Igloo deal signals weakening of Com Com

Wednesday 16 May 2012, 7:23PM
By Labour Party

Labour today warned that the reluctance by the Commerce Commission to challenge the growing market dominance of Sky TV was a weakening of its role to defend a competitive market, for the benefit of New Zealand consumers.

Labour’s Communications and IT spokesperson Clare Curran, said today’s decision by the Commerce Commission to approve Sky’s Igloo joint venture deal with Television New Zealand, allows Sky to further entrench its place as the dominant pay TV provider.

“The decision allows Sky to access a greater section of the New Zealand market by offering a cheaper version of its existing service,” Clare Curran said.

“Igloo does not represent a new provider. It’s a subset of the existing dominant provider. This shows a concerning development for New Zealand’s pay TV market.

“Labour does, however, welcome the Commerce Commission’s decision to investigate Sky’s content contracts with internet service providers, which will place a spotlight on the barriers to entry for new players.

“This has significant implications for the uptake of ultrafast broadband,” Clare Curran said.

“Sky takes the view that there are no barriers to competition and that complaints are driven by its competitors. But there are widespread concerns - including from a range of independent commentators - that serious competition issues exist because of Sky’s market dominance.

“An inquiry by the Commerce Commission and the Telecommunications Commissioner into Sky’s contracts and commercial arrangements, with all cards on the table, would show who was right.

“There are also growing concerns about the possible decision not to re-appoint Ross Patterson as Telecommunications Commissioner.

“Mr Patterson is respected across the industry and a decision not to re-appoint him would send another strong signal that the competition watchdog role was being de-valued.

“There is also speculation that the office of the Telecommunications Commissioner will be merged into the Commerce Commission, further weakening its role. This would be a disaster for the telecommunications industry at a particularly significant time,” Clare Curran said.