The National Communications Commission (NCC) on Jan. 27 approved Far EasTone Telecommunications’ acquisition of the local cable TV operator China Network Systems (CNS), although with a total of 20 conditions, including a requirement that CNS complete the digitalization of content by the end of this year and that Far EasTone not intervene in CNS’ operations.
As the commission approved the acquisition just days after the Jan. 16 presidential election, and before the opening of the newly elected legislature, the public was unable to react to the deal — in which Far EasTone secured the share transfer for the sake of platform integration through a subsidiary of Morgan Stanley Private Equity Asia — in a timely manner.
By doing so, the commission ignored the regulation on the appropriateness of shareholders stated in the newly amended Cable Radio and Television Act (有線廣播電視法), which had been promulgated on Jan. 6.
The commission not only favored the Far EasTone in its handling of the case, but it seriously neglected its duties by doing so.
According to Article 12 of the act, when the commission reviews an application for a share transfer, it should review the appropriateness of shareholders and subscribers of shares with more than 5 percent of the total shares, including both natural and legal persons.
It should also hold a public hearing concerning the promotion of effective market competition, protection of consumers’ rights and other necessary items crucial to the public interest, and it should not approve a deal that might cause any negative impact.
This was the power the act invested in the commission, but the commission chose not to exercise such power.
However, the commission preferred to make the decision before the new government takes office on May 20, apparently preferring to get the deal out of the way before the transfer of government powers takes place.
It is not known whether commissioners really take public welfare and public interest as a priority, or whether they are more interested in helping out big business.
Ever since the movement against media monopolization in 2012, the government has been beset on all sides to amend the Cable Radio and Television Act.
One of the main reasons for such an action was to provide clear and definite regulations for the commission to follow when dealing with similar mergers and acquisitions involving horizontal or vertical integration, or even monopolies, in the telecommunications industry — without worrying about the endless administrative litigation process that it could come up against.
So why was it that the commission decided not to use the newly-amended legislation at a critical moment of government transition?
It said that, as an independent agency, the commission’s operations cannot be affected by the transfer of power.
It held a nominal public hearing on Jan. 22, although it failed to notify concerned parties of the meeting, and none of the commissioners bothered to attend. Five days later, Far EasTone’s application was approved.
The commission seems to think that it is above the public’s concerns about media monopoly and above the law, and that it can defraud the public and evade its oversight through bureaucratic jargon and technicalities.
Civil society should condemn this move.
Eve Chiu is chief executive of the Foundation for Excellent Journalism Award.
Translated by Eddy Chang
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