KEY POINTS:
Sky TV will delay putting its free-to-air Prime television station onto the new Freeview digital service in what critics say is an attempt to slow uptake of the service.
Freeview believes Sky is back-sliding on earlier indications it would join Freeview for the launch of the terrestrial digital
free-to-air service in March 2008.
It also says that Sky is stalling Prime to slow the sign-up for Freeview.
Once viewers have taken up the Freeview service, which has plans for more free channels, it would be harder for Sky to sign them up as subscribers. Sky is in 44.5 per cent of homes, with 711,000 subscribers.
Sky is being asked to pay to get Prime onto Freeview, but if Freeview was successful it would eat into the number of new Sky subscribers.
Freeview - a non-profit consortium of TVNZ, MediaWorks and Maori TV - launched its digital satellite service in July, ending Sky TV's digital TV monopoly. So far it has sold around 44,000 set top boxes which allow access to digital signals of free-to-air channels and new channels planned for the future.
Sky TV is the only pay TV monopoly in the world allowed to own a free-to-air channel, and TV3 owners and Freeview member MediaWorks says Sky is abusing its power.
MediaWorks television chief operating officer Rick Friesen said other countries would require Prime to be on Freeview, which will be the source for free-to-air once analogue televisions are switched off, probably about 10 years from now.
Sky's attitude would slow Freeview and showed New Zealand television was under-regulated, said Friesen.
"Clearly it using delaying tactics, and this is an abuse of its monopolistic position, to the disadvantage of New Zealand viewers," he said.
But Sky Television chief executive John Fellet insisted he supported Freeview.
"We always said Prime would join Freeview when it made economic sense and on our estimates that is when it reaches 10 per cent penetration," he said.
"Putting Prime on Freeview would cost us $2.5 million. Unlike TVNZ and MediaWorks we are not partners in Freeview and we do not get free capacity or money from the Government for channels like TVNZ."
Freeview general manager Steve Browning said Freeview was challenging Sky's digital TV monopoly and inevitably that had led to "a platform war" between Freeview and Sky.
Browning said that the first battle had been fought when Freeview launched and Sky informed independent contractors who installed its set-top boxes and satellite dishes that they could not install Freeview. Sky insists its restrictions were simply ensuring that it had enough contractors to maintain a service to its subscribers.
FREE FOR ALL
*Freeview's satellite service launched in July, ending Sky TV's digital TV monopoly.
*The new terrestrial Freeview service broadcasting from hilltops is due to begin in March 2008.
*Freeview says Sky indicated Prime would join for the terrestrial start-up.
*This week Sky says Prime will join when Freeview is in 10 per cent of homes.
*The delay will slow uptake for Freeview and reduce its potential impact on Sky.
*Sky has around 711,000 subscribers and is in 44 per cent of homes. Freeview estimates its satellite-based service has 44,000 or around 2.7 per cent.