Foxtel warns of job losses and investment cuts if government sanctions geoblock bypass

James McGrath
By James McGrath | 23 September 2014

Foxtel has slammed a recommendation from a draft IT review which gives the thumbs up to Australians bypassing geoblocks, and warned any such move would likely result in job losses and reduced levels of investment.

In proposals bound to infuriate broadcasters, the draft report calls on government to show consumers how they can circumvent geoblocking and advise on the tools and techniques to do so.

The in-principle recommendation, made in a draft report into the pricing of IT goods by a House of Representatives standing committee, says the government should educate Australian consumers and businesses by investigating:

The extent to which they may circumvent geoblocking mechanisms in order to access cheaper legitimate goods;
The tools and techniques which they may use to do so; and
The way in which their rights under the Australian Consumer Law may be affected should they choose to do so.
In response to the draft report, a Foxtel spokesperson told AdNews that any move toward actively encouraging Australians to bypass geoblocks would threaten its business and the local economy. "Limiting Foxtel's ability to aggregate and resell international TV content would fundamentally undermine our capacity to employ Australians and to invest in Australian programs and new technology," they said.

Local content owners have been lobbying government to adopt measures which would prevent Australians accessing overseas services such as Netflix.

In tandem, broadcasters are confident that they can head off any local operation by Netflix, or eventually, Amazon, by sewing up Australian distribution rights for new TV shows produced overseas.

Director of Foxtel's nascent subscription video on demand service Presto, Shaun James, said that would make life difficult for any new entrants.

"[Netflix] will be an inferior local service because of the rights that currently sit with Seven, Nine, Ten, ABC, and Foxtel," he said.

But the advancing horde of streaming competition, both from local media owners and new arrivals has forced Foxtel to rethink its pricing model.

The pay TV provider has slashed entry-level pricing to $25 per month. The company said this made its service comprable to those offered by subscription TV providers in other developed economies.

The panel which has made this set of recommendations comprises Professor Ian Harper (partner at Deloitte Touche Tohmatsu, director of Deloitte Access Economics Pty Ltd and a professor of the University of Melbourne); Mr Peter Anderson (public policy specialist in national and international affairs); Ms Su McCluskey (chief executive officer of the Regional Australia Institute) and Mr Michael O'Bryan (a Queen's Counsel at the Victorian Bar).

Consultation on the Draft Report is now open, and will run for eight weeks until 17 November, with a final report to be submitted to the government in March next year.

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