Eye on Sky links with Telecom in UFB age

The Sky Television. Photo / Kenny Rodger

A break-up of Telecom may ease the relationship between the dominant telco and Sky Television - both companies that have done well from National's communications policy.

Last week Telecom's networks arm Chorus emerged a big winner in the ultra-fast broadband (UFB) plan - an initiative that will open the door to more internet television.

But the telco is still tightlipped about the role of its retail arm in internet TV after the split.

There will be close scrutiny of how Telecom Retail's relationship develops with Sky TV in the new era.

Sky owns a large proportion of the internet rights to programming, and the Government has said it opposes any regulation of its content.

But one of Sky's rivals, TelstraClear, has raised alarm bells that Sky's unregulated role in content will reduce competition and demand for UFB.

Telecom and Sky yesterday announced a three-year deal allowing Telecom to on-sell services as part of packages to customers.

This will allow more options for deals and does not make a significant change to the interface between the dominant telco and the broadcaster.

Internet television has been shown to be the engine for uptake of ultra-fast broadband overseas.

The next step may be broadband packages from Telecom letting people download movie and TV programmes without going over data limits under standard broadband deals.

Arch-rival Vodafone has signed an uncapped data deal linked with Sky's fledgling internet TV service iSky.

But Telecom has never reached a deal on uncapped data for iSky.

That may have been because of Telecom's partnership with the rival TiVo whose Australian rights were jointly held by TVNZ and the Australian Seven Network.

TiVo allowed downloads of paid content in the same way as iSky.

But it has been a marketing disaster and a big disappointment to Telecom.

When Paul Reynolds took over as Telecom chief executive he abandoned its substantial investment in new media ventures.

Its approach to internet TV through TiVo has been half-hearted.

Telecom insists it has not abandoned TiVo.

But it must be looking to Sky as a player that has the inside running for internet TV.

Sky Television chief executive John Fellet said it was up to Telecom whether it took up the option of an uncapped broadband deal with Sky.