ABC hangs up on Telstra

The $67 million online content deal between Telstra and the ABC has been called off following a surprise change of tack by the ABC last week.

According to Telstra spokesman Stuart Gray, the ABC "significantly" and suddenly changed the terms of the agreement after eight months of negotiations between the organisations.

The deal, which was expected to be finalised last Friday, was cancelled on Thursday night following two days of failed meetings.

Gray said Telstra had " no idea" the ABC intended to change the agreement. "We anticipated the deal would go ahead," he said.

In the original terms of the agreement, the ABC was to provide news content, including, radio, print, television and online material, to Telstra for non-exclusive use in a deal worth $13.5 million a year for five years. However, "they (the ABC) wanted to significantly reduce the content", Gray claimed.

The new arrangements were not a viable option for Telstra, he said.

Telstra has already removed the ABC logo from its home page.

Jonathon Shier, ABC's managing director, said the ABC did not believe the agreement recognised the value of the broadcaster's content.

"Despite our best endeavours to reach an acceptable arrangement, in accordance with the parameters agreed by the ABC board, we reached an impasse on some fundamental issues," he said.

"The obligations that would have been imposed on the ABC by Telstra, the cost of servicing the deal and the fact that it did not sufficiently recognise the value of the ABC's breadth were, in the end, the critical issues for the ABC," Shier said.

A spokesperson from the ABC would not comment on whether the ABC would seek an alternative online partner.

ABC already has online news content partnerships with 10 other organisations, including America Online, Yahoo, Excite and Ninemsn.

Meanwhile, Gray said that at this stage Telstra has no other specific news content deals in the pipeline, "but we do have a number (of deals) on the go at any one time", he said.

"Because the ABC deal just fell through, we haven't had a chance to think about what we are going to do."

News content on Telstra's website is currently provided by AAP. The nature of this agreement is unknown.

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