Eastern Home Shopping and Leisure Co (EHS) yesterday vowed to seek administrative solutions after its application to create three new home shopping channels was rejected by the National Communications Commission (NCC) on Wednesday.
EHS owns the nation’s largest home shopping network, with five home shopping channels that air on cable and Chunghwa Telecom’s multimedia-on-demand (MOD) system, the commission said, adding that the three proposed channels would mainly air on the MOD system.
NCC commissioners examined the materials presented by the company about plans for the new channels and found that they differ little from the five existing channels, the commission said.
EHS has accumulated numerous fines from local health departments for contravening regulations governing the sale of food, drugs and cosmetics.
Although it had obtained an ISO-27001 certification for its personal data protection system, the certification expired in January and has not been renewed, the commission said, adding that it questioned the company’s ability to protect consumers’ data.
In light of these shortcomings, the commission rejected the company’s application.
In response, EHS said that it would fight the ruling in administrative court.
“The ruling goes against the government’s policy to boost the nation’s economic development. Unlike shopping network Momo, which makes more than NT$40 billion [US$1.3 billion] per year, our network’s annual revenue is about NT$15 billion to NT$18 billion. There is no way we can monopolize the home shopping market,” EHS said in a statement.
EHS reiterated that the three new channels would only air on the MOD system, as the company is targeting different consumer segments.
The company said that it planned to recruit more than 100 new employees for the new channels, but was forced to halt recruitment because of the NCC ruling.
Although the existing five channels have the most fines for breaches of government regulations compared with its peers, the company said that it has improved its internal operations.
“We have also given our word to NCC that we would reduce the number of contraventions, and the commission can revoke our license if we fail to deliver on our promise,” EHS said.
Disputes can be expected when people purchase products on home shopping channels, but these purchases account for a very small percentage of its 7 million transactions per year, it said.
Disputes with consumers would all be properly handled, it said, adding that its shopping channels have won several service awards over the years.
In related news, the NCC yesterday held a public hearing on whether it should approve the license renewal application filed by Globalview Cable, the first time that it held a hearing on the issue as the case might contravene broadcast media regulations.
Globalview’s shareholders include Taipei Fubon Bank, Hon Hai Precision and other companies that have received investments from government funds, NCC spokesperson Hsiao Chi-hung (蕭祈宏) said, adding that this might be a contravention of regulations banning investments by political parties, the government and the military.
Globalview is one of the five cable systems owned by TWM Broadband, which is owned by Taiwan Mobile.
Taiwan Mobile’s chairman Daniel Tsai (蔡明忠) founded Dafu Media, which owns multiple-system operator Kbro Co.
Hsiao said the commission was concerned if this case might infringe on regulations limiting the number of cable service subscribers owned by an operator to no more than of one-third of total cable service subscribers across the nation, if one were to consider the combined total number of subscribers of TWM Broadband and Kbro Co.
After collecting opinions yesterday, the commission said it would make a decision on Wednesday next week.
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