But which box?

TVNZ CEO Rick Ellis says it's too early to reveal what set-top box the new venture will tout -- but don't hold your breath for a box that gets Sky services too.

TVNZ CEO Rick Ellis says it's too early to reveal what set-top box the new venture will tout – but don't hold your breath for a box that gets Sky services too.

Short of a major change of direction, the joint venture will base its digital interactive services on the same software platform as Sky – Open TV, which was licensed by Telstra Saturn's Australian sibling Austar last year.

Austar is currently phasing out its old Pace Micro decoders in favour of new boxes made by the Taiwanese company Advanced Digital Broadcast.

Austar also offers online games created by the UK company Two Way TV, which is owned by the Hilton Group (owner of the Ladbroke's betting shop chain) and NTL, the pan-European cable company that was TVNZ's original choice of partner for the move to digital.

NTL in turn is largely owned by the same company as Saturn, Austar and Chello – the US-based United GlobalCom (UGC). US cable pioneer John Malone's Liberty Media Group last year took a $500 million, 14.5% stake in UGC, as part of a deal which saw it immediately assign half the shares to Microsoft, which is developing its own digital TV platform.

Sky is currently struggling to make even basic OpenTV services work reliably on the Pace Micro boxes it uses, and full internet access via Sky's network looks a long way off, if it happens at all. As was the case with the NTL proposal, TVNZ and Telstra Saturn will be looking to compete against Sky's big-ticket sports content with a range of enhanced services.

TVNZ CEO Rick Ellis emphasised that content provisions under the new venture were non-exclusive, and that the state broadcaster was free to provide content via other networks. Sky CEO Nate Smith yesterday took that as an offer of TV One and TV2 for broadcast via Sky's network, but it may not be that simple.

"We argued very strongly to the telecommunications inquiry for open access – and this exactly what this arrangement represents," said Ellis. "Telstra Saturn will assist us in sourcing set-top boxes, which we, or other free-to-air players of government agencies would then have access to distribute in whatever way they feel is most appropriate."

Telstra Saturn CEO Jack Matthews pointed to Austar, which carries both the Optus and Foxtel pay TV services, as an example of how viewers could get all digital TV services through one box.

But Austar has only been able to license that programming because it serves Australia's regions, where Optus and Foxtel's cable services do not go. Foxtel is thought likely to withdraw its coverage of AFL games from Austar's bundle as Austar turns its attention to city customers. The face-off there – News Corporation versus UGC – which also exists in Europe is now to be replicated in New Zealand.

In the end, a common box is unlikely because even if two or more broadcasters can agree on a common conditional access system – and that hasn't happened in any other market – control of the box, and the billing relationship and customer data that come with it, is still the name of the game in digital TV.

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