ACCC Should Be Good Sports

The chairman of the Australian Competition and Consumer Commission, Graeme Samuel, argues that if Telstra acquires the exclusive right to broadcast popular content on mobile phones then its competitors will be discouraged from investing in modern infrastructure. This is not the case.

By allowing service providers like Telstra the capacity to provide exclusive content to their customers, it encourages other networks to develop similar offers.

Optus already provides video news to their mobile customers.

Other phone and internet companies are contentedly building new infrastructure and developing new technologies to provide better, higher quality services to consumers. In the drive to attract more consumers, companies are forced to be more creative and more innovative.

Samuel argues that if Telstra is allowed to provide its customers with Australian Football League statistics and replays then this may cease. This is disingenuous at best.

To pick on one type of entertainment, popular though it may be, and then decide that it is suddenly a public good seems absurd. Exclusive sporting content is not the barrier to third-generation telecommunications competition that the ACCC thinks it is.

Leave sporting rights alone.

Nothing would encourage the competition that the ACCC is sworn to defend like letting the providers actually compete.

There Can Never Be Too Much Sport, Mr Samuel

While the first footy game of 2005 might still be weeks away, former AFL commissioner and now chairman of the Australian Competition and Consumer Commission Graeme Samuel recently kicked off the pre-season competition. He suggested that the ACCC was considering regulating the sale of the rights to broadcast AFL games over the internet and via mobile phones.

Samuel’s target is Telstra, which he fears will use its substantial financial resources to buy the exclusive rights to matches.

The problem, according to him, is that customers will prefer the internet and mobile phone products of a company that carries AFL games, compared with a company that doesn’t. And this, according to the ACCC, is anti-competitive.

On this logic the AFL grand final is anti-competitive because only one team can win.

If this is an indication of an ACCC keen to redefine anti-competitive behaviour, then the regulators are going to be very busy cracking down on auction houses, the record companies, film studios – indeed, anything that exclusively sells a unique product.

It’s about time that Samuel and the ACCC narrowed their focus to actual cases of market failure

Leaving aside the question of whether the ACCC has the power to act in such a matter – which arguably it doesn’t – there is the more fundamental question of why Samuel believes it is the role of government to interfere in the sale of broadcast rights to football games.

The AFL should be free to sell its own product to whoever it wants, for whatever price it wants, and under any conditions it determines. For as much as we here in Victoria might like to think otherwise, Australian rules football is not an essential commodity.

The commercial justification for the ACCC’s interference is flimsy to say the least, and if Samuel gets his way the diversity of products available to consumers could actually be reduced.

Telecommunications providers require “content”. The more material they have to broadcast the more willing customers will be to sign up. So to enhance the value of their internet broadband and mobile telephone services, companies provide extra content to subscribers – cheap legal music downloads, video rentals, movie trailers and sports.

The internet enhances the home experience of sport by increasing the content available. By bundling content with their basic internet packages, companies can offer the consumer better value.

Rather than lessening the sport available to Australians, a deal between Telstra and the AFL will provide more.

It’s about time that Samuel and the ACCC narrowed their focus to actual cases of market failure.

Why is he trying to protect us from too much sport?