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Japan's digital TV launch highlights Taiwan's failure

Digital broadcasting was launched by Prime Minister Junichiro Koizumi in Japan yesterday as digital services here remain mired in squabbling between government and operators, industry insiders told the Taipei Times yesterday.

The Japanese government is determined to make digital broadcast, which can deliver vivid, theater-like pictures to television screens, the nation's standard nationwide by the end of 2006.

Taiwan originally set the same deadline for its viewing public, but has been forced to push back the date to at least 2008 in the face of opposition from cable operators to what they term "over-regulation."

"We started the switch to digital in August with no problems," said Robert Ho (何吉森), digital television section chief at the Government Information Office (GIO).

More than 80 percent of Taiwanese households receive television via cable, government figures show, meaning that cable and not terrestrial or satellite broadcast is the logical choice for digital services here.

The local cable television industry plans to spend NT$40 billion on upgrading its digital services, and wants to offer channel packages or tiers like news, sports, movies, education at market prices to recoup the investment and turn a profit. It also wants to rent out set-top boxes or sell them at production cost to subscribers. But the government has nixed all these business models and has told the industry to sell boxes at below market price and offer extra channels on a one by one, or a la carte, basis.

"The government and cable operators have yet to agree on the price that can be charged for the set-top box, so the number of digital service subscribers in Taiwan has not passed 1 percent yet, which means we will not be able to reach our target of 85 percent of homes by 2006," Ho said.

Cable operators are becoming increasingly disgruntled with government interference in their business.

"The infrastructure for digital cable stations is now available, but two issues remain, namely that local governments like Taipei City insist on setting a ceiling price on the set-top box which means the operators have to take a loss, and we are now lobbying the GIO to drop the a la carte system that none of the operators want,"said Arthur Shay (謝穎青), director of the Cable Broadband Institute in Taiwan (台灣有線寬頻產業協會) which represents the three major providers in Taiwan. "These regulations are just not wise to do business. Digital services do not make money here."

"If Taiwan can be persuaded to offer tiers, more subscribers would follow," said Vivek Couto, executive director of HK-based research firm Media Partners Asia Ltd.

"If the three major providers could rent out boxes and put on new channels that are really premium, then there is more chance digital can take off," Couto said.

The US, which launched digital in 1998, already has 20 million digital subscribers because it has a de-regulated system and free competition, Couto said. Japan has the potential for 12 million viewers, the Associated Press said yesterday, and also enjoys a relatively free business environment.

In contrast, digital services have stalled in strict regulatory environments like South Korea and Taiwan.
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