KEY POINTS:
Television companies and individuals have launched scathing attacks on Sky TV in the first major review of broadcasting regulations, urging the Government to end the firm's digital broadcasting "monopoly".
The attacks came in submissions to a review of digital broadcasting and new-media content regulations being carried out by the Ministry for Culture and Heritage.
In the submissions made public yesterday, free-to-air broadcasters including TVNZ, TVWorks (which owns TV3 and C4) and Freeview were vocal in their criticism of what they said was Sky's dominance in the digital market.
They called for tighter regulations on the pay-to-view broadcaster or a change in its structure, saying the measures were necessary to enable competition and ensure Sky did not command rights to all the most in-demand programmes.
Sky, for its part, admitted that it had flourished under the current "light-handed" broadcasting regulations, but said consumers had greatly benefited from the viewing choices offered, and it opposed any new "heavy-handed" regime.
"The biggest risk from the review is that new regulations will be introduced that will have the effect of stifling investment in new platforms, services and content," Sky's submission said.
But TVNZ said a lack of marketplace rules had allowed Sky the freedom to develop a business model not seen in other countries.
It said: "Sky has been able to develop a vertically integrated business with the potential to exert considerable market power.
"That lack of marketplace rules and dominance by one player could lead to a lack of media diversity in New Zealand."
TVWorks said the current choice for viewers was "Sky or no pay TV".
It urged the Government to create competition by providing "seed funding" for additional Freeview channels, with no direct cost to the consumer.
"This would have the added benefit of creating additional interest in the Freeview platform and will allow analogue shut off to occur earlier."
Freeview, the country's first free-to-air digital television platform, said the continued growth of Sky and new digital media threatened "New Zealand's delicate broadcasting ecology".
It said Sky's subscription revenues were rising at a much faster rate than television advertising revenues, which would in time result in Sky being able to outbid all other broadcasters for premium programme rights.
"The rise of Sky as a natural and dominant monopoly and the growth of digital media mean that this laissez-faire approach is no longer possible if the Government is to achieve its stated objectives for the broadcasting sector."
Freeview advocated "asymmetric regulation" of the kind used in Britain, where regulation was applied to Sky but not to Virgin Media or Freeview, and television spectrum was allocated to terrestrial broadcasters to promote their investment in digital TV.
Individuals said Sky should not be allowed to control Prime on satellite or have a monopoly on sports coverage.
"Sky should not have all the sports channels," B. A. Arkle wrote.
"They should be FTA [free to air] (or at least some sport should be)."
Des Fox said Sky treated its customers with contempt by forcing them to pay for 40 to 50 channels with "garbage" programmes "in order to be able to briefly see a live sport broadcast".
Two-thirds of submitters to the broadcasting review agreed that change to regulations was necessary as broadcasters switched from analogue to digital TV.
The Government plans to announce a final date for analogue switch-off in 2012, or when digital television is available in 75 per cent of New Zealand households - whichever happens first.
