The BCC is failing on every count

By Lo Shih-hung and Chad Liu 羅世宏 劉昌德
 
Taipei Times, Tuesday, Jul 03, 2007, Page 8

The National Communications Commission (NCC) has given its approval to a transfer of stocks in the Broadcasting Corp of China (BCC), a decision that displeased the Cabinet.

Ownership restrictions are crucial in determining whether the media environment will improve or deteriorate further. The central issue of the transfer should not be turned into a weapon in the fight between political parties.

The commission has not published its investigation into the viability of the transfer and it based its decision on the promises of the buyer rather than on a substantive review.

This is unacceptable. We appeal to the commission to immediately publish the contents of its investigation, hold a public hearing and reconsider its approval of the transfer of BCC shares.

In late January, suspicions rose that former UFO Radio chairman Jaw Shaw-kong (趙少康) was planning to take over the shares using four front companies. There were also claims that the firms were undercapitalized, questions about where the stated capital came from and other problems. The NCC reacted by saying that apart from demanding that the party concerned fix these problems, it would start an investigation together with the Investment Commission and the Financial Supervisory Commission. At that time, the NCC was handling the case in a suitable way.

But after waiting five months, we still haven't heard if the four firms were real companies. If the NCC had arrived at a judgment based on months of investigations, why should the party concerned need to be guaranteeing anything?

The NCC has also yet to publish the results of another investigation it has been conducting for six months. That probe was to answer questions such as whether the four companies were front companies, what the source of their investment capital was and whether this would result in a media monopoly. The public has a right to know, and the NCC should publish the results as soon as possible to gain the public's trust.

The BCC's promises that political parties, the government and the military would withdraw from the media and that there would be no investment from China, Hong Kong or other overseas investors are an entirely inappropriate basis for the NCC to approve a transfer. This is just as absurd as, say, the abolition of driving tests and traffic violation data. It is like making someone sign a document saying: "I promise I will not break any rules," and then give them a driving license without a second glance.

The withdrawal of political parties, the government and the military from media operations and a block on foreign investment in the broadcasting industry are all clearly specified in legislation. The question of whether the transfer of BCC shares to the four companies allegedly related to Jaw is legal should be investigated by the NCC -- as the authority in charge -- on its own initiative and be based on evidence. How then can they base their approval on verbal or written promises by a party that it will not break the law?

As to influence from cross-media ownership accumulating for one person, the NCC believed a promise that a shareholding in UFO Radio held by Jaw's wife, Liang Lei (梁蕾), will be reduced to less than 10 percent within six months of BCC approval. This in itself constitutes a serious violation of the law.

According to Clause 18 of the Enforcement Rule of the Broadcasting and Television Law (廣播電視法施行細則), a transfer of shares of a media business will not be approved if the person receiving the shares holds more than 10 percent of the firm's stock. If the person who is to receive the shares does not comply with this rule, the NCC should not approve the transfer, as the law says. But now that the NCC has apparently given up its responsibility as a watchdog, all of this boils down to letting it do whatever it wants.

On the issue of a media monopoly, letters containing arguments for and against the transfer that NCC spokesman Howard Shyr (石世豪) brought up at a commission meeting in mid-February are especially worth referring to. We agree with Shyr that with this transfer of shares, Jaw will control more than 90 percent of BCC shares. In addition, his wife still holds more than 30 percent of the shares of UFO Radio, meaning that this already constitutes a monopoly.

The combined coverage of the two broadcasting networks is more than 20 percent, the audience in all areas varies between 20 percent and 50 percent, and they get more than 30 percent of commercials. The BCC, for a very long time, has also had the most analog radio frequencies. From these numbers it is clear that the moment the transfer was approved, a monopoly resulted.

Pan-blue and pan-green-camp politicians should not obscure the seriousness of this problem for their political ends. When approving such a large transfer of media shares, the BCC should conduct substantial research and not take lightly the task that the public has entrusted it with.

 

Lo Shih-hung is founder of the Campaign for Media Reform. Chad Liu is an assistant professor in the Department of Communications at National Chung Cheng University.

  Translated by Anna Stiggelbout