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City of Sydney joins court action against Telstra in ongoing outdoor advertising dispute

The battle for control of some of Australia’s most prominent outdoor advertising spaces has ramped up, with the City of Sydney attempting to join the City of Melbourne in action against Telstra.

Telstra has an arrangement with outdoor advertising giant JC Decaux, which sees prominent ads displayed on the telco giant’s payphones.

The City of Sydney is going to battle with Telstra

Earlier this year, the City of Melbourne referred Telstra and JC Decaux’s new phone booths to the Victorian Civil and Administrative Tribunal, claiming the large-format digital advertising displays on the facilities were subject to local government planning rules. The council claimed the new generation payphones featuring large-format digital ads are not “low impact” under the federal government’s telecommunications rules, and therefore not exempt from council regulations.

Telstra, in turn, then took the City of Melbourne to the Federal Court, in a bid to settle the dispute on a more national and comprehensive level.

Up in New South Wales, in April, the City of Sydney resolved to lobby politicians and regulators over the telco’s plans.

And now, after exploring its legal options, the City of Sydney has announced it has filed an application to join the City of Melbourne in the Federal Court proceedings.

The City of Sydney said it disputes the idea Telstra can install the upgraded payphones with integrated advertising displays using its powers under the Telecommunications Act, 1997.

“Our view is that the new upgraded payphones are not intended to be designed solely for use as a content and carriage service.

“We understand they will feature large commercial advertising panels that will increase clutter on our footpaths at a time when we are working hard to reduce it,” a spokesperson said in a statement to Mumbrella.

“These actions by Telstra would reduce our control of footpaths and public spaces and reduce our ability to ensure that the design and location of these enlarged payphones doesn’t negatively impact pedestrians or businesses.”

The City also questioned why Telstra would be increasing the number of public payphones, when it has publicly cited a reduction in their usage, and previously scaled back their presence.

The ongoing dispute comes as the City of Sydney attempts to find an outdoor provider for its advertising and street furniture contract.

It is understood the ads on Telstra’s payphones could significantly reduce the income councils could generate from their own outdoor assets.

The City of Sydney first launched expressions of interest for its outdoor contract – which includes installing and operating outdoor advertising displays, kiosks, toilets, shelters, communications pylons, seats, bins and WiFi services – in late 2017.

The expressions of interest stage was followed by a flurry of bidding and subsequent acquisitions in the out-of-home advertising sector, with Australia’s largest player Ooh Media eventually succeeding in purchasing HT&E’s street furniture business Adshel, and the world’s largest outdoor company, JC Decaux, purchasing APN Outdoor – at the time nearest local competitor to Ooh Media.

The City of Sydney then took the contract back to EOI stage, at the time denying the reset was due to the consolidation which had occurred in the industry. Instead, the council said it wanted to give contenders for the contract the chance to bring a more refined offering to the table, and more adequately respond to the complex nature of the contract.

JC Decaux, by now the owner of APN Outdoor, then pulled out of the process altogether.

This left only Ooh Media in the running.

Last month, however, the City revealed it would take a proposal to the councillors to ditch the tender process completely, contending it was not inspiring the best outcomes. Instead, it wants to go direct to market, presumably to negotiate directly with Australia’s remaining outdoor companies.

JC Decaux declined to comment on the ongoing action.

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