When Howard Shyr (石世豪) became the first deputy chairperson of the National Communications Commission (NCC) after it was formed in 2006, the commission was already facing several challenges.
Aside from the questions of the constitutionality of the independent ombudsman as well as relentless verbal attacks on commissioners launched by the then-ruling party Democratic Progressive Party (DPP), a majority of the nation’s cable TV services were controlled by foreign investors. Chunghwa Telecom’s multimedia-on-demand (MOD) system had just begun to attract users and only a small of number mobile phone users had migrated from second-generation (2G) to third-generation (3G) telephone services.
Last month Shyr returned to the NCC as chairperson, six years after he first joined the body. Since then however, the nation’s media and telecommunication environment have experienced drastic changes. The commission has ruled on two controversial cross-media ownership cases: the Dafu Media — affiliated with the nation’s top telecom carrier Taiwan Mobile — and its merger with the nation’s largest multiple service operator (MSO) Kbro Co; the Want Want China Times Group — which already owns newspapers, magazine and television stations — and which was controversially granted conditional approval in July to purchase the cable TV services owned by China Network Systems (CNS).
Photo: Liu Hsin-de, Taipei Times
Earlier this month the Want Want ruling drew nearly 10,000 journalists, students and other protesters onto the streets to demonstrate against the monopolization of the media.
Meanwhile, the number of MOD system subscribers has vastly increased and now stands at around 1.2 million, making it the most threatening potential competitor to cable television services. Rather than encouraging people to switch from 2G to 3G services, the nation is now filled with mobile phone users unsatisfied with slow data transmission rates as well as what they say are obscenely high telecom service rates. The government has been urged to develop fourth-generation (4G) technology and many are wondering how Shyr might address the problems facing the nation’s rapidly changing telecom service and media market. What would the former NCC deputy chairperson do differently now that he is calling the shots in the agency?
In a recent interview with the Taipei Times, Shyr said the commission would consider stipulating laws regulating cross-media ownership.
“The only national law that can be used to regulate cross-media ownership is the Fair Trade Act (公平交易法),” Shyr said. “However, the law mainly considers competition in the market, not problems generated by the concentration of media content.”
Shyr said that worldwide ,countries differ markedly in how they regulate cross-media ownership, with the laws generally reflecting the culture and the society of that nation.
Shyr highlighted the method used by Germany’s Commission on Concentration in the Media Sector (KEK) as an example, which was widely cited by national media experts as a way to calculate Want Want’s potential media influence.
“The German method has a very unique characteristic,” he said, adding that he had done extensive studies into the method in his doctoral dissertation. “The contents [in the German method] are much more refined than the discussions we had here.”
When asked if the commission would ask the nation’s telecom carriers to lower their service rates next year, Shyr said the commission would comprehensively review the policy and plans to reach a final decision before the end of this year.
He said the government caps telecom service rates to prevent telecom carriers from transferring inefficiency costs to customers. While the government had succeeded in lowering telecom service rates through the enforcement of the price cap method in Article 26 of the Telecommunications Act (電信法), Shyr said little was reflected in the bills that consumers have to pay each month.
“What the telecom carriers lowered was the nominal rate of the service, and what they offered to consumers was a promotional rate. The former is already higher than the latter,” he said. “So no matter how much telecom carriers lower the nominal rate, it will hardly affect the promotional rate offered to customers.”
Shyr said the commission has aimed to regulate the intermediation costs among telecom carriers rather than the retail prices offered to consumers.
“If we can reasonably regulate it [intermediation costs], then all the carriers will have room for lower service rates,” he said.
Before Shyr took office last month, the commission had passed the amendment to the Telecommunications Act and submitted it to the Executive Yuan for review. One of the controversial changes was that the commission would be able to require the dominant players in the fixed communication network market to run what is perceived as the bottleneck facility as a separate division from the main company if the facility was deemed to be the cause of lack of competition in the market.
The amendment caused panic among employees at Chunghwa Telecom, the nation’s largest telecom carrier that controls the “last mile” in the fixed network service. They launched a large-scale protest in July demanding the commission withdraw the amendment. Shyr said that it was definitely necessary to reconsider the amendment to the Telecommunications Act, adding that the Executive Yuan would hear from different agencies on the amendment before submitting it to the Legislative Yuan for review.
“It [the amendment] fails to consider how the commission should regulate cable television services when they offer the same telecom service as the telecom carrier,” Shyr said. “If we simply regulate the telecom service rate without taking into account the competition between the cable TV operators and telecom operators, then how are we going to handle the scenario in which there is an asymmetric regulation of these two service operators?”
While in 2009 the EU recommended that its member states introduce a policy of local loop unbundling as a backup tool to facilitate competition in the telecom market, Shyr said that the economic bloc also made sure that legislation was worded carefully and comprehensively.
“It was simply difficult to enforce a similar policy here with only one article [about opening the last mile] in the Telecommunications Act,” he said. “There are other ways to facilitate competition in the marketplace and that can be done without the amendment.”
Shyr said Chunghwa employees need not panic because the commission would not deliberately tear a profitable company apart.
Having a separate firm managing the last mile, he said, would potentially turn it into a much more profitable operation, as seen in the experience of the London-based BT Group.
With the NCC facing criticism from many corners as being a “No Communication Commission,” Shyr said the new commissioners would try to communicate with the operators in the sectors they oversee.
He said he would personally visit media watch organizations, without naming any.
“The bottom line is that we should never make any promises during our meetings with them,” he said, adding that the commission ruled by reaching a consensus.
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