Thu, Sep 05, 2019 - Page 2 News List

Cable operators, channel agents fail to agree on fees

By Shelley Shan  /  Staff reporter

The National Communications Commission (NCC) yesterday urged TaipeiNet and Digidom Cable TV to continue negotiations with three channel agents over content authorization fees, adding that both sides should not compromise the interests of consumers.

The NCC made the comments after the two sides failed to reach an agreement for the fourth time at an arbitration meeting on Tuesday.

The three channel agents — Da Hsiang Mulimedia, WIN TV and Hao Ming Co — which jointly represent 22 cable channels, suggested during the meeting that the two cable system operators remove the channels from their lineup from Oct. 1 after the failed negotiations, NCC acting spokesman Hsiao Chi-hung (蕭祈宏) said.

“However, the two cable system operators can only do so after the commission approves the proposed changes to their channel lineups in their business plans. After the commission approves those changes, the two operators will have to run news tickers for at least five consecutive days to inform subscribers about the changes before officially removing those channels,” Hsiao said.

“As the commission does not know when they would file the applications and how much time it would take the NCC commissioners to deliberate and approve the applications, it cannot state in definite terms when subscribers would not be able to watch the 22 channels on TV,” he said.

“Both sides need to be rational in their demands and ensure that the industry can grow sustainably. They should not attack one another by compromising the interests of their subscribers,” Hsiao added.

TaipeiNet and Digidom have 52,016 and 81,046 cable service subscribers respectively who would lose access to the 22 channels if the dispute is not settled, the commission said.

The channel agents are affiliated with Fubon Group’s Kbro Co. A majority of these channels belong to the networks of Eastern Broadcasting Co, Videoland and Star TV.

According to NCC officials, the two sides have failed to reach an agreement because channel agents want to charge a content authorization fee of 10 percent of subscription revenue, with the number of subscribers based on the total number of government-registered households in a cable system operator’s service area, while cable operators want the fee to be 60 percent of the revenue collected from the actual number of subscribers in a service area.

As to why any of the parties have refused to back down from their demands, some industry experts said that many cable system operators have lost a significant amount of revenue after the NCC in 2012 changed the regulations to allow cable operators to branch out into new service areas and facilitate the entry of new operators.

A whirlwind of disputes would ensue if any of the two operators cave in in the negotiations: New operators can cite it as a reason to pay channels lower content authorization fees, while existing operators would lose more subscribers to new rivals who charge lower subscription fees, they said.

Another reason could be that both sides are waiting for the final ruling of an appeal at the Supreme Administrative Court, which Kbro Co and another channel agent filed in protest against fines imposed by the Fair Trade Commission (FTC) in 2016, a source familiar with the dispute told the Taipei Times.

The FTC accused the two agents of engaging in concrete action to treat new and old cable operators differently, the source said.

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