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The pay-TV sector called the government's decision to cut the licence fees of commercial free-to-air (FTA) networks' anti-competitive. 

Senator Conroy will reduce the license fees that the big commercial TV networks pay by 33 per cent in 2010 and a much higher 50 per cent in 2011. Current license fees are currently computed at 9 per cent of advertising gross revenue.

In defending the move, Senator Conroy claims that the reduction of fees is necessary to enable the commercial networks (Seven, Nine and Ten) to meet the requirement for Australian content in 55 per cent of their shows from 6am to midnight. 

He also said that the commercial networks’ shift to digital from analog television means additional costs. 

The decision has angered pay-TV providers which said that FTA networks are already beneficiaries of excessive government assistance.

Petra Buchanan, the chief executive of the Australian Subscription Television and Radio Association (ASTRA), described the announcement of Communications Minister Stephen Conroy as disappointing. She added that the move was designed mainly to support “under threat” business models.  

Ms Buchanan represents pay-TV companies Optus, Foxtel, and Austar. She said that in supporting the FTAs, the taxpayers are actually subsidising the foreign-owned broadcasters.  

The majority of Nine Network foreign owned while half of Seven Network is foreign owned.

Another government protection for FTA networks is the anti-siphoning sports list. This allows the FTA networks to have first rights in bidding for certain popular sports.

Senator Conroy also said that Australian networks are charged with higher licence fees compared to networks overseas.