Govt stands its ground on cross-carriage

But pay-TV operators to get more time to implement sharing of exclusive content

The authorities here look set to press ahead with a controversial mandate that compels pay-TV operators to share exclusive programming – despite widespread protests from content suppliers. However, the government has decided to delay the implementation of the policy by up to nine months to give the media industry more time to adjust to the new regime.

The extension was granted by the Media Development Authority (MDA) of Singapore after it carried out a two-month public consultation exercise to obtain feedback on its new cross-carriage policy.

Under the MDA ruling, pay-TV companies must allow competitors to carry exclusive programming they acquire after March 12 this year.

The aim is to tackle the content fragmentation that has started to surface in the local pay-TV market as evidenced by the bitter Barclays Premier League (BPL) tussle between Singapore Telecommunications and StarHub last year.

Exclusive programmes acquired after March 12 were supposed to be extended to other players from this month, but the effective date has now been pushed back to the first half of 2011. This means that if SingTel decides to strike another exclusive deal during the next bidding cycle for the BPL in three year’s time, all matches will have to be made available on StarHub’s cable television channels as well.

As a result, consumers will avoid the pain of forking out additional registration fees, or suffer the inconvenience of having two set-top boxes in their living rooms.

‘We (MDA) do believe fundamentally that wider distribution (of content) will help (the industry). This is the right, the best measure for the market,’ said MDA’s deputy chief executive Michael Yap.

Early results show MDA’s contentious move is already starting to deliver its intended effect. In the six months since the policy was unveiled on March 12, StarHub and SingTel have not signed any exclusive contract, Mr Yap told reporters at a briefing yesterday.

Despite MDA’s claim, the new measure has split public opinion down the middle since its introduction. Consumers and pay-TV outsiders such as M1 clearly welcomed the move as it opens the door to lower subscriptions and new revenue streams.

But content suppliers and a regional media association balked at the MDA mandate as it could complicate business models and slash revenue. This is because pay-TV companies may be reluctant to pay top dollar for premium content such as the BPL after losing the exclusivity trump card.

In May, the Cable & Satellite Broadcasting Association of Asia (Casbaa) launched a rare tirade against the Singapore authorities, accusing MDA of violating international trade agreements through the cross-carriage mandate.

It even said the move could harm Singapore’s economic interests in the long run as investments in the local media scene could dry up. Casbaa represents around 130 of the biggest media companies in the region, including content bigwigs such as Sony Pictures, Fox International Channels, HBO Asia and NBC Universal Global Networks.

In the same month, Casbaa also submitted its official response in the first MDA consultation exercise, along with 18 other organisations.

Content suppliers made up the majority of these respondents, including companies such as HBO, Discovery Asia, Disney-ABC and sports marketing agencies Sportfive and the World Sport Group.

Licensing complications, revenue-sharing and billing complexities were among the major concerns raised by the companies.

In response, MDA has moved to address some of these issues by launching a second round of public consultation yesterday.

As part of this exercise, the regulator shed more light on the types of content that will be affected by the cross-carriage ruling, along with clarifications on a host of other topics ranging from ensuing billing arrangements to service standards.

Only pay-TV programmes on mainstream services such as cable television and SingTel’s mio TV platform are affected. Content that is acquired for broadcast over emerging platforms such as interactive Web TV will not be affected by cross carriage, Mr Yap revealed. The company that acquires exclusive programming will also bill customers directly, including those who view this content through rival platforms.

In addition, if an exclusive programme is bundled as part of a group, the entire group will have to be extended to other pay-TV players, Mr Yap said.

A SingTel spokeswoman said this requirement will ‘level the playing field’ in the local pay-TV sector. ‘SingTel will review MDA’s preliminary positions and provide constructive and positive feedback for its consideration,’ she added.

Rival StarHub continues to stand behind the government’s new policy and said it will work out implementation details with all relevant parties.

When contacted, Casbaa declined to comment directly on MDA’s cross-carriage updates, saying it ‘needs time to digest and consult’ members before taking a formal position. MDA’s second consultation exercise closes on Sept 28 and the regulator will issue a final decision on cross carriage by the end of this year.

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