There has been a real undercurrent of discontent from people who live outside the Foxtel broadcast area wanting to get access to the Foxtel on Xbox service. So we asked Foxtel why this was the case. Here's their answer:
“FOXTEL ON XBOX is an extension of the FOXTEL service, and as a result is only available in areas that FOXTEL services (metropolitan Australia and WA). Our agreements with some channels and program providers only permit us to broadcast FOXTEL in FOXTEL areas.”
The second part is key - essentially, it's a bunch of conditions certain channels and content providers have stipulated that means Foxtel can't actually offer the service outside their broadcast area.
Will that change in the future? Potentially, as new partnership arrangements are worked out that take IPTV into account. But don't hold your breath for it to happen any time too soon...