UFB will fail without new video services: Mediaworks

Mediaworks MD Sussan Turner says separating broadcasting and telco regulation is antiquated

The Ultra Fast Broadband network will fail without new broadcasting and video services, Mediaworks managing director Sussan Turner told a Commerce Comission conference yesterday.

“I do have to ask Crown Fibre Holdings and the UFB regional networks, all of whom are here today and mandated to make a profit, if they actually believe that UFB will be connected to 75 percent of New Zealand homes without new broadcasting and video on demand services,” she said.

“To that point I say this $1.5 billion infrastructure investment will fail, repeat, will fail, unless households are prepared to first connect them and then to pay again to access competitively priced entertainment and information services.”

Speaking during a panel discussion on the drivers of consumer demand at the Future of High Speed Broadband conference in Auckland, Turner said there needs to be an open access wholesale market for content, and that will require regulatory oversight.

“What’s needed in the broadcasting sector to drive UFB into households? Firstly, given that the convergence of digital distribution networks is complete and given the long standing policy principle of network neutrality, those networks ought to be subject to regulation by the telecommunications commission. That is our view,” she says.

“Separating the regulation of broadcasting from telecommunications is antiquated and limits the growth, innovation, competition – it’s our belief they should become one.”

Earlier in the day ICT Minister Amy Adams ruled out regulation in her first major speech to the telecommunications industry.

“While I recognise the value of such content for consumers, and the role it will play in initial domestic uptake, I will signal now that I'm cautious about reaching for regulation as a solution at this stage when it is still too early, in my view, to anticipate how the competitive content market will look in a UFB environment,” Adams says.

“While the innovative services that have been launched in overseas markets are yet to make a significant impact here, I’m concerned that premature government action could in fact stifle innovation in this space.”

Sky TV CEO John Fellet, who was participating in the same panel discussion as Turner, disputed comments made by Netflix executive Brent Ayrey who said at a Computerworld conference last year that the company is staying away from New Zealand, in part, because of difficulties securing regional distribution deals.

Fellet says Netflix is tackling the larger markets first and will eventually come to New Zealand.

When challenged during question time by a TelstraClear representative about a deal with Sky TV that restricts the ISP from seeking content from other suppliers, Fellet declined to talk about their ongoing negotiations. “I’m not sure this is the right venue,” he said.

Fellet also noted that there is very little government intervention in this area around the world except “there’s a little bit in England in some isolated cases”.

Former TUANZ CEO Ernie Newman asked during question time if the content industry could look at self-regulation modelled on the Telecommunications Carriers Forum. He says that in telecommunications “industry self regulation, admittedly with a reuglatory backstop, was a big help in getting the players to talk to each other and play nicely on the deal.”

Turner’s answer to this suggestion was “there is always hope.”