The Control Yuan yesterday issued corrective measures against the National Communications Commission (NCC) for failing to arbitrate a dispute between Formosa TV and cable system operators, and instructed the agency to reestablish order in the cable television industry and create a mechanism to facilitate fair competition.
The measures were announced following an investigation by Control Yuan members Wang Yu-ling (王幼玲) and Wang Mei-yu (王美玉).
Taiwan’s cable television market is dominated by five multiple-system operators (MSOs) that not only own the cable systems, but also control access to some TV channels, the members said in a joint statement.
“This has affected competition in the market and compromised broadcast media diversity,” the statement said.
Channel operators and MSOs have been negotiating on unequal footing, they said, adding that cable system operators can arbitrarily decide the number of channels to be bundled together, determine a channel’s location in the lineup and set the subscription price for a channel, as well as how subscription fee revenue should be divided between them and channel operators.
Channel operators have no say in these matters and can only allow cable providers to change the locations of their channels in the lineup at will and receive about 25 percent of cable subscriber revenue, the investigation showed.
Even though the commission began drafting new regulations after the Executive Yuan laid out guidelines for the development of the digital convergence era in 2010, the agency has yet to finish its research, the members said.
The commission’s failure to stipulate new regulations has led to cable television competing against Internet protocol TV and over-the-top TV providers on unequal footing, the members said, adding that current regulations are so outdated that they cannot cope with the challenges brought by an increasingly competitive market.
Channel operators have seen their advertising revenue shrink as online media rises, the members said
The funding shortfall has made them unable to produce quality programs and has caused them to lose not only local audiences, but also a substantial number of skilled professionals to overseas content producers, they said.
Although the commission has taken some actions to rectify the situation, it has not taken a stand on several policies, including implementing a tiered pricing scheme for cable system subscribers and a reasonable division of profits between cable and channel operators, the members said.
The Control Yuan in a previous investigation pointed out the problems caused by the MSOs’ control of both cable systems and channels, but the commission has been slow in proposing regulations to address these problems, they said.
The agency’s negligence has caused the mechanism that oversees cable services to impede the healthy development of the cable service market and has restricted people’s access to diverse information, they said.
The members also censured the commission for failing to arbitrate a dispute between Formosa TV and cable operators, which resulted in viewers being unable to access Formosa TV content on May 4.
The commission should use this incident as an example to prevent a similar incident from happening again, they said.
The commission said it has yet to receive official documentation from the Control Yuan, but would quickly discuss and adjust its policies to comply with the corrective measures.
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