The National Communications Commission (NCC) last month rejected Taiwan Optical Platform Co’s (TOP) bid to purchase Eastern Television (ETTV), thus putting an end to a case that has received widespread attention and sparked heated discussion.
It is a shame that the commission did not make a difference when it had three perfect opportunities to do so.
From a passive perspective, the commission, as the regulatory authority of the telecom and broadcasting industries, should approve all purchase bids for media outlets that are not explicitly prohibited by the law.
From a more proactive perspective, the commission can use its administrative discretion when deciding whether to approve a purchase bid: As long as it remains within the limits of the law, it can even reject purchase bids based on reasons as vague as “to ensure better development of the telecom and broadcasting industries.”
The commission said it rejected the deal due to concerns that TOP has a decided advantage in central Taiwan, which would give it 13 channels and massive financial leverage had it taken over ETTV.
However, is this in violation of the law? No.
If the commission wanted to exercise its administrative discretion, then it could have made a major contribution by proposing an objective review standard for quantification that could be used across the board and applied to all applications, but it did not. This was the first missed opportunity.
According to the party, government and military clauses in the Radio and Television Act (廣播電視法), the Cable Radio and Television Act (有線廣播電視法) and the Satellite Broadcasting Act (衛星廣播電視法), political parties and elected public officials may not own shares in radio and TV outlets.
The problem is that there is no way for over-the-counter (OTC) and listed media companies, such as TOP, to know whether any of the aforementioned entities own shares in a media company.
The commission wanted media companies to become listed on the OTC or stock markets, but this could easily lead to problems in connection with the party, government and military clauses.
Had the commission used the review to propose concrete suggestions for how to resolve this problem, it would have made a major contribution, but instead it asked that the operator propose a mechanism for prevention. This was the second missed opportunity.
Finally, when reviewing media deals, the commission must consider the development of the industry and an orderly market. What is most urgently needed is to increase the proportion of locally produced content, something that the commission has been pushing for.
In the era of digital convergence, what Taiwan needs most is TV companies that can produce more and better local content to attract more viewers.
The commission could implement such a policy by using transaction reviews and license renewals to push operators to propose concrete policies to increase the proportion of locally produced content.
However, it does not seem to have expressed such ideas in connection to the ETTV deal. This was the third opportunity the commission missed to implement its policy goals.
What is done might be done, but the future brings new opportunities. When dealing with new transaction deals, the commission will still be able to promote its vision of moving the media industry forward.
Weber Lai is a professor at National Taiwan University of Arts’ Department of Radio and Television and president of the Chinese Communication Management Society.
Translated by Tu Yu-an and Perry Svensson
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