Fri, Jun 27, 2003 page10

• Cable industry slams official meddling

  • By Bill Heaney / STAFF REPORTER
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  Taiwan's cable operators lashed out at government interference in how they run their businesses yesterday in response to restrictions imposed by the Taipei City Government recently.

  On Tuesday, the city's Bureau of Information asked cable companies to group channels into categories so that subscribers can choose to opt in or out of different categories in an attempt to reduce the fees people pay before the launch of a new digital TV service this summer. The recommendation follows a cap on charges for the new digital service which was imposed by the bureau's Cable TV Fee Review Committee on June 12.

  "We are very annoyed [with government interference]," Charles Wu (吳中立), the CEO of Taiwan cable operator Eastern Multimedia Co (東森媒體科技公司), said yesterday. "We already accepted the price cap imposed by the Government Information Office [GIO] on our new digital service, and now local government is going one step further. We think the level they set is totally unreasonable."

  Earlier this year, the GIO set a NT$6,000 limit on the price of the descrambler set-top box needed to decode the dozens of new digital channels that are soon to be transmitted to Taipei residents. The office currently imposes a monthly ceiling of NT$600 for basic cable services.

  Some city councilors have challenged Mayor Ma Ying-jeou and the Taipei City Government saying they are in collusion with cable operators to extort viewers. Councillors have even gone so far as to suggest the providers give the boxes away free.

  The CEO of China Network Systems Co (中嘉網路) scorned the idea.

  "If you want to make a call, you don't ask Chunghwa Telecom to give you a free phone," said Daniel Chang (張鎮安). "And you don't ask your Internet provider to give you a free computer. We're not in the hardware business."

  Operators said they have already bought the descramblers and are only looking to cover their costs. Eastern Broadband has bought 60,000 descramblers at NT$4,800 each and will be selling them to subscribers for NT$5,000, which can be paid in monthly installments of NT$200.

  The operators should also be able to recoup their investments in new equipment and transmission facilities. Eastern Broadband has invested NT$400 million, and China Networks NT$700 million, the companies confirmed yesterday.

  "We haven't used a single cent of government money," China Networks' Chang said.

  Criticism of the government also comes from outside Taiwan. A media research report published Monday by Hong Kong-based Media Partners Asia says Taiwan over-regulates the local cable television industry.

  "The current regulatory environment and the majority of proposed changes to the environment remain unsatisfactory, depriving customers of choice, content and advanced communications services," the paper said.

  The report goes further, saying the government's changes undermine the industry and will prevent the GIO from reaching its own target of broadband cable in 80 percent of households by 2006.

  Vivek Couto, co-author of the report, said, "There are a lot of investors interested, but they're all going to say it's a waste of time if the government doesn't make a rapid shift in direction."

  Taiwan's leading provider threatened to pull the plug on its digital service yesterday if the government didn't get its nose out of the cable industry. "We will simply stop offering the digital service," said Wu. "We can't move. We are bound hand and foot."
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