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Regulator tools too blunt for web-TV convergence: Quickflix

Thursday 17th May 2012

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The Commerce Commission's tools are too blunt to deal with the growing convergence between telecommunications companies and broadcasters, and an independent regulator would be a better option for the sector, according to ASX-listed Quickflix.

The Sydney-based streaming and on-demand video supplier backs an independent regulator to monitor the rapidly changing face of telecommunications and broadcasting, which are crossing into each other's territory as firms look to cash in on a shift to watching movies and TV shows over the internet.

New Zealand managing director Paddy Buckley told BusinessDesk the Commerce Commission doesn't tend to act “until things have come to a head." An engaged independent regulator would probably make a difference in assessing the issues facing the industry and working in a constructive manner to address them.

"The Commerce Commission itself has some pretty blunt tools at its disposal," Buckley said. "An independent regulator would be more nimble and would have been talking about all these issues a long time ago."

The antitrust regulator yesterday launched a probe into pay-TV operator Sky Network Television's control of premium content and contracts with internet service providers, saying they may fall foul of the Commerce Act in being uncompetitive.

Earlier this month, Quickflix complained about the ISP contracts in a submission to the regulator's investigation into demand-side drivers for broadband uptake, saying they would stifle uptake of ultra-fast broadband, and yesterday welcomed the probe.

Buckley said it was "inappropriate" for Sky to cut deals with ISPs that impact on third-parties and constrain rivals' ability to enter into separate contracts.

News Corp-controlled Sky's dominance in the market has been a bone of contention for its rivals, and a joint venture with state broadcaster Television New Zealand to set up a budget pay-TV option consisting of various Sky channels and TVNZ's free-to-air content annoyed the media companies' rivals. The regulator yesterday approved the joint venture, saying it won't erode competition.

Quickflix joins broadcaster MediaWorks, whose stable of TV and radio stations include TV3, Four, The Rock and RadioLive, in calling for an independent regulator of the two increasingly related sectors to ensure a level playing field.

The government has so far resisted that step, with new IT Minister Amy Adams earlier this year saying it was too early to regulate a structure that's still in a state of flux, and that the market might solve any problems on its own.

Adams acknowledged the regulator's probe yesterday, saying it was "always my view that was within their jurisdiction so good to see will be looked at," in a Twitter update.

Quickflix's Buckley said it would be "sensible" to introduce an industry-specific regulator before the sector gets too far ahead of itself, and that such a move would probably attract a groundswell of support.

"I'm certainly under the impression the majority of people in our industries would favour some sort of independent regulator. Sky wouldn't," he said. "I just don't think this is a political thing. This is just saying what's sensible given where we are."

Quickflix's shares rose 4.6 percent to 11.5 Australian cents on the ASX today.

BusinessDesk.co.nz

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