Information Circular - MDA's Decision on Singnet Pte Ltd's Application for Exemption from Cross-Carrying Certain Channel Packages Containing Premier League Seasons 2016/2019 Content

Dated: 10 June 2016

Background

1. On 28 March 2016, SingNet notified the Media Development Authority of Singapore ("MDA") that the broadcast rights obtained by SingNet for the Premier League Seasons 2016/2017 to 2018/2019 ("PL Content") constitutes Qualified Content under the Media Market Conduct Code ("Code").

2. In April and May 2016, SingNet submitted its applications for exemption of its obligation under Paragraph 2.7 of the Code from cross-carrying certain channel packages containing both PL Content and other non-PL Content ("Other Content") (referred collectively as the "PL Bundles"). SingNet would only cross-carry the channel package containing solely the PL Content ("Standalone PL") on every Receiving Qualified Licensee's ("RQL") Relevant Platform(s) ("Exemption Applications").

3. SingNet submitted that "an exemption is warranted" for the following reasons:

1. An exemption "will benefit the public and media industry (e.g. enhance consumer welfare)"; and

2. An exemption "will fulfil the test in Section 2.7.4 (a) (i) of the Code for granting an exemption".

4. On 3 June 2016, MDA issued its decision in relation to the Exemption Applications to SingNet (the “Decision”). This Industry Circular sets out MDA’s considerations to the Decision.

MDA’s Considerations

5. Public Interest. MDA notes that an exemption request under Paragraph 2.7.4 (a) (i) of the Code requires that the requesting Regulated Person establish to MDA's satisfaction that an exemption "will benefit the public and media industry". In this regard, MDA considered that:

1. The availability of the PL Bundles, in addition to the Standalone PL, would allow SingNet to reap economies of scale, resulting in lower prices for all subscribers regardless of the platform they are accessing the PL Content;

2. Cross-carrying a high number of duplicative channels in the PL Bundles to the StarHub Cable Vision's platform offering similar content is likely to result in consumer confusion and dissatisfaction; and

3. It would be in consumers' interest to have the option to purchase the Standalone PL on either the SingNet platform or the RQL's Relevant Platform(s).

6. MDA also considered SingNet's representation that SingNet is not discriminating against subscribers on the RQL's Relevant Platform(s) in favour of subscribers on the SingNet platform in that:

1. The Standalone PL pricing was not discriminatory to subscribers on RQL's Relevant Platform(s), in that the revenue from the PL Content would not be used to subsidise Other Content in the [PL Bundles], as the direct cost of providing the PL Content to PL subscribers could not be fully recovered from the revenue"; and

2. The cost savings from economies of scale due to the [PL Bundles] would be applied to all PL subscribers, regardless of the platform of access, resulting in a lower subscription price for the Standalone PL for all consumers, as compared to a higher subscription price for the Standalone PL should the exemption not be granted." MDA has noted that bundling has generally been accepted as the operating model of the pay TV industry, including SCV.

7. In consideration of the above, MDA is of the view that public interest would be served by allowing SingNet to offer only the Standalone PL for cross-carriage.

MDA's Decision

8. Having assessed SingNet's Exemption Applications, MDA is satisfied that SingNet has established that an exemption from the obligations under Paragraph 2.7 of the Code will benefit the public and the media industry. By way of the Decision, MDA exempts SingNet from making available the PL Bundles for transmission and reception to customer and business customers on every RQL's Relevant Platform(s) under Paragraph 2.7.4 (a) (i) of the Code (read with Paragraph 1.8.1 of the Code)(the "Exemption"), subject to the following conditions:

1. SingNet is required to seek MDA's consent in the event it wishes to make any changes to the Standalone PL and PL Bundles.  In this regard, SingNet is required to notify subscribers one month prior to the changes to the packages, and notify MDA seven (7) days prior to notifying the subscribers; and

2. MDA reserves the right to review the Exemption annually, including the right to vary and/or withdraw the Exemption, as well as to vary and/or impose additional conditions in relation to the Exemption.

9. In addition, MDA's decision as described in MDA's 17 February 2016 Information Circular ^[i] for assessment of exemption applications in respect of adding new channels to the PL Bundles and the offering of free preview of non-PL content to subscribers of PL Bundles on the Singtel TV platform shall continue to apply.

10. The PL Bundles that SingNet is exempted from the cross-carriage obligation shall be announced by SingNet.

11. Nothing in MDA's Decision shall preclude MDA from withdrawing or varying the Exemption granted, if it has reasonable grounds to believe that:

1. the information on which the Exemption is based was incomplete, false or misleading in a material particular; or

2. SingNet is unable to successfully implement cross-carriage by the start of the PL Season 2016/2017 or that SingNet is not carrying out its obligations to implement the cross-carriage of the BPL Content in good faith.

12. Any queries on this industry circular may be addressed to:

    The Media Development Authority of Singapore
    Attn: Ms Lee Ee Jia, Director (Policy)
    Email: Lee_ee_jia@imda.gov.sg