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Chunghwa worried over TV law

Models eat at a McDonald's restaurant while surfing the Internet. McDonald's in Taiwan has joined up with Chunghwa Telecom to provide wireless Internet access at 346 fastfood outlets around the nation. PHOTO: CHEN TSE-MIN, TAIPEI TIMES

Chunghwa Telecom Co (中華電信) yesterday called on the government to think twice about revoking permission to air television programs over the Internet using its multimedia-on-demand (MOD) service.

Chunghwa, the nation's biggest telecommunication service operator, received approval last year under new telecommunications laws, in particular Article 2 of the Broadcasting and Television Law (廣播電視法), to deliver pay TV services over its broadband telecommunications lines.

Government approval saw Chunghwa Telecom become the first local telecoms operator to tap into the multimedia TV business in search of new revenue growth.

The company is still largely controlled by the Ministry of Transportation and Communications (MOTC). Since the government had intended to free the local media and TV operators from political influence by yesterday, as stipulated by the amendments to Article 19 of the law, Chunghwa Telecom could fall foul of the legislation, forcing it to either terminate its TV business or face penalties from the government.

"We got the license to offer TV programs on the Internet because the government was encouraging telecom operators to diversify their businesses. It makes no sense now to request that Chunghwa Telecom exit the market," company chairman Hochen-tan (賀陳旦) said.

"We hope there is room for further discussion with the government," he said at a press briefing yesterday, while introducing a new partnership with fast-food giant McDonald's to increase the number of wireless hot spots around the nation from 607 to 953.

Some commentators had suggested earlier that the company sell all of its shares still owned by government agencies such as the MOTC and privatize all of its businesses to avoid violating the law. But it appears that a share sale plan hasn't topped the company's list of immediate priorities.

The government has already lowered its stake in Chunghwa Telecom to 42 percent in the wake of the latest sale of shares in mid-August.

Hochen yesterday reiterated that the company received the license to run the TV business legally and would not want to disrupt the service in a hurry.

The company could face a fine of up to NT$1 million (US$30,000) for continuing to broadcast TV programs, according to the new law. The government can also request that the company rectify the situation within a specified time or revoke its operating license.

Chunghwa Telecom said it has not received any such notice yet.

Hochen said that as Chunghwa Telecom is a primarily a telephone company it should abide by the telecommunications laws, rather than the Broadcasting and Television Law.

The company has acquired around 10,000 subscribers to its TV service since its debut in March. In addition, they have a total of 3.26 million broadband subscribers.

Chunghwa Telecom earlier this month posted a net income of NT$55.8 billion, or NT$4.78 a share, for the first 11 months, on sales of NT$167.4 billion.
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