Dafu Media (大富媒體), the largest shareholder in the multiple system operator and cable channel agent Kbro Co, was asked to provide supplementary information justifying charging cable system operators a minimum guaranteed price, the National Communications Commission (NCC) said yesterday, following the Fair Trade Commission’s ruling against Kbro and two other cable channel agents last month.
The FTC ruled that Kbro, Global Digital Media Co and Best News Entertainment Corp should be fined a total of NT$126 million (US$4 million) for charging cable TV operators different prices without legitimate reasons when they acted as agents to negotiate authorization terms on behalf of cable TV channels.
NCC spokesperson Wong Po-tsung (翁柏宗) said that the commission decided to launch an investigation because Dafu had made a list of promises to the commission before it was granted permission to buy Kbro in 2010, including that it would give each channel operator fair, reasonable and equal access to the channel lineup on its cable TV system.
Wong said that Kbro president Wang Hong-shen (王鴻紳) answered various questions from NCC commissioners yesterday morning, adding that officials probed the company on whether it had discriminated against or banned any channel from being viewed on other platforms.
The commissioners also asked Wang if Kbro, as a cable channel agent, had signed an agreement with channel operators on the payment of a minimum guaranteed authorization charge that was equivalent to 15 percent of revenue from households subscribing to cable services, Wong said, adding that this could be one of the reasons that Kbro charges new cable system operators minimum charges.
Wong said that Wang disagreed with the results of the FTC’s investigation and claimed that whatever the company had done was legal.
“He [Wang] also said that the minimum guaranteed charge is a business practice that has been in use for years,” Wong said.
“As such, the commissioners wanted him to provide additional information to support his argument for a common business practice. They will five days to submit the information,” Wong said.
However, Wong said that the FTC report showed that Kbro did not charge other cable operators a minimum guaranteed charge.
Meanwhile, after consultations, the commission has decided to launch separate investigations into Global Digital Media Co and Best News Entertainment Corp, he said.
Global Digital Media is affiliated with China Network Systems.
Best News Entertainment, affiliated with ERA Communications chairman Lien Tai-shen (練台生), owns a cable TV system on the east coast.
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