Cable TV move called inadequate

While the removal of an anti-monopoly clause in recent amendments to the Cable Television Law (有線廣播電視法) has renewed public concern over the problem of a cable monopoly, it has also raised questions as to whether the clause had served its original purpose.

The removed clause stated a restriction on the shareholders of cable TV companies. The restriction stipulated that one shareholder could not possess over 10 percent of the stock issued by a cable TV company, and a shareholder's total holdings could not exceed 20 percent if investments by affiliated businesses and close relatives are included.

However, it is a known fact that many big investors have been able to evade the restriction on the investment limits by borrowing others' people names to represent themselves in a cable TV company.

Two of the most well-known business conglomerates that hold extensive control over the cable TV market are the Rebar Group (力霸東森企業集團) and Koo's Group (和信集團), which own cable TV companies and also sell cable channels.

"A monopoly has long existed. The structure of the shareholders doesn't reflect the real situation. And it is hard for the Government Information Office, which doesn't possess investigative power, to track the origin of the investment capital," said an official in charge of cable TV affairs at GIO, who declined to be named.

Compared with the restriction on shareholders, another restriction on the market share of individual investors and their affiliates is more suited to prevent a monopoly, the official said.

The restriction, which was added to the law in 1999, stipulates that the number of subscribers served by an individual investor and his affiliates cannot exceed one third of the total number of subscribers nationwide.

Also, the number of cable TV companies owned by an individual investor and his or her affiliates cannot exceed one third of the total number of cable TV companies nationwide.

According to a rough figure provided by the official, of the 68 cable TV companies nationwide, the Rebar Group and Koo's Group each own approximately 20 -- many of which are controlled indirectly through re-investment and even re-re-investment.

Some cable TV operators that are not supported by any business groups said the real problem is the fact that the business groups are allowed to own cable TV companies, sell channels and even run TV stations, a situation that causes unfair competition and is conducive to the building of a cable monopoly.

"When all the channels are under their control, it is up to them to decide whether we [independent operators] are able to purchase channels," said Frank Lai (賴文雄), chairman of Da-Tun Cable TV Co (大屯有線電視) in Taichung County.

Lai Mao-chou (賴茂州), former president of Taichung Cable TV (台中有線電視台) that has been forced to merge with a business group-supported company because of heated competition, said business conglomerates typcially slashed their subscription fees to beat their rivals for subscribers.

"If we did not accept their conditions and sell them a certain percentage of our stock, their next step would be to further lower the subscription fees to NT$1,000 per year," Lai said.

Meanwhile, lawyer Yu Ying-fu (尤英夫) warned the current law will certainly lead to the establishment of three cable monopolies over the run long, leaving little choices for consumers.