Murdoch Seeking to ‘Get Rid of’ Australian Government, Rudd Says

News Corp. Chairman Rupert Murdoch is determined to remove Australia’s Labor government and may see a state-owned high speed broadband network as a threat to his Foxtel cable television venture, Prime Minister Kevin Rudd said.

Murdoch and opposition leader Tony Abbott have a “strange coincidence” of views on the network being built by government-owned NBN Co., Rudd told reporters in Brisbane today. “Does he sense it represents a commercial challenge to Foxtel, which is a major cash cow for his company?” he asked.

Rudd is facing criticism from News Corp.-owned newspapers ahead of a Sept. 7 election that will decide whether the country backs the government’s NBN proposal or a cheaper, lower-speed model proposed by the opposition. The Daily Telegraph, Sydney’s biggest-selling newspaper, urged readers to “Kick This Mob Out” in a front-page editorial yesterday, while the Australian, a national broadsheet, wrote in an editorial that the government’s defence of its economic record “verges on the delusional”.

“He doesn’t really like us and would like to give us the heave to, and would like to get rid of us and get his mate Mr. Abbott in,” said Rudd, according to a transcript e-mailed by the Labor party.

“Any suggestion that the editorial position of our newspapers is based upon the commercial interests of Foxtel demonstrates a complete ignorance of both our business and of Foxtel,” Stephen Browning, a spokesman for News Corp.’s local unit, said in an e-mailed statement. “The general News business would benefit from faster national broadband speeds and Foxtel will benefit as it will be able to offer more choice and new services.”

Foxtel, a joint venture held 50:50 between News Corp. and Australia’s largest phone company Telstra Corp., has a “near-monopoly” on subscription television in Australia, according to the country’s antitrust regulator.

Its earnings before interest, tax, depreciation and amortization of $675 million in the nine months ended March were greater than the $558 million recorded by News Corp. businesses spun off from more-profitable television and film units that now form Twenty-First Century Fox Inc., according to a company filing. Those earnings aren’t counted as News Corp.’s since it doesn’t control Foxtel, according to the filing.

On his Twitter Inc. feed yesterday, Murdoch questioned whether the government’s broadband plan was affordable.

“We all like ideal of NBN, especially perfect for Foxtel. But first how can it be financed in present situation?” he wrote, in his first published comment on Australian politics since Rudd called the election Aug. 4.

Bloomberg LP competes with News Corp. units in the market for financial information services.

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