HBO sends letter to competition office

“We did receive a letter from HBO, but it’s only natural that media companies express their views on the merger. Sometimes we even get protests against the mergers we analyze.”
By : Anna Kocińska

   Home Box Office (HBO), one of the world’s biggest pay-TV stations, has filed a letter to the Polish Office for Competition and Consumer Protection (UOKiK) in which it is rumored to have discussed how the merger of digital platforms Wizja TV and Cyfra+ will impact the pay-TV market, the Business Journal has learned.

   HBO, which is part of the AOL Time Warner media group, has been in Poland since 1996 and is available through cable TV networks and via the Wizja TV digital platform, owned by Amsterdam-based United Pan-Europe Communications (UPC).

   Last month UPC merged its platform with Cyfra+, a subsidiary of France’s Vivendi Universal, with the aim of reducing the companies’ losses through a combined subscriber base. Before the deal can be finalized, however, it first has to be approved by the UOKiK.

   According to Iwona Zaczek, UOKiK spokeswoman, the office considers all comments or grievences that media companies may have. “We did receive a letter from HBO, but it’s only natural that media companies express their views on the merger,” she said. “Sometimes we even get protests against the mergers we analyze.” So far TV broadcasters, cable operators and market watchers have said the merger of Poland’s top two digital platforms would not hinder competition and that viewers would only benefit from the deal. “Apart from HBO, no other company has filed a letter stating its opinion on the merger,” Zaczek said.

   HBO refused to comment on the contents of the letter last week. “The (letter we filed) is currently in the midst of administrative review,” said Phil Roter, chief executive officer for HBO in Central and Eastern Europe. “(And) it’s inappropriate for us to make any comments until this review is complete.”

   Zaczek was also tight-lipped about the nature of the letter. However, according to one industry source, HBO may be concerned that the merger could lead to a “content monopoly” on the pay-TV market, which in the long run would not benefit customers. “But they are not trying to block or delay the merger,” the source added. “Rather, it’s a message for Canal+: Let’s make a decent deal.”

   Despite claims by Canal+ that the role of HBO in the merged platform would be similar to other pay channels, some market observers said HBO’s days on the platform are numbered. Meanwhile, Jakub Brzeczkowski, chief operation officer of Canal+, said he had no knowledge of the letter or its contents. Nevertheless, he was unconcerned that HBO had approached the UOKiK. “We are talking to HBO about our future cooperation on the new (digital) platform,” he said. “And HBO will become part of the new platform. The merger will only benefit HBO because they will be able to double their potential customer base. If there are any doubts (about their position on the merged platform) we will very soon dispel them.”

   Marek Sowa, vice president of corporate affairs at UPC Polska, refused to comment on the letter. “But I’d like to recall what was communicated at the time when the merger was announced that HBO has a place on the merged platform,” he said.

   Other market insiders last week said the news of the letter confused them. “I don’t know what this letter is about but if someone sends such a document to the regulatory office it means that he thinks his interests are threatened,” said Andrzej Ostrowski, chairman of the National Cable Communication Chamber (OIGKK), which supports the platform merger. “On the other hand, I’ve heard that HBO will be available on the new platform.”

   HBO’s letter wasn’t the only piece of news last week that could have an effect on whether the UOKiK’s approves the merger. Tadeusz Aziewicz, the office’s president, was dismissed last Thursday due to a technicality in a law that came into force last April. He had been UOKiK’s president since January 1998. Last week Prime Minister Jerzy Buzek appointed Andrzej Cezary Banasiński, lawyer and deputy minister in the Office of European Integration Committee (UKIE), to replace Aziewicz. According to market sources, Aziewicz had been close to granting approval for the merger. “The fact that we’ll have a new president shouldn’t have any impact on the ongoing approval process,” Zaczek said.

   Canal+’s Brzeczkowski was unfazed by the news of Aziewicz’s leaving. “Let’s leave the regulatory office in peace,” he said. “They have work to do. The approval process is already pretty advanced and we’ve met with supportive opinions about the merger from the media market.”