Australian Prime Minister Questions Murdoch’s Opposition to Broadband Network

Media mogul Rupert Murdoch

The war of words between the News Corp chairman and the Australian government also escalated over newspaper ownership issues.

SYDNEY – Australian pay TV giant Foxtel has moved to clarify the company’s position on its broadband rollout Down Under, while News Corp Australia aimed to correct commentary about the scale of its newspaper business here, as the war of words between Labor Prime Minister Kevin Rudd and News Corp chair Rupert Murdoch escalated on day two of the federal election campaign.

Tuesday’s spat -- which followed the dramatic Monday headline in the News Corp owned Daily Telegraph stating, “Kick This Mob Out,” aimed at the Rudd-led Labor government -- centered on the effectiveness of the multi-billion dollar National Broadband Network (NBN), which is currently being rolled out, with Murdoch tweeting, “Oz politics! We all like ideal of NBN, especially perfect for Foxtel. But first how can it be financed in present situation?”

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That brought a swift Twitter response from Deputy Prime Minister Anthony Albanese,” @rupertmurdoch our #NBN plan will deliver affordable high speed broadband to every home and business and produce a solid rate of return.”

And Prime Minister Kevin Rudd told journalists it was clear that Murdoch was against the NBN.

“He’s made it fairly clear he would like to give us the old heave-ho and get his mate Mr. Abbott in,” Rudd said in Brisbane, referring to his electoral rival. 

“It’s a free country. Mr. Murdoch is entitled to his point of view," Rudd continued. "He says we can’t afford a national broadband network which delivers fiber to the home and fiber to the business premises. Remarkably it seems to be the same policy as Mr. Abbott’s. It’s a strange coincidence there.”

"The bottom line is, it is for others to ask the question why Mr. Murdoch really doesn't want the NBN to be connected to everyone's home, and everyone's small business premises," he added. "Does he sense that it represents a commercial challenge to Foxtel, which is a major cash cow for his company, or not? It's a free country, he is entitled to those views," Rudd added. "I am sure he sees it with crystal-clear clarity all the way from the United States."

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The opposition Liberal-National party coalition is planning a, cheaper fiber-to-node based network, with faster rollout, a policy which the Murdoch media here clearly supports. Indeed the opposition's broadband policy launch took place several months ago at the new state of the art headquarters of Fox Sports Australia, owned by News Corp Australia.

In response to Rudd’s statements, Foxtel, half owned by telco Telstra Corp with News, said in a statement, without directly mentioning the NBN, that the company “welcomes the deployment of broadband networks in Australia.”

 “Better broadband will improve Foxtel’s ability to reach new customers and offer new services,” the company added. It said current broadband deployment supports Foxtel’s current IPTV service launch and its Foxtel Go mobile offering.  

Foxtel noted that “even without government intervention, these networks would have developed and expanded. If government action improves in the reach and quality of broadband networks, or ensures that they are deployed more quickly, Foxtel will benefit by being able to offer products such as Go and Play to more Australians.” Its competitors and new entrants to the market would also benefit, it said.

“Just as Foxtel created competition for the incumbent free to air broadcasters and redefined the television market in Australia, broadband delivery will, overtime, further reshape the media in ways that will be beneficial to consumers,” the company said.

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And while Foxtel was clarifying its position on broadband, News Corp Australia moved to correct reports, including statements from the Prime Minister today, that the company has a market share of 70 percent of the newspapers published in Australia.

A News Corp spokesman said that “News Corp Australia owns or co-owns 33 percent of all ABC and CAB audited newspapers in Australia, giving it a 59 percent share of newspaper circulation.”

“All of this ignores television, radio and the myriad of online news sources which offer a more diversity in opinion than at any time in history,” the company spokesman added.