Cable titans cash in on connections

Shih Jun-ji (施俊吉), a commissioner in the Cabinet-level Fair Trade Commission (FTC), is probably one of the few officials who has dared to pinpoint what goes on behind the scenes in Taiwan's cable TV business -- that is, political manipulation.

"The problems with cable TV operations are due to the intricate relations between political and business circles," Shih said during a conference held by the Government Information Office (GIO) last week.

"If the law stipulated that neither KMT central standing committee members nor those of other parties could be involved in the cable business, the state of operations would be improved," Shih said, drawing applause from many of those attending the conference.

Shih's hopes, however, could be little more than wishful thinking since politicians employ a variety of means to manipulate the rules of the game in the cable TV market, according to insiders.

Legislators have admitted that some of their colleagues who have their own interests at stake in the highly lucrative market have interfered with the rule-making process for their own benefit.

"When the Legislative Yuan reviewed the amendment to the cable and broadcasting law in 1998, the intricate relationships between political and business circles made the process very chaotic," said KMT legislator Hung Hsiu-chu (洪秀柱).

DPP legislator Fan Hsun-lu (范巽綠) was even more direct, naming KMT legislator Wang Ling-lin (王令麟) as the person who insisted that the maximum market share for conglomerates in the cable industry should be 33 percent, overturning a proposed ceiling of one-fifth.

According to Fan, Wang said that cable operators needed to control at least one-third of the market share to survive.

Wang is the chairman of Eastern Multimedia, one of Taiwan's largest cable TV operators.

Officials at the local level have also used their political connections to influence cable regulations, insiders said.

Following the 1998 amendment to the cable and broadcasting law, local governments were authorized to set subscription fee standards starting from 1999.

But many found that political forces were interfering with what critics said should be a "professional" fee-reviewing process.

Citing the experience of two of her colleagues, Liu Yu-li (劉幼琍), a media expert at National Chengchi University, said certain county commissioners simply told reviewing committee members their preferred fee standards, while other elected officials also sought to dictate fee charges.

"I want to appeal to local councilors not to interfere [with the fee-reviewing process] by using political tactics," she said.

Worse yet, industry insiders said, is that big companies involved in monopolized cable TV market have distorted market mechanisms through unfair practices and then used their political influence to head off any official investigation.

The two big players in Taiwan's cable industry are Rebar Corporation's Eastern Multimedia (東森媒體科技) and the Koo's Group's United Communications (和信). Together, they control about 80 percent of Taiwan's cable TV market, according to observers.

Eastern, which is now headed by KMT legislator Wang Ling-lin, was founded under the leadership of his father, Wang Yu-tsung (王又曾). United was started by Koo Chen-fu (辜振甫), a senior KMT figure who also chairs the Straits Exchange Foundation. It is now run by his son, Koo Chih-yun (辜啟允).