Tue, Jun 15, 2004 - Page 2 News List

Public broadcasting decision hinges on costs

SPLIT DECISION Given the choice of nationalizing or commercializing the government's interests in two broadcasting networks, the Cabinet looks both ways

By Ko Shu-ling  /  STAFF REPORTER

A Cabinet spokesman said yesterday that the government plans to take a gradual approach to the issue of nationalizing two terrestrial TV stations, preferring to first nationalize the China Television System (CTS), then deciding later whether to nationalize or commercialize Taiwan Television (TTV).

"While the resolution of the legislature is to privatize one of them and nationalize the other, the Government Information Office (GIO) hopes to integrate one or both of the two stations into the Public Television Service group with a commercial competitive edge," Cabinet Spokesman Lin Chia-lung (陳其邁) told reporters after reviewing part of the draft bill governing the release of the public stake in terrestrial TV stations.

While the Cabinet allocates NT$900 million annually to keep the Public Television Service (PTS) afloat, it is estimated that the integrated public television group might cost the government more than NT$13.5 billion a year.

The government owns 47.39 percent of TTV and 75.04 percent of CTS. The public's stake in the two companies long predates the Democratic Progressive Party (DPP) administration.

The Chinese Nationalist Party (KMT) owns a 35.6 percent share of the Chinese Television Company (CTV) and has a majority of shares in the Broadcasting Corporation of China (BCC).

The Broadcasting and Television Law (廣電法) -- which integrates the Terrestrial Radio and Television Law of 1976, the Cable, Radio and Television Law of 1993 and the Satellite Radio and Television Law of 1999 and which was passed last December -- requires the Cabinet to present a report on government shares in TTV and CTS six months after the law took effect.

Under the Cabinet's draft, the GIO would present a proposal regarding CTS and TTV two months after the law is passed.

The GIO has mapped out three possible scenarios for the two stations. One possibility is to nationalize the two, another is to privatize them and the third is to privatize one of them and nationalize the other.

Chen hinted yesterday that the Cabinet might prefer to nationalize CTS first because it would cost less than nationalizing TTV.

While it is estimated that the government will have to pay between NT$600 million and NT$700 million to buy out the government stakes in TTV, the Cabinet does not need to spend anything to obtain the government stake in CTS because it can directly ask the Ministry of National Defense to tender its interest.

While establishing a public television network may cost about NT$6 billion to NT$10 billion, keeping it afloat is expected to cost the government about NT$1 billion. The Cabinet has set an annual budget of NT$900 million for this public broadcasting, while the service raises NT$500 million on its own.

If the government were to privatize the terrestrial TV station, the law also mandates that the funds raised from the sale should be donated to the Public Television Service Foundation, which should then use the money to develop digital TV. The draft also requires establishment of a committee under the Cabinet to evaluate plans concerning government stakes in terrestrial TV stations.

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