Foxtel shelves Telstra net TV deal .

FOXTEL has scrapped a controversial plan to enter the budding internet television market through an exclusive deal with Telstra.
The move will sooth competition concerns and should make the pay-television operator's services available to all broadband customers.
It is understood Foxtel yesterday withdrew a submission to the Australian Competition and Consumer Commission seeking permission to supply video content "via the internet" through its iQ set top boxes "on the condition that the customer uses a Telstra BigPond broadband connection".
The change of heart comes at a critical juncture for Foxtel and Telstra, which face new competitive threats from internet broadcasters such as FetchTV.
It is believed that Telstra had pushed for the exclusive deal -- as a means of growing its 2.1 million-strong retail broadband customer base -- even though Foxtel did not want to limit its ability to deliver on-demand programs through a broadband tuner in iQ boxes.
However, both companies appear to be taking a more co-operative approach to internet television.
Telstra, which owns 50 per cent of Foxtel, announced late on Tuesday that Foxtel would supply 30 channels to its T-Box set-top device. Consolidated Media and News Limited, publisher of The Australian, each own 25 per cent of Foxtel.

The T-Box, a digital video recorder that will offer sports and entertainment channels, had been a source of tension, as it could crimp sales of the iQ.
Telstra's discussions with the providers of "linear channels" normally found on pay-TV services such as Foxtel also underlined the complicated relationship between the two companies.
The national broadband network will make the ownership of exclusive digital content even more important for broadband and media companies.
Foxtel's decision to withdraw its submission to the ACCC is likely to be welcomed by Telstra's rivals, which had described the proposal as an anti-competitive attempt to grow Telstra's share of the broadband market.
Optus claimed in its submission that it would "lose existing and future customers, since consumers who wish to purchase Foxtel's proposed service will have no choice but to purchase broadband services from Telstra".
Internode, iiNet and Adam Internet argued: "Our clients have no doubt that Telstra's intention is to encourage Foxtel customers that are connected to other ISPs to churn to BigPond on the basis that they will be able to download Foxtel content."
Foxtel had argued the proposed service was "likely to enhance competition" in entertainment and broadband services. It is believed Foxtel had not received any advice from the ACCC before withdrawing its proposal.
As part of the deal, Telstra would waive "certain charges" if the agreement was an exclusive one. It noted that BigPond customers would not be charged additional data download fees for using the service.
Foxtel chief executive Kim Williams has said: "Later this year we will be enabling our customers to integrate internet-delivered, on-demand television shows and programs to their TVs."