Prominent telecommunications analyst Paul Budde expressed scepticism that the undertakings would lead to concrete results, citing the telecommunications sector's dubious record on the implementation of such commitments.
"There are undertakings regarding network access that were expressed in 1997 that still haven't resulted in a more competitive market," Budde said.
However, high-speed metropolitan network provider, TransACT, welcomed the undertakings as strengthening competition in the sector.
TransACT's chief executive officer Michael del Gigante, greeted the news with confirmation his company had negotiated rights to deliver Foxtel content to its customers. "Allowing small network operators such as ourselves access to content will ultimately strengthen competition in the market place," del Gigante said.
Pay TV networks Optus and Foxtel, yesterday released a series of undertakings designed to allay concerns expressed by the Australian Competition and Consumer Commission (ACCC) in June, that their existing content sharing arrangement breached the Trade Practices Act.
The undertakings focus on ensuring that any content sharing between the two is strictly non-exclusive, opening the Foxtel and Optus infrastructure up to other players, and removing a clause in the original agreement which offered Foxtel first dibs on the Optus hybrid-fibre cable network should it ever be sold. Foxtel has also made a commitment to invest more than $600 million in upgrading its network to rollout a digital service, with extra channels provided for independent broadcasters.
While not directly party to the content-sharing proposals, pay-TV provider Austar and Telstra, 50 percent owner of Foxtel, also released undertakings designed to appease the ACCC by boosting competition.
Optus chief executive, Chris Anderson, said "the [Optus] undertakings greatly improve the competitive position of the broadband and pay TV sector. The best content will be offered to third parties - which will lead to an increase in competition in the fixed customer access market".
del Gigante indicated the pay television operators had only become amenable to content-sharing deals over the past few months, as the competition regulator's concerns became evident.
"We were trying to broker this deal with Foxtel for a long time, and we were never able to get them to talk about carrying their content over our network," del Gigante said. "Over the last few months they became far more amenable to negotiation."
Budde conceded the announcement addressed the key issues of providing network access to independent broadcasters, providing content access to third party service providers, and providing access to the so-called set top box.
"At face value it would appear that these three issues have been addressed by the undertakings," Budde said. "We have to be realistic in a country like Australia because there is no way we can support duplications of the cabling infrastructure, and these undertakings, if they are carried out, will enable competition to occur over the existing infrastructure."
Calling for public comment the ACCC is releasing copies of the draft undertakings via its Web site. However, in a statement to the press ACCC Chairman, Professor Allan Fels said the release of the draft documents should construed as evidence that the organisation had formed a view on the documents.
"This process will be used by the ACCC to inform itself of market views on whether the undertakings will likely address the key competition concerns," Fels said. "A final decision will be made after taking these views into account"
