Foxtel: Broadband’s good for business; News Corp: We’re not as big as you think

Foxtel rebrandFoxtel has this afternoon issued a statement insisting that it is in favour of fast broadband for Australia. The comment comes against a series of claims that the company’s 50 per cent owner News Corp is campaigning against the Labor government because it fears that the National Broadband Network could damage its business model.

At the weekend, Fairfax Media’s The Sun-Herald and The Sunday Age suggested there was a “News Ltd plot to get the Prime Minister”. In an item heavily promoted on the front page, columnist Paul Sheehan claimed that the reason controversial News Corp editor Col Allan has temporarily returned from the New York Post is to lead a battle against Rudd’s re-election. Sheehan claimed: “News Corp hates the government’s National Broadband Network. The company has formed a view that it poses a threat to the business model of by far its most important asset in Australia, the Foxtel cable TV monopoly it jointly owns with Telstra.”

While the Coalition is also committed to delivering NBN, its vision is for a cheaper but slower version of the service. Sheehan claims this offers consumers less opportunity to download content.

tele front page laborOn Monday, News Corp’s Sydney tabloid The Daily Telegraph led with a front page splash urging readers to “kick this mob out”.

However, Foxtel today issued a statement suggesting that it sees the NBN as an opportunity rather than a threat. It said:

“Foxtel welcomes the deployment of broadband networks in Australia.
Better broadband will improve Foxtel’s ability to reach new customers and offer new services.

“There is currently good quality broadband through much of Australia.

“Today’s broadband supports products such as Foxtel Go (Foxtel’s mobile offering) and Foxtel Play (Foxtel’s internet protocol television (IPTV) product).

“Even without government intervention, these networks would have developed and expanded. If government action improves in the reach and quality of broadband networks, or ensures that they are deployed more quickly, Foxtel will benefit by being able to offer products such as Go and Play to more Australians.

“Of course improved broadband increases the opportunities for new entrants and competitors. Foxtel has always anticipated that this would happen. In fact Foxtel already faces competition from many old and new entrants to the media and communications market.

“Just as Foxtel created competition for the incumbent free to air broadcasters and redefined the television market in Australia, broadband delivery will, overtime, further reshape the media in ways that will be beneficial to consumers.

“Foxtel is confident that the quality of its content, technology and brand will ensure that it will continue to be a market leader in the delivery of video services.

“The company will not comment further on this issue.”

Rudd reportedly today told journalists of News Corp boss Rupert Murdoch:

“It’s for others to ask the question why Mr Murdoch really doesn’t want the National Broadband Network to be connected to everyone’s home and everyone’s small business premises.

“Does he sense it represents a commercial challenge to Foxtel – which is a major cash cow for his company – or not?”

“I think he’s made it fairly clear through one of his editors the other day that he doesn’t really like us and would like to give us the old heave ho and get his mate Mr Abbott in.”

5.10pm update: Less than an hour after Foxtel’s statement, News Corp put out its own statement, responding to attacks on its media dominance:

“Recent political commentary has perpetuated a long-standing myth that News Corp Australia owns 70% of Australian newspapers.

“News Corp Australia owns or co-owns 33% of all ABC and CAB audited newspapers in Australia.

“News Corp Australia newspapers are popular – over half the adult population of Australia chooses to read a News Corp Australia newspaper each week. This means that News Corp Australia has a 59% share of newspaper circulation.

“All of this ignores television, radio and the myriad of online news sources which offer more diversity in opinion than at any time in history.”



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