Tue, Sep 02, 2003 page10

• New GIO head has to juggle cable TV, consumer concerns

  • By Bill Heaney / STAFF REPORTER
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  The new Government Information Office (GIO) director-general, Huang Hui-chen (黃輝珍), pledged to do more to promote digital television services in Taiwan yesterday amid scathing criticism from the local cable television industry of over-regulation by various levels of government.

  "We hope to provide a very fair and competitive environment for all related parties," Huang told industry leaders at the Taiwan Digital Cable TV summit in Taipei yesterday organized by Hong Kong-based research firm Media Partners Asia Ltd and the Cable Broadband Institute in Taiwan (台灣有線寬頻產業協會), which represents the three largest cable operators here.

  "It is very feasible for us to provide greater, more varied and higher quality programming and services to the consumer and to guarantee that system operators can gain a reasonable rate of return on their investment. On the other hand we also have to protect consumers," Huang said.

  The industry complains the over-regulation has jeopardized the roll-out of digital services for Taiwan's viewing public.

  Companies want the freedom to set their own subscription rates, to package together groups of channels for premium rates as in other developed countries, and to charge customers the production-cost price of the descrambler set-top boxes needed to decode digital signals, but the government has placed restrictions on all three of these areas.

  Huang committed the GIO to an immediate program of educating local consumers about the benefits of digital services as a counterbalance to the public's negative impressions of the cable industry and to promote his own office's target of having 80 percent of the nation's households using digital services by 2006.

  But he faces a hard task winning back the support of the three largest operators: Taiwan Broadband Corp (台灣寬頻), China Network Systems (中嘉網路) and Eastern Multimedia Co (東森媒體科技), which have invested vast sums in new digital services.

  A decision last week by Taipei City Government to cap the fee for digital set-top boxes at NT$3,500 has forced them to re-evaluate the development of the service this year. The industry claims the production-cost price to be around NT$5,000 for each box.

  "There will be no more unnecessary investment -- it's very simple," Eastern's chief executive officer, Charles Wu (吳中立) said, calling on the central government and local cable providers to stump up the NT$1,500 shortfall to make sure the digital roll-out continued. "I don't want to make money on the box, but I'm not prepared to take a loss."

  "We don't feel our investment has been wasted," said Daniel Cheung (張鎮安), chief operating officer of China Network. "We feel business opportunities in the market have been wasted."

  China Network has invested US$240 million in the new digital service, but has only been able to sell 2,000 set-top boxes to date due to conflicts between local and central government that have delayed the issuing of licenses and caused confusion among the public about the new service, Cheung said.

  Taiwan's cable industry has grown from a chaotic mess of illegal services offering poor content at inflated prices, but the subsequent culture of regulation is now discouraging any further development of new digital services and costing jobs, Media Partners said yesterday.

  The industry agrees, saying market forces should be the only regulator of the industry.

  "[The regulation system] takes away all incentive for an operator to improve his programming," said Taiwan Broadband CEO David Dea. "The operator should be allowed to package content or price accordingly, then let the consumer decide."
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