Shadow Communications Minister Malcolm Turnbull has sought to dismiss a "conspiracy theory" suggesting that Rupert Murdoch has set his media outlets in Australia against the Labor government because the AU$37.4 billion National Broadband Network (NBN) is a perceived threat to Foxtel.
The theory, which has been floated on Twitter and a number of blogs for several months, made its way into the Sunday Herald yesterday, with columnist Paul Sheehan suggesting that the NBN is "a threat to the business model" of Foxtel, which is jointly owned by Telstra and News Corporation.
Sheehan said that the Coalition's alternative, which would scale back the fibre-to-the-premises network to a majority fibre-to-the-node network, is preferred by Murdoch.
Turnbull struck back in a blog post yesterday, labelling Sheehan's article as "quite misconceived", and saying that the threat the internet poses to Foxtel depends on access to fast broadband, something that he claimed the Coalition would be able to deliver to all Australians by 2016, well before Labor's proposed completion date of June 2021.
He said that Foxtel's greatest threat, Netflix, would only require 6Mbps speeds in order to stream HD video, significantly less than the 25Mbps minimum the Coalition is promising under its policy.
"[Murdoch] would be better off backing Labor's NBN, because he knows that not only will the day of ubiquitous very fast broadband be delayed for many years, even decades, it will also be available at a much higher cost," Turnbull said.
"The Coalition's plan for the NBN will bring the day of reckoning much sooner."
The theory also counters Foxtel's recent efforts to get into IPTV. Last week, the company, which allows customers to subscribe to the service on a month-to-month basis, and access it through their PC, Mac, Xbox 360, or Samsung smart TV.
Foxtel's director of product Michael Ivanchenkothat the company is even holding off on offering HD streams until broadband speeds in Australia have improved.