Commission urges TOP, EHS to settle fee dispute - Taipei Times
Wed, Oct 11, 2017 - Page 3 News List

Commission urges TOP, EHS to settle fee dispute

CONFLICT:There would be no winners in case of a falling out, as TOP would lose channel fees and EHS would lose access to subscribers, the NCC’s Weng Po-tsung said

By Shelley Shan  /  Staff reporter

Taiwan Optical Platform (TOP) and Eastern Home Shopping and Leisure Co (EHS) should continue their negotiations to end a dispute over the fees for airing EHS’ home shopping channels on the cable systems owned by TOP, the National Communications Commission (NCC) said.

The dispute arose after EHS wanted to renegotiate the slotting fees for its home shopping channels, NCC spokesman Weng Po-tsung (翁柏宗) said.

The fees are calculated by multiplying the number of channels by the cable system’s total number of subscribers and the value for each subscriber.

TOP has seven cable systems in central and southern Taiwan with nearly 500,000 subscribers, Weng said, adding that EHS has five home shopping channels.

Each subscriber in TOP’s cable systems is valued at NT$647 (US$21.3), but EHS has requested that the value be cut to NT$243 per subscriber, he said.

The difference was too great for the two companies to reach an agreement, he said.

EHS in January asked the commission to arbitrate over the dispute, but to no avail, Weng said.

As the NCC was at the time in the process of reviewing TOP’s bid to acquire Eastern Television, an affiliate of EHS, the commission postponed the second arbitration meeting, he said.

After the NCC rejected TOP’s acquisition bid in June, the commission, TOP and EHS on Sept. 30 convened a second arbitration meeting, in which TOP and EHS again failed to reach an agreement.

“We hope that both firms can continue negotiating, despite the failed attempt to reach a settlement at the Sept. 30 meeting. No one would win if the deal fails. EHS’ home shopping channels would lose their access to 500,000 cable TV subscribers and TOP would see its revenue from channel slotting fees decline,” Weng said.

Both firms should refrain from making rash decisions, he said.

Should TOP decide to remove EHS’ home shopping channels from its channel lineup, it must change the business plans for all of its cable systems on which EHS channels are aired and submit the plans to the commission for approval, Weng said.

EHS said it would not be affected much if TOP removed its channels, as it has access to other systems, such as Chunghwa Telecom’s multimedia-on-demand system, which has 1.4 million subscribers.

However, TOP said that EHS’ request for a fee reduction was unreasonable, adding that EHS has abused its dominant status in the market.

“EHS also tried to influence our stock price by spreading information in the market that our company would suffer financial losses of about NT$200 million if EHS’ channels were removed from our cable systems,” TOP said in a statement.

EHS has not paid its channel slotting fees in the past nine months as the two firms have yet to agree on the terms of a contract renewal, TOP said.

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