Optus today released its undertakings made to the ACCC as part of the Optus-Foxtel content supply arrangement.

Chris Anderson, Chief Executive of Optus said the undertakings demonstrated Optus' commitment to competition and the sustained viability of infrastructure competition in local telephony and broadband in Australia.

"In June, the ACCC stated the Optus-Foxtel content supply arrangement in its current form was likely to breach the Trade Practices Act.

"Since that time we have worked hard to modify our agreement to satisfy ACCC concerns while ensuring the deal enhances Optus' market position.

"We believe the undertakings presented today will allay concerns. The ACCC has gained remarkable, wide-spread concessions from all parties," Mr Anderson said.

"The deal is good for competition, good for our customers and good for Optus. It will help fix a structurally flawed industry and allow Optus to improve its competitive position in pay television, local loop telephony and broadband.

"The undertakings greatly improve the competitive position of the broadband and pay TV sector. The best content will be offered to third parties - which will lead to an increase in competition in the fixed customer access market.

"In addition, via the undertakings Optus is demonstrating our commitment to diverse and varied content. We will continue to acquire content independently and show channels which are exclusive to Optus.

"We have also made a specific commitment to Australian television content," he said.

"We remain confident the ACCC will approve the deal because it will allow the industry to progress and develop. It will dramatically improve our competitive position and strengthen our long-term competitive future.

"The undertakings enhance a deal that is pro-consumer and pro-competition," Mr Anderson said.

Summary of Optus key provisions and undertakings:

1. Optus will not acquire rights to shared channels on an exclusive basis.
2. Optus will amend the agreement to allow a third party to use its cable to deliver subscription television services to customers who take Optus' Access Package.
3. Optus will continue to offer at least seven channels not currently offered by Foxtel for at least three years. The channels will initially be LBC, ART, Al Jazeera, Australian Christian Channel, ABC KIDS, EXPO and CNNFN.
4. Optus will continue to offer two Optus-compiled channels for at least three years. The channels will initially be Ovation and MTV.
5. Optus will continue to independently source and show Australian drama on one of its Optus-compiled channels for at least three years. This channel will initially be the Ovation channel. Optus will maintain its current level of spending on Australian drama content on the Optus-compiled channels for three years.
6. Optus will remove the clause giving Foxtel and its shareholders first and last right of refusal should the Optus HFC cable ever be sold.

For more information:
Stephen Woodhill
Optus Corporate Affairs
Phone: +61 2 9342 7850

Backgrounder - Rationale for Undertakings

The second and sixth undertakings match undertakings from Foxtel, to vary the Foxtel-Optus deal to address ACCC concerns.

The balance of these undertakings are directed at the concerns the ACCC has raised in relation to the acquisition of pay television content.

The undertaking not to acquire the shared channels on an exclusive basis (when taken together with the undertaking in the same terms from Foxtel) addresses the ACCC's concern to prevent an increase in the concentration of control of key programming, and to prevent Foxtel acquiring an enhanced ability to lock up key programming.

The undertaking to maintain seven independent channels addresses the Commission's concern that there should not be a reduced level of independence between Optus and Foxtel in the provision of retail pay TV services; and that Optus' ability to independently determine the composition of, and to differentiate, its pay TV services should not be reduced.

The undertaking to maintain seven independent channels, and to maintain two Optus-compiled channels, addresses the Commission's concern that there should not be a reduction in competitive tension between Optus and Foxtel in relation to competition for content, and that Optus should not have diminished incentives to independently acquire pay TV content. These undertakings also address the ACCC's concerns that the deal should not give Optus diminished incentives to independently acquire pay TV content.