The competition regulator has approved Foxtel's acquisition of regional pay TV operator Austar after Foxtel agreed to a series of court-enforceable undertakings regarding online distribution.

Foxtel will not be able to acquire exclusive internet protocol television (IPTV) rights for a range of television program and movie content or exclusively acquire any movie delivered on a transactional video-on-demand (TVOD) basis.

The undertaking, which will apply for eight years, will restrict exclusive IPTV access for more than 60 current Foxtel channels including Universal, CNN, Disney, Eurosport, Family Movie Channel, MTV, Sci-Fi, Starpics, and World Movies.

The undertaking also prevents Foxtel from acquiring exclusive mobile rights to such content when rivals want to combine mobile viewing with IPTV rights, allowing competitors to deliver an integrated package of programming across a number of devices.

The Australian Competition and Consumer Tribunal (ACCC) said its main area of concern with the acquisition was in the national retail market for subscription television services, particularly in relation to the developing IPTV field, and a number of regional markets for the supply of fixed broadband and fixed voice telephony products. Telstra owns half of Foxtel and, following the merger, Telstra would have the ability to acquire preferential access to Austar’s existing subscriber base and potentially bundle fixed voice, broadband and IPTV services.

“The proposed acquisition would bring together the two main subscription TV industry players in Australia each with a substantial customer base and significant access to key content," ACCC chairman Rod Sims said in a statement. "This would in turn give Telstra, Foxtel's largest shareholder, greater market power in regional fixed broadband and telephony markets.

“By reducing content exclusivity, the undertakings will lower barriers to entry and promote new and effective competition in metropolitan and regional telecommunications and subscription television markets. Taking into account the undertaking which has been offered by Foxtel, the ACCC is satisfied that the proposed acquisition is unlikely to substantially lessen competition.”

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