Tue, Feb 03, 2004 - Page 11 News List

Digital TV deal likely -- after the election

SET-TOP BOXES The government and the digital-TV industry have not been able to agree on much, but an analyst says that things may change after next month's voting

By Bill Heaney  /  STAFF REPORTER

The deadlock between government officials and the cable television industry over the roll-out of digital TV services is expected to be resolved later this month, an industry insider said yesterday.

Viewers may have to wait until after the presidential election, however, to see real progress.

The nation's three largest providers have locked horns with local governments and the television watchdog Government Information Office (GIO) over how much they can charge for new digital services and the set-top box that are needed to decode digital TV signals.

"We are involved in semi-legal actions against the Taipei City Government at present and hope to see some results later this month," Gary Tsai (蔡俊榮), a spokesman for the nation's largest cable provider, China Network Systems Co (CNS, 中嘉), told the Taipei Times yesterday.

"The bottom line is that consumers don't have to pay for the box and can rent it instead," he said.

Tsai said he is nevertheless "optimistic" for a full resolution to the dispute, especially after the presidential election next month when officials might be more willing to make changes.

Taipei City has capped the price of the digital set-top box at NT$3,500 (US$105), despite the industry's claim that each box sets them back NT$6,000.

CNS and its largest rival, Eastern Multimedia Co (EMC, 東森媒體科技), want to sell the boxes to customers at cost, or lease them.

Taipei City has said it also wants to cap the monthly rental fee of the box at NT$140.

The nation's No. 3 operator, Taiwan Broadband Corp (TBC, 台灣寬頻), does not charge customers for the box.

The industry faces other problems as well. The government has told providers to use the European DVB-C digital TV broadcast standard, but at least one of the three major players wants to stick with the US' ATSC standard.

The stalemate between the bickering parties has led to a disappointing market for digital television -- only 53,000 users in all of Taiwan, according to Hong Kong-based researcher Media Partners Asia Ltd.

"China has 200,000 digital set-top boxes, and Hong Kong 400,000," said Vivek Couto, executive director of Media Partners Asia.

"Taiwan is a much more developed market than China, which doesn't even have pay TV content," Couto said.

China does not cap the price of the set-top box, charging the equivalent of between NT$4,000 and NT$6,000 for locally-made models, and NT$24,000 for imported ones, Agence France-Presse reported yesterday.

The problem is that local governments have been permitted to set price limits on digital TV set-top boxes and limits on monthly fees in Taiwan, Couto said. The GIO has also regulated how providers can charge for new channels, saying that they cannot yet offer monthly packages, as is common in other markets like the US and Europe.

This is unacceptable to cable providers.

"The box shouldn't be the problem," Tsai said. "This is a market economy. We need to be able to charge at a point that customers can accept."

Taiwan has many premium channels, such as Home Box Office (HBO), Star TV and Cinemax, in its basic package of 80 channels, making it difficult to find channels for which viewers will pay extra.

"You can't shift HBO from the basic to a premium service, so you need new content," Couto said.

The solution is deregulation, Couto said.

"The box issue is a problem, but if it can be fixed and there is deregulation, there will be a lot more content [on Taiwan's pay TV services] from Japan and Hong Kong," he said.

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