Liberty Times (LT): How do you view the blitzkrieg approval [by the National Communications Commission (NCC)] of FET’s acquiring of CNS [through bond purchases of Morgan Stanley Private Equity Asia’s subsidiary North Haven Private Equity Asia IV LP, which in turn bought a 60 percent stake in CNS from South Korean private equity firm MBK Partners LP]?
Huang Kuo-chang (黃國昌): In short, the public was blindsided by the Fair Trade Commission (FTC) and the NCC. They rammed the deal through when the legislature was out of session and in the middle of a busy campaign season [for the Jan. 16 elections], when everyone was distracted.
The NCC held its public hearing 10 days ago on the pretext that the FTC had already approved the case, and the hearing itself was a staged performance, with no NCC members attending, and criticism of the deal ignored. Two days later, the deal was put on the NCC’s agenda, followed by its quick approval.
Photo: Lin Cheng-kung, Taipei Times
LT: The average person does not understand the far-reaching significance of FETs purchase of CNS, and they do not understand your anger and anxiety. Can you, in broad strokes, explain this issue?
Huang: The public frequently shops in convenience stores, where products that do not meet the supply chain’s preconditions will not be found. When we are not happy with one convenience store, we can go to another. However, we do not have any choice in our cable television network systems. The only choice is to accept or reject watching cable altogether. The decline of wireless television has only increased our dependence on cable television, and whoever controls cable, controls the tastes and opinions of the audience. One of the main controversies of the CNS deal is whether FET possesses the integrity to manage media corporations.
LT: What are your concerns?
Huang: The influence exerted by corporate interests are rarely detected by most people … but the previous prospective buyer of CNS was Ting Hsin International Group. The deal breaker was Ting Hsin’s tainted cooking oil scandal, and the public’s recognition that once Tsing Hsin controlled the media, no one would be able to report on news of tainted cooking oils. If Tsing Hsin did not hold consumer rights in utter contempt, there would not be a campaign to destroy Ting Hsin [the boycott of its products called for by citizen groups].
A supply chain giant is like the invisible hand. It “disciplines” the consumer’s understanding and knowledge of important topics.
LT: How do you view the performance of NCC members in FET’s purchase of CNS?
Huang: A charitable interpretation is gross dereliction of duty. The most severe criticism is that they are “suspected” of engaging in aiding and abetting.
LT: It seems the biggest contention is that FET [whose 2.89 percent stake is owned by four government funds] flagrantly challenged the laws excluding investment in media by governmental, military or political parties, and the NCC turned a blind eye.
Huang: The laws banning government, military and political party investment in media groups have a deep historical context in Taiwan, but they are also obstacles to corporate profits. The legislature last year proved unable to reach a consensus in repealing the laws; therefore they remain the law of the land. No single corporate entity can be allowed to manipulate designer financial architectures to bypass regulations, achieve substantive control [of cable TV] and turn laws to dead letters.
The buyer in the CNS deal is a Morgan Stanley subsidiary, which has never had commercial operations in Taiwan, and has no managerial staff for a vast cable TV system. It is merely a financial consultancy that fit the legal requirements from which to build an architecture to circumvent the laws relating to investment in media by the government, military and political parties.
From the FTC to the NCC, all that was done was a once-over of form and appearance. They say that as FET was only buying debts, and that it would not be a stockholder or have presence on the board of managers; that the deal is legal.
The NCC is dancing to corporate tunes and it spells the abandonment of its duties as a regulatory watchdog.
LT: The NCC said it had demanded that the cable TV operator make 20 guarantee clauses, but was silent when asked what enforcement mechanisms would be put in place if the operator failed to abide by them.
Huang: The guarantee clauses are a paper tiger and a joke. The NCC had in previous cases amended a great many guarantee clauses to purchase deals. They were broken. The NCC did nothing and continues to do nothing. The NCC was asked what it would do if FET was found to have been involved in the investment in or management of CNS. The NCC said that it would follow the law, but the law applies only to CNS, not FET. The NCC’s non-response confirms fears and doubts: It is an impotent regulator.
LT: Is it not true that, after the NCC approved this deal, it is extremely difficult to enforce any kind of regulation on this monster of a cable system operator, and for this the reason, prior inspection of deals is crucially important?
Huang: This cohort of NCC members rammed the CNS deal through; the regulatory burden will fall on the next group of members and that is very important. The NCC is an independent group and its members have fixed terms of service. Any mishaps in picking its members have serious implications, as we all see.
However, I must admit that legislators have no investigative powers. New members of the legislature can, at most, demand the NCC submits formal reports, and question its members on that basis. NCC members are not legally bound to answer questions or to answer truthfully [when they do]. Under the current system, the legislature is hard pressed to make the NCC accountable, and the issue highlights the necessity of legislative reforms.
LT: The terms of current NCC members are to expire in late July. Do you see that as an opportunity for change?
Huang: We already have an object lesson and it is clear that president-elect Tsai Ing-wen’s (蔡英文) administration is going to have to be careful in nominating NCC members, and the legislature must take case in scrutinizing them. We should subject former, current and nominated NCC members to sustained scrutiny, understand the actual state of their interactions with media corporations and their peripheral organizations.
Closer attention must be given to patterns in the corporate patronage of academics. For example, corporate groups often direct millions [of New Taiwanese dollars] to various foundations, or distribute academic research grants through them, which are taken up as contracts to academics. They are well-paid regardless of the quality of research. Those methods form the triangular relationship between corporations, media and academia.
New members of the legislature must demand incoming NCC members make concrete promises before their appointments, to the effect that they conduct a comprehensive review of the guarantee clauses made with media owners and that real actions follow if operators fail to abide by those terms.
Translated by staff writer Jonathan Chin
Taiwan was listed in 14th place among the world's wealthiest country in terms of GDP per capita, in the latest rankings released on Monday by Forbes magazine. Taiwan's GDP per capita was US$76,860, which put it at No. 14 on the list of the World's 100 Richest Countries this year, one spot above Hong Kong with US$75,130. The magazine's list of the richest countries in the world is compiled based on GDP per capita data, as estimated by the IMF. However, for a more precise measure of a nation's wealth, the magazine also considers purchasing power parity, which is a metric used to
Taiwan yesterday expelled four China Coast Guard vessels that entered Taiwan-controlled restricted waters off Lienchiang County (Matsu) shortly after the Chinese People’s Liberation Army announced the start of its “Joint Sword-2024B” drills around Taiwan. The Coast Guard Administration (CGA) said in a statement that it had detected two China Coast Guard ships west of Nangan Island (南竿) and another two north of Dongyin Island (東引) at 8am yesterday. After Chinese ships sailed into restricted waters off Matsu shortly afterward, the CGA’s Kinmen-Matsu-Penghu Branch deployed four patrol vessels to shadow and approach the vessels, it said. The incidents pushed up to 44 the number
Renovations on the B3 concourse of Taipei Main Station are to begin on Nov. 1, with travelers advised to use entrances near the Taiwan Railway or high-speed rail platforms or information counter to access the MRT’s Red Line. Construction is to be completed before the end of next year, Taipei Rapid Transit Corp said last week. To reduce the impact on travelers, the NT$95 million (US$2.95 million) project is to be completed in four stages, it said. In the first stage, the hall leading to the Blue Line near the art exhibition area is to be closed from Nov. 1 to the end
Taipei’s Ximending (西門町) shopping area welcomed the most international visitors, followed by Taipei 101, Songshan Cultural and Creative Park and Yangmingshan National Park (陽明山國家公園), a list of the city’s most popular tourist attractions published by the Taipei Department of Information and Tourism showed. As of August, 69.22 million people had visited Taipei’s main tourism spots, a 76 percent increase from 39.33 million in the same period last year, department data showed. Ximending had 20.21 million visitors, followed by Taipei 101 at 8.09 million, Songshan Cultural and Creative Park at 6.28 million, Yangmingshan at 4.51 million and the Red House Theater (西門紅樓) in
RSS