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Sky TV content agreements need more investigation, regulator concludes

Monday 3rd September 2012

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The Commerce Commission says it needs to dig a little deeper into pay-TV operator Sky Network Television's content arrangements with internet service providers after completing the first stage of its investigation.

The antitrust regulator told Sky TV, whose biggest shareholder is Rupert Murdoch's News Corp, it believed further investigation into the pay-TV company's agreements was necessary after wrapping up its initial probe, the Auckland-based company said in a statement.

"Given the complexity of the issues involved, Sky Television is not surprised at this development," it said. "Sky Television will continue to cooperate with the commission concerning its investigations and is confident that the relevant arrangements do not breach the Commerce Act."

The regulator launched its probe in May when giving Sky and state-owned broadcaster Television New Zealand the green light to proceed with a joint budget pay-TV platform, Igloo.

The regulator's report into the joint venture found retail service providers (RSPs), which offer access to the internet and enable bundling of Sky's video content, said their "reseller and retransmission agreements restrict RSPs' ability and incentive to partner with new entrants."

Sky's content arrangements have come under scrutiny since the Commerce Commission began researching potential impediments to broadband uptake after the government stumped up $1.5 billion to build a national high-speed internet fibre network.

The pay-TV company failed in its bid to have content excluded from the commission's review, which it had argued could become a quasi-regulatory inquiry if content arrangements were found to be a barrier to uptake.

Sky's shares rose 0.6 percent to $5.09 in trading today, and have shed 4.5 percent this year.

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