The headline on news.com.au reads: “Foxtel is Telstra’s IP Choice.” I read, “Telstra has no intention of competing with Foxtel.” The article quotes BigPond chief Justine Milne:
The way I define IPTV will be pay TV delivered over IP (internet protocol) networks … We have already got a really fantastic pay-TV company in Foxtel.
My translation: “why on earth would we compete with something we own?”
And this is precisely why we destroyed competition by letting Telstra do what other telcos around the world dream of: holding the copper and cable networks. Jerry Hausman and I wrote the other week that this had harmed competition in telephony. Well, it is pretty clear that it will also harm future competition in television. Like we had a ton of that already!
If the “last-mile” competition you describe is so important, why is it that regional players like Neighbourhood Cable (in Ballarat, Geelong & Mildura) don’t pose a bigger threat to Telstra’s market dominance in these areas?
Good question.