On Nov. 18 last year, when National Communications Commission (NCC) Chairman Chen Yaw-shyang (陳耀祥) urged cable operators to consider “giving Taiwan Broadcasting System [TBS] a chance” to take over Channel 52, it was widely perceived as an unprecedented and inappropriate move.
Critics said that the cable channel lineup is based on negotiations between cable system operators and channel operators, not the NCC.
The commission, they said, has no right to intervene in negotiations and should not compromise its neutrality by publicly endorsing a network or channel — such as suggesting that TBS, the nation’s public broadcasting group, follow CTi News in controlling Channel 52.
Even before a Nov. 18 news conference — when the commission announced its rejection of CTi News’ license renewal application — NCC commissioners had discussed allowing TBS to join the domestic news block of cable channels: Channels 49 to 58, Chen said earlier this month.
“We think Taiwan needs more public news channels, not just commercial news channels, of which we have plenty,” he said, adding that he had merely “made a suggestion” based on the consensus among NCC commissioners.
Bolstered by the NCC’s endorsement, the management of Chinese Television System (CTS) — the only TBS network that has a news channel license — in December last year announced a plan to move CTS News and Info to Channel 52.
On Feb. 10, the commission confirmed that Homeplus Digital — the nation’s largest multiple systems operator — had applied to broadcast CTS News and Info on the channel.
The NCC should act as an unbiased umpire and set the standard for which news channels can be broadcast in the cable news block, said Weber Lai (賴祥蔚), a professor in National Taiwan University of Arts’ department of radio and television.
“However, most people can see from subsequent developments that the umpire has a preferred candidate to occupy Channel 52 and is clearing all hurdles for it,” he said.
Homeplus had applied to move Global News from Channel 85 to Channel 52, but the commission asked its staff to investigate Global News, its news broadcast rate and percentage of self-produced programs.
These are criteria that the commission set up primarily to evaluate the performance of variety shows or drama channels.
Without explanation, Homeplus withdrew the application.
The commission on Feb. 8 rejected four cable operators’ applications to move CNN News or France24’s English-language channel to Channel 52, saying that having English-language channels in the domestic news block “would not fit the viewing habits of cable subscribers in Taiwan.”
The commission had also approved leaving Channel 52 vacant for now, which all 64 cable systems nationwide — except for 12 cable systems under Homeplus and 10 other cable systems — had agreed with.
An industry specialist, who spoke on condition of anonymity, said that one must consider the business mechanism that has for decades been operating in the cable service industry to understand why most cable operators prefer to leave the channel vacant.
Channel operators typically pay fees to the cable system operators to be included in their cable channel lineups, the specialist said, adding that the system operators should pay the channels to secure authorization to broadcast their content.
TV networks that own several popular channels generally have more bargaining power in their negotiations with cable system operators, the specialist said.
Instead of paying channel lineup fees to stay in the cable news block, they would receive hefty content authorization fees from cable operators, the specialist said, adding that channels with poor ratings must often pay system operators to stay in the channel lineup or a certain channel block, and agree to be paid lower or no authorization fees.
Media reports said that CTS agreed to pay Homeplus NT$18 million (US$635,189) per year if things worked out for it to be on Channel 52 — that would make it the only channel to pay to stay in the cable news block.
CTS has yet to make similar agreements with other multiple system operators.
Prior to being removed from the channel lineup, CTi News reportedly collected NT$400 million per year in content authorization fees from all cable system operators.
News channels in the cable news block are commercial channels that achieve high ratings without government funding, the specialist said, adding that many news channel operators seek to join the block so that they can benefit from the visibility.
CTS is part of the over-the-air broadcasters block — Channels 8 to 16 — but those channels’ ratings have deteriorated over the years, the specialist said, adding that the performance of CTS News and Info, which currently occupies Channel 12, would certainly be scrutinized if it joined the news block.
“The rating of CTS’ evening news does not even come close to the ratings of Taiwan Television [TTV] or China Television [CTV], who are also over-the-air broadcasters,” the specialist said. “Why should the vacant channel be occupied by CTS — and not TTV, CTV or Formosa TV?”
The specialist said that being part of the cable news block would only worsen CTS’ financial woes — as of the second quarter of last year, CTS had accumulated more than NT$5 billion in debt.
A former NCC commissioner told the Taipei Times that the enforcement rules of the Satellite Broadcasting Act (衛星廣播電視法) authorize the NCC to consider whether a proposed change in that channel lineup would protect consumers, facilitate market competition, ensure content diversity and protect other public interests.
That the NCC cited protecting cable subscribers as grounds for rejecting CNN News occupying Channel 52 shows that the commission has decided which channel should fill the vacancy, he said.
Channels 49 to 58 offer too much similar content, he said, adding that having CNN or other English-language channels in the cable news block could stimulate more diverse content.
If the commission allowed CNN News to move to Channel 52, cable operators could ask CNN to cover more local news, which would give the international community more exposure to Taiwan, he added.
A cable news channel’s production costs are about NT$300 million per year, he said, adding that CTS, although part of TBS, would need to generate enough revenue to cover its costs, which is why the channel is struggling financially.
CTS so far stays afloat through income from immovable property, not from broadcasting revenue, he said.
The Ministry of Culture, which oversees TBS, would need to allocate additional funding — taxpayer’s money — to fund CTS so that it could join the cable news block, which the ministry might not approve, he said.
“The fundamental issue facing CTS is its unclear status: whether it should be viewed as a public network or a private network,” he said, adding that taking over Channel 52 would not resolve the issue.
Lai said that the NCC should let consumers decide whether they can accept having an English-language news channel in the domestic news block.
Pushing back against criticism on Facebook, CTS general manager Leon Chuang (莊豐嘉) said that he agreed that the network’s main problem is its unclear status.
Also, cable system operators are not obligated to pay content authorization fees to over-the-air broadcasters, even though they are “must carry” channels, he said.
“Those who say we will definitely lose money if we take over Channel 52 are mistaking the effect for the cause,” he said. “If we had the chance to join the news block, our performance would, of course, sustain us.”
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