No decision yet on MOD service

No was reached at a closed session of the National Communications Commission (NCC) yesterday on whether Chunghwa Telecom's Multimedia on Demand (MOD) Digital TV service had violated the Broadcasting and Television Law's (廣播電視法) stipulation that political parties, the government and the military should not hold ownership of media firms.

It has also been alleged that the service might violate the stipulation that direct foreign investment should not exceed 20 percent.

NCC and spokesperson Liu Yu-li (劉幼琍) said that the members were near consensus at noon, but that some commissioners remained unclear about some of Chunghwa Telecom's statements. The commission therefore decided that another session would be held in which the company would be asked to provide more detailed explanations.

Chunghwa Telecom has promised to send supplemental information to the commission within three days.

Company Ho Chen-tan (賀陳旦) said that he hoped the commission would consider Chunghwa Telecom's interpretation of the regulations.

"We also hope that MOD will not be treated as just another cable TV service, but rather the result of a telecommunications service operator expanding into a different field," he said.

According to Liu, at issue is how the MOD service should be defined and whether the Telecommunications Law (電信法) or the Cable Television Law (有線電視法) should be used to regulate it.

The commissioners are tasked with interpreting articles 6 and 7 of the Framework Act of National Communications (通訊傳播基本法). While Article 6 dictates that the government should encourage the development of new telecommunication techniques and services and should not limit them without legitimate reasons, Article 7 says the government should be impartial when regulating different communication techniques.

Liu it would go against the global trend if the commission decided to terminate the service simply because it was somewhat controversial. He said that the onus was on Chunghwa Telecom to present convincing statements as to how it would differentiate itself from other cable TV service providers.

Observers that the verdict would depend on whether the commission decided that the importance of offering consumers a different option outweighed the limitations stated in the law.

Chunghwa Telecom has invested NT$4 billion (US$121 million) in its digital TV service, in which TV signals are sent through high-speed Internet connections to subscribers in northern Taiwan.

The Government Information Office issued a permit for the service in 2004. Last year, however, it notified Chunghwa Telecom that, as a MOD service operator, it was required to meet the stipulations of the law. Currently, 48 percent of Chunghwa Telecom's shares are owned by the government, while the rest are held by local or overseas investors.

In an attempt to salvage its MOD service by clearing differentiating it from a cable TV service, Chunghwa Telecom canceled its 18 digital TV channels and retained only its "interactive" and "on-demand" services.

Ho that the company had invested a substantial amount of resources in developing its digital TV service and that it was regrettable that it had become entangled in sensitive political issues.

"I take full responsibility for the success or failure of the MOD service," Ho said. "But it would be unfair to penalize Chunghwa Telecom simply because of the controversies surrounding the law."

Ho that the only similarity between his company's MOD service and cable TV services was the way in which the audience watched the programs, but that the contents were provided through completely different platforms.

He also said that Chunghwa Telecom would have to gain permission from the Legislative Yuan and Executive Yuan to be fully privatized.

Ho the hope that the NCC would grant his company a grace period so that it could find a way to comply with the regulations.

The Legislative Yuan passed a resolution last year that Chunghwa Telecom would not be permitted to release any more shares.