The National Communications Commission’s (NCC) on Feb. 20 proposed a draft broadcasting media monopolization prevention and diversity preservation act that contained 53 articles.
This draft prescribes separate regulations for mergers between radio and television operators, and mergers between newspapers, radio and television operators.
The draft also includes five different sets of controls depending on the level of integration with radio and television operators: no need to report a merger, the merger must be reported; allowing mergers in principle, but prohibiting them in exceptional cases; prohibiting mergers in principle, but allowing them in exceptional cases; and a full ban on mergers.
This is an ambitious draft. It covers many areas and contains many blind spots.
First, laws are based on experience, not logic, and excessive legislation is the enemy of digital convergence. If regulation is too detailed, oversight will cause too much work for civil servants and operators.
It is unrealistic for the NCC to expect the public to happily accept these new regulations in such a short period, especially when no one has any experience of such laws and when no comprehensive market surveys are available.
This is not a good legislative strategy at a time when passing legislation is difficult due to the standoff between the pan-blue and the pan-green camps, and because of disputes between other sectors of society.
Why not only regulate the kind of cross-media monopolization that cannot be regulated using current legislation?
Other cases could be left to the Radio and Television Act (廣播電視法), the Satellite Broadcasting Act (衛星廣播電視法) and the Cable Radio and Television Act (有線廣播電視法).
If legislation could be created after the necessary experience has been gained, achieving public acceptance of such legislation would be much easier.
Second, the NCC hopes that this draft will work both as a stick and a carrot. This is why the third chapter of the draft has 11 articles dealing with maintaining professionalism and autonomy in the media.
While these regulations do address encouragement of guidance and subsidies, those who understand the situation know that the NCC has a limited budget and therefore it is just empty talk.
What is worrying is that with these regulations, the NCC brings printed media under its control in one swoop. No wonder printed media outlets that have been free from control are objecting, claiming the NCC is extending its power.
It must be understood that however well intentioned a law to protect the media is, the end result will always be to limit, rather than promote, press freedom, professionalism and independence.
The only way to proceed seems to be by establishing a smart public-private cooperation mechanism.
Third, many regulations in the draft prohibit integration, viewing it as being illegal per se. The aim is to draw a clear lines, to make regulation simpler and cheaper.
However, in many other countries current laws regarding competition, including regular competition law and sector competition law, are now moving away from this approach, which neither needs nor allows discussion, and are instead moving toward an approach based on the rule of reason, in which the pros and cons of each case are considered before deciding whether to approve it.
The UK has the 20:20 ownership rule, but this only applies to sprecific channels and is not a general law.
The US Federal Communications Commission places a 30 percent limit on horizontal mergers conducted by multiple cable TV system operators, but since this was implemented in 1993, US federal courts have said that this percentage has not been given any reasonable explanation or evidence, and the issue has still not been settled.
Germany’s Interstate Broadcasting Agreement’s article 26 states that when programs belonging to one company have an average annual viewership rating of 30 percent, then that company will be deemed a dominant influence on opinion instead of prohibiting all media mergers that have the potential to become a dominant influence.
Finally, since the NCC will use viewership, listenership and readership ratings as a standard for regulating mergers between operators, it should first gain a better understanding of the operators in question.
Although article 6 of the draft stipulates that the NCC “may” entrust specialized organizations or academic groups with carrying out rating surveys, article 24 of the draft also authorizes the NCC to first carry out its own assessments.
Article 24 states that before the competent authorities carry out such surveys and release the results, they can estimate the influence a certain media merger could have based on current industry information.
It adds that judicial organizations should respect the decisions of the competent authorities when the concerned authorities, organizations or experts are asked to appraise their estimates and when a decision is made based on them via a hearing procedure.
If the NCC carries out its own assessments on viewership, listenership and readership ratings before others, then uses them as a basis for media regulation decisions, how can the specialized organizations that are later entrusted with carrying out surveys do so in an objective and fair manner? Even if they manage to do this, if the results differ from the NCC’s estimates, the question will remain about which should be taken as the standard.
Since even the judiciary is supposed to “respect the decisions made by the competent authorities,” how can operators who have received unfair decisions in the past expect any form of justice?
Perhaps a better method would be to carry out strict monitoring and reviews of cross-media integration cases that wield a certain amount of market power, while also making such mergers subject to additional clauses.
Prohibiting integration completely should be the last option. This is what the Fair Trade Act (公平交易法) aims to ensure and what the Fair Trade Commission practices.
So far, no cases of irregularities or inadequacies have occurred. So, why should the NCC try and do something different?
Liu Kung-chung is a research fellow at the Institutum Iurisprudentiae of Academia Sinica and a former NCC commissioner.
Translated by Drew Cameron