During its investigation into the ownership structure of the cable television station TVBS, the Government Information Office (GIO) cited the Satellite Broadcasting Law (衛星廣播電視法), which puts a 50 percent limit on direct foreign investment in media corporations. As a result of this, the issue has become the subject of considerable debate. Meanwhile, another media ownership issue is being neglected and will probably hit the headlines toward the end of the year.
The issue that will soon create even more debate concerning Taiwan's media will be the introduction of multimedia-on-demand (MOD) services by Chunghwa Telecom, the nation's biggest telecommunications provider. Under new telecommunications laws, most notably Article 2 of the Cable, Radio and Television Law (廣播電視法), Chunghwa Telecom was able to extend its operations into MOD services through its broadband network. It started to do this at the beginning of last year after the GIO authorized it to begin cable broadcasting.
According to Article 3 of the same law, this organization will come under the jurisdiction of the GIO.
And that's where the problem lies, for the largest shareholder in Chunghwa Telecom is the Ministry of Transportation and Communications. The moment that Chunghwa Telecom becomes a cable operator, it will be in violation of the principle that political parties, government agencies and the military should not be involved in the media.
Moreover, amendments to Article 19 of the Cable, Radio and Television Law in 2003 forbid governments and political parties, and any foundations or agencies, from directly or indirectly investing in the operation of cable TV stations. Those who violate the regulation should rectify the situation within two years of the promulgation of the amendment.
Clearly, the shareholder structure of Chunghwa Telecom's MOD service violates the law, unless it sells all of the shares owned by government agencies such as the Ministry of Transportation and Communications and privatizes all of its businesses.
However, we have yet to hear from the company whether it plans to release shares owned by government agencies. Since there are only about six weeks left before the end of this year, it is difficult to imagine it rectifying the problem until next year at least.
According to the Cable, Radio and Television Law, the GIO must impose a fine of between NT$50,000 (US$1,490) and NT$1 million on those who break the law and request that they rectify the situation within the specified time or the GIO can revoke their operating license. If this were to happen, Chunghwa Telecom's MOD services would fizzle out before it had even begun.
We have to wonder why Chunghwa Telecom has not considered a sell-off of government shares since the launch of its MOD service.
Clearly, it is unwilling to break its ties with the ministry. Moreover, it has also attempted to claim that since it offers its MOD services over its ADSL Internet lines, rather than a cable TV network, the services should come under the jurisdiction of the Telecommunications Act, thereby sidestepping the restrictions imposed by the Cable, Radio and Television Law.
Chunghwa Telecom's attitude is not entirely unexpected, for its MOD services were not regulated under the cable law for zoning rules (individual operators can only service specific areas). This was the result of an administrative order issued by Arthur Iap (葉國興), then head of the GIO, to exempt Chunghwa Telecom from zoning restrictions under Article 32 of the Cable, Radio and Television Law.
At the same time, Chunghwa Telecom was also exempted from provisions under Article 21 of the same law that state a cable provider's subscriber base cannot exceed one-third of all subscribers. This gave the company a significant and unfair competitive advantage over other operators.
Chunghwa Telecom believes that there are special reasons behind the current situation, by which it probably means that an outdated law cannot be applied in the case of new digital technology. But, can organizations willfully break a law simply because they believe it is outdated? Not only has the GIO exempted Chunghwa Telecom's MOD service from regulation under existing laws, it also failed to propose new laws to regulate its services. In short, the GIO has committed dereliction of duty.
This year, the GIO has twice demanded that Chunghwa Telecom adjust the shareholder structure of its MOD services in order to comply with the principle that political parties, government agencies and the military should not be involved in the media. Now, it looks as if the firm's MOD service will not be able to sell its government-owned shares by the end of this year.
Nor do I believe the issue can be resolved before the National Communications Commission is inaugurated next year.
Will that mean the end of Chunghwa Telecom's MOD service? Will the GIO make further concessions?
More controversy is sure to arise if the GIO seeks to both condemn the ownership structure of TVBS and criticize the Broadcasting Corp of China's failure to drive out political forces without also addressing the structure of Chunghwa Telecom's MOD services.
Weber Lai is an assistant professor in the department of mass communications at Chinese Culture University.
Translated by Ian Bartholomew and Daniel Cheng
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