of a Commerce Commission study.

Adams said yesterday she would be closely monitoring issues that might affect the uptake or effective implementation of UFB and expected the industry to show leadership

"Where that does not occur I am more than prepared to step in. But I'm ... cautious about reaching for regulation as a solution at this stage when it is too early in my view to anticipate how the competitive content market will look."

MediaWorks managing director Sussan Turner told the conference New Zealand needed a regulated wholesale market for content. The aggregation of screening rights by rivals Television New Zealand and Sky, which recently entered into a joint venture called Igloo, was stifling opportunities for rival broadcasters.

"Separate regulation of broadcasters and telcos is antiquated and limits growth, innovation and competition," Turner said.

"It's MediaWorks' contention that telco companies and free-to-air broadcasters won't have much without a wholesale market for content."