Mediaworks and TelstraClear say a draft report issued by the Commerce Commission last month into the factors that may inhibit demand for ultrafast broadband was all talk and no action on the key issue of the availability of "content", such as online television.

But Sky Television said in its just-filed submission on the report that more choice was on the way for consumers.

It dropped further hints that it expected United States online television service Netflix to launch in New Zealand imminently and also pointed to the possible launch of an online film service developed by Amazon.

There had been expectations the commission might signal in the draft report that it had an appetite for regulating the pay-television industry to give Sky's competitors a leg-up using ultrafast broadband to launch rival services.

However, the dangers for Sky have moved into a separate Commerce Act investigation, announced last month, that will consider whether Sky's contracts with programme suppliers and internet providers breach competition law.

TelstraClear said in its submission on the draft report that it could not launch an attractive pay-television offering of its own over ultrafast broadband without offering live sports.

Any service without live sports would be "marginal, of limited appeal", it said. It is the first time TelstraClear has been quite that explicit.

"Effective action is required now to ensure that the barriers to fair competition... do not fatally undermine consumers' incentives to shift to high-speed broadband services," it said.

TV3-owner MediaWorks also said in its submission that it supported a commission finding that "video" would be the main driver of consumer demand for ultrafast broadband, but was disappointed it did no more than state "in general terms that other agencies may need to consider the issues".

"The commission has essentially ruled out taking further action itself even though, as we read the draft, it believes that significant issues remain," it said.

"There is no explanation of why the commission decided not to continue further work."

TelstraClear said the "strong implication" of the draft report was that further work was required, for example to ensure "fair and competitive access to content".

It said it was unfortunate the report made no recommendations or described what it thought "other parties should actually do".

Sky said it broadly supported the draft report's provisional findings, but did not believe "video' was the be-all and end-all for consumers with regard to UFB.

It said it expected more players to join Australia's Quickflix in offering online television services in New Zealand. "Sky anticipates the imminent entry of other major international players into the New Zealand market," it said.

Though it did not explicitly say these included Netflix, it went on to discuss the company and Amazon-owned online film service LoveFilm and their potential to "affect competition significantly".

Sky anticipated "further fracturing of the online content market, driven by tech-savvy consumers who will become increasingly adept at accessing and gaining value from a variety of content and service offerings", it said.

- © Fairfax NZ News

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