Media partners leap to Telstra defence

Telstra's media partners have ensured that the telecommunications incumbent won't be the sole voice defending its massive market share in the lead-up to the National Broadband Network.

Sports organisations the Australian Football League (AFL), the National Rugby League (NRL) and V8 Supercars have all made submissions to the Federal Government's regulatory reform discussion paper, arguing that Telstra's exclusive online content deals are critical to their ongoing success.

AFL chief operating officer Gillon McLachlan said he "concurs" with Federal Government concerns about how a powerful telecommunications player might monopolise content to the detriment of competition.

But he warned the Government that "care needs to be taken in addressing these hypothetical concerns given that inappropriate regulation may result in a lack of investment in content by all telecommunications providers."

Media rights, McLachlan argues, is the AFL's largest source of revenue - worth 50 per cent of its business. Foxtel maintains the AFL's exclusive Pay TV rights and Telstra its exclusive online rights.

Existing regulations such as the Trade Practices Act, McLachlan argued, are "sufficient" and "adequate to deal with the Government's stated concerns."

The Rugby League fraternity, meanwhile, made a submission to "draw to the attention of the Government the possible unintended consequences" of an NBN.

A joint submission by NRL CEO David Gallop and ARL CEO Geoff Carr, who together employ 200 staff, defended Rugby League's decision to grant exclusive online media rights to Telstra Media.

"Exclusivity is a vital part of any rights deal as it is the point of differentiation which gives rise to the value placed on the broadcast," the joint statement said.

"The unfair characterisation of content as a "lock-in" device - this in some way implies a negative outcome.

"The practice of attracting customers and retaining customers is a long held business practice... There is currently no evidence that proves the NRL's exclusive online and mobile rights have limited the opportunities available to competitors.

"Should Telstra ...be excluded from bidding for unique content while media companies entering this space remain able to through their existing arrangements, then competition will in fact be reduced."

The two parties concurred with the AFL's suggestion that "the current regulations sufficiently drive competition within the online sports media rights market."

The football codes were joined in their effort by Telstra's other major content partner, V8 Supercars Pty Ltd, which derives 22 per cent of its revenues from exclusive content deals, including online rights granted to Telstra.

While the motor sports body's chairman Tony Cochrane recognised "exclusive deals can be anti-competitive," he is "concerned by the proposal in the Government's Discussion Paper that restrictions may be placed on the ability of Telstra to acquire exclusive content rights."

Again, the sports body claimed "the existing provisions of the Trade Practices Act are sufficient to address any competition concerns."