Fri, Jan 15, 2010 page3

• FEATURE: Ownership of media stock still a touchy issue

  A QUESTION OF INFLUENCE Proponents and critics seem to agree that the law should focus more on the issue on who controls an outlet rather than size of stake

  • By Shelley Shan / STAFF REPORTER
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  When the Legislative Yuan passed an amendment to the Broadcasting and Television Act (廣播電視法) in 2003 banning the government, political parties and the military from holding stock in the media, it was regarded as a milestone in the nation’s pursuit of true democracy.

  The amendment was designed to free the three terrestrial television stations — Taiwan Television (TTV), China Television Co (CTC) and Chinese Television System (CTS) — from political interference.

  All three stations had long been viewed as mouthpieces of the Chinese Nationalist Party (KMT) government, advocating its political agenda and helping swing public opinion during elections.

  Just six years later, however, the National Communications Commission (NCC) has proposed easing restrictions on government investment in media groups.

  The commission has proposed two amendments to the Satellite Broadcasting Act (衛星廣播電視法). One would cap both direct and indirect investment in the media from political parties at 10 percent, the other would allow them to indirectly hold 10 percent of shares.

  NCC Commissioner Weng Hsiao-ling (翁曉玲) said that according to the National Communications Commission Organization Act (通傳會組織法), it must “uphold the principle of the government, political parties and the military withdrawing from the media.”

  It has strictly followed this requirement, but has encountered some tricky situations when implementing the policy, she said.

  “Media companies can now trade on the stock market and it is impossible for us to stop someone from purchasing their shares, including the National Stabilization Fund (國安基金),” she said. “The amendment essentially contradicts the rules of the free market.”

  Weng said that the commission had proposed the amendments because the three media laws — the Broadcasting and Television Act, the Satellite Broadcasting Act and the Cable Television Act (有線電視法) — only authorizes the punishment of media groups, not investors.

  This means that if the government invested in a media group, only the company would be punished, not the government.

  This was unreasonable, she said, adding the proposed amendments would bring the laws governing the media more in sync with capital markets. Instead of focusing solely on the shareholding requirement, the commission would also examine if the government, political parties or the military actually controlled the operations of a particular media group by having representatives hold management positions or serve on the board of directors.

  Since 2003, the restrictions on investment have resulted in some controversial rulings by the commission. Four years ago, Chunghwa Telecom had to forgo its attempt to operate channels on its multimedia-on-demand (MOD) system because the Ministry of Transportation and Communications owns one-third of the company.

  When applying for a channel operator’s license, Elta TV was given three months to resolve the same issue because four major government funds held 2 percent of one of its biggest shareholders, Delta Electronics.

  Five cable TV channels owned by Taiwan Mobile Co were each fined NT$100,000 after it was discovered that the Taipei City Government had indirectly invested in them. The city government owns 15 percent of Fubon Financial Holding Co through a merger between the city-owned Taipei Bank and Fubon Bank in 2005 and Fubon Financial was an investor in Taiwan Mobile.

  Huang Chin-yi (黃金益), deputy director of NCC’s operational administration department, said it was difficult to sort through the different tiers of investment.

  “We’ve found government investment at the fourth tier and even the eighth tier of the shareholding structure,” he said. “The administrative resources required to keep track of these investments are enormous. It’s rather tiring, too.”

  The commission’s proposal to loosen restrictions, however, has drawn mixed reactions from the media industry and experts.

  Hu Yu-wei (胡幼偉), a professor at National Taiwan Normal University, said the amendments appear tailor-made to resolve Chunghwa Telecom’s MOD problems. They also appear aimed at providing funding for TV stations hurt by the recession.

  The NCC was “looking for trouble” with proposed amendments, he said.

  “How are they going to determine if a certain person had bought shares as an investment or with the goal of controlling a company? The legislation passed in 2003 had strong public support. All the NCC needs to do is stick to that principle,” he said.

  He also said the Budget Act (預算法) should be amended to stipulate that the government cannot use its promotional budget to embed its agenda in media content. The commission should still use the shareholding requirement to protect media from any political interference, he said.

  Weber Lai (賴祥蔚), director of the Applied Media Arts Graduate Institute at National Taiwan University of Arts, said that the fact that media outlets such as National Education Radio or Kaohsiung City-funded Kaohsiung Broadcasting Station still exist shows that the government, political parties and the military have not completely withdrawn from the industry.

  “Instead of adhering to a policy that is problematic in executing, why don’t we change it a little, so long as we do not compromise on the values of an independent media?” Lai said. “The percentages allowed for both direct and indirect investment can be negotiated.”

  Chuang Chuen-fa (莊春發), a professor at Jinwen University of Science and Technology, said that setting a threshold of 5 percent or 10 percent was meaningless.

  “Having 5 percent of the shares in a large company may not qualify a person to hold a seat on its board,” he said. “But having the same number of shares in a small firm could make a difference.”

  Chuang agreed, however, that that commission should focus on the actual actions of those who control the media.

  Chen Chao-ping (陳朝平), chief executive officer of the Cable Broadband Institute in Taiwan (CBIT), said that the commission should just lift the restrictions on such investment because it is no longer an issue.

  “In the past, there were only three terrestrial television stations, and nearly all management positions were held by members of the ruling party,” Chen said. “Now, there are more than 100 cable channels and the Internet has broadened the definition of media to include services like mobile TV, IPTV or MOD.”

  “I don’t think that political parties or the government can still control all the media, and nor do I think that media promoting a particular political ideology can still win the hearts of audiences. The NCC should remove the restrictions completely and just let the public know who has shares owned by the government,” Chen said.

  Chung Kuo-chiang (鍾國強), senior director of Chunghwa Telecom’s legal affairs department, said that the 2003 legislation failed to free the media from political influence, because people can still distinguish between “pan-blue” and “pan-green” media.

  “The amendment only suffocated the development of the digital content industry.” Chung said.

  Former NCC commissioner Liu Yu-li (劉幼琍) believes it is time to adjust the law, although she doesn’t agree with lifting the restrictions.

  “The word ‘media’ in all three broadcasting laws referred to the three terrestrial TV stations, radio and satellite TV stations, but now the NCC probably has to redefine the word because the distinctions are now blurred because of the convergence of digital technology,” she said.

  Liu Chang-de (劉昌德), convener of the Campaign for Media Reform, said political parties cannot be allowed to invest in media and that principle should be non-negotiable.

  “Political parties with huge financial resources will wield their influence over the media, which may hurt economically disadvantaged parties. Rather than allow the government to invest in the media, it is more practical for the government to set up a fund to cultivate the broadcasting industry,” Liu Chang-de said.
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