Thu, Feb 21, 2013 page1

• Want Want-CNS merger rules not met

  QUESTION OF TRUST: The NCC said putting 75 percent of the CtiTV shares owned by the Tsai family in a bank’s trust does not meet the disassociation requirement

  • By Shelley Shan / Staff reporter
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  The National Communications Commission (NCC) yesterday ruled that Want Want China Times Group (旺旺中時集團) has not met the three conditions it set last year for the group’s acquisition of the cable TV services operated by China Network Systems (CNS, 中嘉網路), adding that another administrative hearing would not be necessary.

  For the acquisition to be valid, group chairman Tsai Eng-meng (蔡衍明) and his family members or associates must completely dissociate themselves from CtiTV’s (中天電視) news channel. China Television Co’s (CTV, 中視) digital news channel, which also belongs to the group, must be changed to a non-news channel and CTV must have an independent editorial system.

  The commission said that each condition must be met for the Want Want-CNS deal to take effect.

  The group filed an application for approval with the commission in December last year after placing 75 percent of the shares in CtiTV owned by the Tsai family in the trust of the Industrial Bank of Taiwan.

  NCC Chairperson Howard Shyr (石世豪) said the commission had consulted with the Ministry of Economic Affairs, the agency responsible for enforcing the Trust Act (信託法), which said that placing the property in a third-party trust did not change the controlling relations between the property and the property owner. However, the ministry said such matters must be determined on a case-by-case basis.

  “The conditions we set last year said clearly that Tsai and his associates must not ‘directly or indirectly control or hold the shares of CtTiTV,’” Shyr said. “Judging from their application, the group did not meet that condition.”

  Andy Hsieh (謝煥乾), director of the commission’s legal department, said the ruling showed the group cannot win approval by placing the shares under the trust of a third party. If the group finds another way to meet the conditions, it can file another application, he said.

  In other developments, the commission released a draft broadcasting media monopolization prevention and diversity preservation act (廣播電視壟斷防制與多元維護法), also known as the “media anti-monopolization act.”

  The draft act contains 53 articles. Regulations on cross-media ownership state that the commission will ban mergers between print and broadcasting media if such a merger would have an overall influence on public opinion comparable to a television viewership rate of more than 20 percent, because it would create “a substantial danger” leading to a media monopoly.

  If a cross-media merger involves news channels or channels airing news programs, the commission would be able to ban the merger if it would create an influence comparable to a TV viewership rate of 15 percent.

  The act would also ban mergers among terrestrial TV services or the merger of radio services if one of the parties to the proposed merger reaches 75 percent of the nation’s population. A merger of two radio services would be banned if it would create a listenership rate exceeding 15 percent in a certain area or a national listening rate of more than 10 percent.

  Mergers of satellite channels would be banned if they would cause the TV viewership rate to exceed 15 percent. However, if a merger takes place among satellite news channels, the viewership rate threshold would drop to 10 percent.

  The draft also states that cable TV operators cannot give differential treatment to different channel operators without a legitimate reason. A merger between two cable TV services would be banned if the TV channels owned or operated by the two operators would jointly create a TV viewership share exceeding 15 percent.

  The commission set four more principles guiding future rulings.

  The draft proposal would authorize the commission to entrust a professional third party with the task of regularly conducting surveys on the readership, listenership and viewership of newspapers, radio stations and TV channels to help it gauge media outlets’ influence. Media outlets could not refuse a request for such information without a valid reason. Data collected through such surveys would be made public, the commission said.

  The proposal said that a media outlet’s influence would also be weighted if it owns more than one channel.
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