Sky TV and the telcos: Does the ComCom have oversight of Video on Demand?

Submissions on the Telecommunications Development Levy debate whether Sky TV should be liable to contribute

Does the telecommunications comissioner already have oversight of Video on Demand (VOD) services?

A discussion as to whether VOD services fall under the purview of telecommunications law or broadcasting law, forms part of submissions on the Telecommunications Development Levy (TDL). The TDL will replace the TSO and fund the rollout of the Rural Broadband Initiative.

In its discussion document the Commerce Commission names Sky Network Television as “possibly a qualifying liable person” to contribute to the levy. It cites its reasons for including providers of VOD services as follows:

“Telecommunications is defined in the Act as excluding any conveyance that constitutes broadcasting. Broadcasting is defined in the Broadcasting Act 1989 as the transmission of programmes for reception by the public by means of a broadcasting receiving apparatus and expressly excludes any transmission of programmes made on the demand of a particular person for reception only by that person. Therefore, the delivery of VOD programming falls outside the definition of “broadcasting” in the Broadcasting Act and fits within the definition of “telecommunications” and “telecommunications services” under the Act.”

But in its submission to the TDL paper, Sky TV disputes that VOD is a telco service.

“The Discussion Paper states however, and SKY accepts, that VOD is not broadcasting,” says Sky. “The Discussion Paper then goes on to conclude that VOD is a telecommunication service. This is not necessarily the case... VOD still has to come within the definition of ‘telecommunication’ in order to be subject to the Telecommunications Act.”

Sky TV’s submission then goes on to suggest that the broad interpretation applied by the Commission could capture online media companies, even Trade Me.

Sky TV says it provides its iSky service by means of a Public Data Network provided by Orcon, another ISP or telco. “Sky’s content is first delivered through a data circuit supplied by Orcon into Orcon’s Content Delivery Network (CDN). The CDN is owned and operated by Orcon.”

Orcon’s parent company, the state owned enterprise Kordia, takes a different view in its submission, although it avoids mentioning Sky TV by name.

Kordia says that VOD has to be considered a telco service, because while the Broadcasting Act covers linear services, the Telecommunications Act covers non-linear services. “It would not have been intended that content would fall outside the regulatory framework of both Acts,” the Kordia submission says.

And, Telecom – the ISP that has a 53 percent retail market share of broadband connections – agrees, in its cross-submission. “Kordia also considers that VOD and online services are telecommunications services for the purposes of the Act. We agree with the Kordia approach that ensures the Act and levy remain effective in the light of technology change and market convergence,” the Telecom submission reads.

*This is the second article in a series about Sky TV and its relationship to telecommunications in New Zealand that will run this week. Tomorrow we examine the contracts between Sky TV and ISPs.

See also: Is there a case for content becoming a telco service?, What is in the contracts between ISPs and Sky TV?, TelstraClear boss tackles content issues and How will copyright notices, datacaps and peering affect content delivery?

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