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NCC needs to consider the public

The seven members of the Cabinet’s National Communications Commission (NCC) took their posts last Friday. It is hoped that they will be able to perform their duties well and learn from the mistakes their predecessors made in the sales of the Broadcasting Corporation of China (BCC), China Television Co (CTV) and the sale of a majority stake in Eastern Multimedia Co to the Carlyle Group of the US.

There has recently been news that Carlyle plans to sell its stake in Eastern’s 13 cable television affiliates. In 2006, Carlyle paid NT$47.6 billion (US$1.55 billion) for control of Eastern. After less than two years, it is reportedly selling its shares.

How can the experts that were so confident in foreign investment in Taiwan’s cable television industry explain this? The truth is that the incentive for foreigners to invest in Taiwan’s cable television industry is not as substantial as first thought. Initial market expectations, including foreign capital, technology upgrades and acceleration of digitalization, have all failed to deliver.

A more fundamental issue that needs to be looked at is why the authorities approved Carlyle’s purchase of Eastern in the face of all the criticism the issue received. We have to ask why the NCC merely delayed the case by requesting supplementary documents, eventually pinning the responsibility on the Investment Commission at the Ministry of Economic Affairs.

Why did it approve the case so easily without taking responsibility or demanding that Carlyle be a responsible operator?

For example, Carlyle failed to downsize its staff or sell its shares within its first year of operation. It also did not increase the coverage of digitalized fiber networks of its cable television systems to 80 percent, nor did it allocate certain channels for public welfare use, non-commercial use or to minority or disadvantaged groups.

This is not the first time these problems have occurred. The NCC’s former commissioners failed to demand greater responsibility from those in charge when it approved similar cases in the past. Examples of this include the sale of CTV to China Times Group chairman Albert Yu (余建新), the sale of BCC to talk show host Jaw Shaw-kong (趙少康) as well as the foreign investment conducted in Multi-System Operators (MSOs).

Ideally, the NCC should not approve any application unless the applicants commit to greater responsibilities and higher levels of service. By doing so, the NCC’s decisions would be more in line with the public interest.

Late last month, the US Federal Communications Commission (FCC) “conditionally” approved Sirius Satellite Radio’s US$3.3 billion buyout of XM Satellite Radio with a three-to-two vote after a review of almost 500 days.

The FCC required Sirius to not increase its fees for three years and to set aside 12 channels — about 8 percent of its total number of channels — so that they could be used by educational and minority broadcasters. The FCC also required Sirius to allow users to purchase individual channels selectively and forced it to pay a previous US$19.7 million fine issued by the FCC.

Here in Taiwan, the NCC also has the power to approve or disapprove a deal. After an applicant decides to accept or reject a deal through calculation of gains and losses, the NCC always has the final say.

The NCC should make decisions based on maximizing public interest and should not use the law as an excuse during its decision-making process. It should also not pass the buck to other agencies.

Unfortunately, in the cases of CTV, BCC and MSOs, the NCC failed to exercise its power for the good of the public.



Lo Shih-hung is an associate professor at National Chung Cheng University’s Department of Communications.

Translated by Eddy Chang
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