Australia's Seven Network has won its battle to gain access to Telstra's cable network, in a move that loosens cable operator Foxtel's existing dominance of the country's pay-TV market.
Telstra owns 50% of Foxtel and 100% of the network which passes about one third of all Australian homes. The Australian Consumer and Competition Commission (ACCC) decided last year that analogue platforms should be available to all comers, a decision made possible by legislation passed in 1997 which aimed to promote competition.
However, Seven Network and ethnic interest broadcaster Television & Radio Broadcasting Services (TARBS) had to resort to the Federal Court when they put the ruling to the test. The court decided this week that the exclusive access arrangement between Telstra and Foxtel doesn't apply.
Seven wants access to the network for three channels, two of which would broadcast coverage of the 2000 Olympics in Sydney September. But the broadcaster has never made a secret of having more ambitious projects in mind and is not short of content due to its relationship with UK media group Granada and its access to the MGM movie library. Australia's other two pay-TV platforms, Optus Vision and regional operator Austar, currently carry Seven's sports channel C7.
The Federal Court's decision hinged on whether Foxtel and Telstra had an exclusive contract that was settled before the passing of the 1997 legislation. However, Foxtel and Telstra are expected to appeal and a separate court action is underway which challenges the ACCC's original declaration.
Some commentators argue that an open access regime devalues one of telecommunication giant Telstra's most strategic assets, while others say it provides a real chance for Telstra to maximise an investment that cost billions of dollars in tax-payers money.