Foxtel Won’t Get Fourth TV Channel

Foxtel who was hoping that the Federal Government would sanction a fourth TV network is set to be disappointed after Communications Minister Stephen Conroy privately told Australia’s TV bosses that the concept had been “mothballed”.

According to the Australian newspaper, an executive at the meeting said “I sat in a meeting in Sydney with Conroy last month and he surprised all of us”. “There were about 20 people in the room and it was a bombshell to hear the government finally ruling out a fourth network,” said the executive under the condition of anonymity.

Foxtel had been hoping to bid for the tipped fourth network.

According to the Australian the decision is part of more sweeping changes Senator Conroy is set to announce for Australia’s media and telecommunications landscape after last week’s policy shake-up for Telstra and as the Rudd government looks to unlock valuable radio airwaves for new wireless technologies.

Instead the spectrum, that was set to be allocated if a fourth network was approved is to be used for new 4G wireless services which will allow video and content to be streamed to portable devices such as phones and notebooks.

Currently free to air TV networks pay the government for spectrum by paying a percentage of gross annual revenues for the right to use it.

What the free to air TV networks feared was that a fourth network would dilute advertising earnings.

The Australian said that the Senator’s decision, which is expected to be announced as public policy in the next few weeks as the government releases a green paper on how the radio spectrum should be used, has also been ticked off in the Prime Minister’s office.

One headache for consumers and the television industry in the shake-up of the spectrum is that televisions around the country will need to be retuned to a station’s signal — probably in late 2012 ahead of the 2013 switch from analogue to digital signals.

The Australian also claims in a seperate story that Communications Minister Stephen Conroy said the government would not necesarily force Telstra to sell its 50 per cent stake in Foxtel. This decision is at the minister’s discretion under the legislation announced last week.

In this scenario, the telco would still be allowed access to new wireless spectrum, which the government is threatening to withhold if Telstra does not agree to a structural split of its wholesale and retail divisions. Under the legislation the Australian Competition and Consumer Commission must sign off on a division plan submitted to it by Telstra.

“If we do receive an acceptable form of structural separation, put forward by Telstra, that the ACCC and myself tick off on, then we would consider not proceeding with those other two options,” Senator Conroy told ABC’s Inside Business. “It’s not an option that we are mandating as a final outcome.”