Fri, Jan 15, 2010 - Page 3 News List

FEATURE: Ownership of media stock still a touchy issue

A QUESTION OF INFLUENCE Proponents and critics seem to agree that the law should focus more on the issue on who controls an outlet rather than size of stake

By Shelley Shan  /  STAFF REPORTER

When the Legislative Yuan passed an amendment to the Broadcasting and Television Act (廣播電視法) in 2003 banning the government, political parties and the military from holding stock in the media, it was regarded as a milestone in the nation’s pursuit of true democracy.

The amendment was designed to free the three terrestrial television stations — Taiwan Television (TTV), China Television Co (CTC) and Chinese Television System (CTS) — from political interference.

All three stations had long been viewed as mouthpieces of the Chinese Nationalist Party (KMT) government, advocating its political agenda and helping swing public opinion during elections.

Just six years later, however, the National Communications Commission (NCC) has proposed easing restrictions on government investment in media groups.

The commission has proposed two amendments to the Satellite Broadcasting Act (衛星廣播電視法). One would cap both direct and indirect investment in the media from political parties at 10 percent, the other would allow them to indirectly hold 10 percent of shares.

NCC Commissioner Weng Hsiao-ling (翁曉玲) said that according to the National Communications Commission Organization Act (通傳會組織法), it must “uphold the principle of the government, political parties and the military withdrawing from the media.”

It has strictly followed this requirement, but has encountered some tricky situations when implementing the policy, she said.

“Media companies can now trade on the stock market and it is impossible for us to stop someone from purchasing their shares, including the National Stabilization Fund (國安基金),” she said. “The amendment essentially contradicts the rules of the free market.”

Weng said that the commission had proposed the amendments because the three media laws — the Broadcasting and Television Act, the Satellite Broadcasting Act and the Cable Television Act (有線電視法) — only authorizes the punishment of media groups, not investors.

This means that if the government invested in a media group, only the company would be punished, not the government.

This was unreasonable, she said, adding the proposed amendments would bring the laws governing the media more in sync with capital markets. Instead of focusing solely on the shareholding requirement, the commission would also examine if the government, political parties or the military actually controlled the operations of a particular media group by having representatives hold management positions or serve on the board of directors.

Since 2003, the restrictions on investment have resulted in some controversial rulings by the commission. Four years ago, Chunghwa Telecom had to forgo its attempt to operate channels on its multimedia-on-demand (MOD) system because the Ministry of Transportation and Communications owns one-third of the company.

When applying for a channel operator’s license, Elta TV was given three months to resolve the same issue because four major government funds held 2 percent of one of its biggest shareholders, Delta Electronics.

Five cable TV channels owned by Taiwan Mobile Co were each fined NT$100,000 after it was discovered that the Taipei City Government had indirectly invested in them. The city government owns 15 percent of Fubon Financial Holding Co through a merger between the city-owned Taipei Bank and Fubon Bank in 2005 and Fubon Financial was an investor in Taiwan Mobile.

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