Cabinet puts KMT before ultimatum over ownerhip of television stations

"The KMT is duty bound to abide by the law as we'll do the same to China Television System (CTS) and TTV."

Lin Chia-lung, secretary-general of the Government Information Office

The Chinese Nationalist Party (KMT) must present a proposal regarding the release of the party's stakes in China Television (CTV) and Taiwan Television (TTV) before the end of this month and get rid of them before the end of next year, the Cabinet said yesterday.

"The KMT is duty bound to abide by the law as we'll do the same to China Television System (CTS) and TTV," Government Information Office (GIO) Secretary-General Lin Chia-lung (林佳龍) said yesterday afternoon.

The government owns 75.04 percent of CTS and 47.39 percent of TTV. The government stakes in both companies long predate the Democratic Progressive Party (DPP) administration.

The KMT owns a 65 percent share of CTV and has a 10 percent stake in TTV. It also has a majority of shares in the Broadcasting Corporation of China (BCC).

The Broadcasting and Television Law (廣電法) -- which was passed last December and 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 -- stipulates that political parties are no longer allowed to manage media outlets.

The legislation also 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 bill -- which is scheduled to be approved in the weekly Cabinet meeting tomorrow, the GIO would cut back its annual subsidy to nationalized TV stations if they fail to perform their legal duties. An evaluation committee would be established under the draft to conduct the evaluation.

The GIO has mapped out three possible scenarios for CTS and TTV. 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.

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 75 percent stakes. The remaining 25 percent of CTS's private stakes would cost the government an estimated NT$1.4 billion to purchase and donate them to the Public Television Foundation.

In view of the amendments made to the Broadcasting and Television Law, the KMT is contemplating selling CTV, BCC, Central Motion Pictures Corp and the Central Daily News. KMT authorities are hoping to pick up over NT$20 billion by selling these four media outlets.

While BCC failed in its first round of the license renewal evaluation, it will have to go through the third and final round if it fails the second review on Friday. The GIO will issue a three-month-old temporary license if the station fails the final review.

The BCC, which takes up 25 percent of the AM frequency stations and 13.96 percent of the FM frequency stations, failed the first round of review because it had reneged on its pledge to return two or three of its channels to the GIO.