NCC Calls for Public Opinion on its Draft of the Radio and Television Enterprises and Channel Enterprises Administration Act

TAIPEI, November 13, 2015 – During its 665th Commission Meeting held on October 14, 2015, in line with its objective of promoting the revision of convergence acts, the National Communications Commission (NCC) reviewed the draft of the Radio and Television Enterprises and Channel Enterprises Administration Act (hereinafter referred to as “the Draft”). Although the content has not been fully evaluated, the meeting passed a resolution to release the present version of the Draft to the public and call for public opinion. Once the feedback has been compiled and reviewed, the NCC will proceed with the revision and finalization of the contents.

According to the NCC, the restriction on political parties and the government investing in radio and television businesses, as stipulated in the three current radio and television acts, in certain aspects, has actually had a detrimental effect on radio and television businesses. Thus, the justifiability of the three radio and television acts is being questioned. At present, the draft of the Political Party Act, as outlined by the Executive Yuan, stipulates that a political party may not operate or invest in a profit-seeking enterprise, while the Budget Act regulates the planning and implementation of government budget, which is also overseen by the Legislative Yuan. A second stage revision of laws and regulations shall focus on managing the source of concern so that regulating political and government investments in radio and television businesses by means of the Budget Act, as well as the planned Political Party Act, should be efficient enough and more practical.

The Radio and Television Act currently prohibits foreign investors from holding shares of radio and television businesses. However, in order to boost industry development, the commission is considering whether to allow certain foreign investment and is referring to laws and regulations of other countries that do so. Japan, for instance, sets an upper limit of 20% while the US allows 20% of shares to be held directly and 25% indirectly by foreign investors.

The Draft currently states that a foreign entity may not invest directly in a radio and television business, but may hold up to 20% of shares indirectly. At the same time, the Draft restricts a non-national from being the promoter, director, or supervisor of an invested business. In short, a foreign individual or agency may only act as an indirect shareholder and may not be involved in the operation and management of an invested radio and television business. Furthermore, in order to safeguard the viewing rights and interests of the public and promote the sound development of the industry, the Draft allows the regulatory agency to disapprove stock transfers of certain value or those involving direct or indirect acquisitions of controlling and operation rights.
 With regards to capital from China, Article 73, Paragraph 1 of the act governing relations between Taiwan and China and the Investment Commission’s “Positive List for Chinese Investments—Enterprise Categories and Items Allowable for People of Mainland Area to Invest” both stipulate that radio and television enterprises, including radio broadcasting and television, domestic and foreign satellite broadcasting and television, and cable radio and television enterprises, are prohibited categories of investment.

The NCC stressed that any adjustments to regulations concerning radio and television must be made in response to the trend of digital convergence. By means of self-disciplinary mechanisms of enterprises and professional independent operations, the social responsibilities of enterprises can be enhanced so as improve the viewing rights and interests of the public, as well as protect cultural diversity in broadcasting.

The Draft places emphasis on gradual convergence and maintains the current vertical regulation structure, while gradually shifting towards layering management. For example, instead of demanding radio and television businesses to establish their own networks, the Draft allows them to commission another enterprise to broadcast, co-establish a broadcasting network with another enterprise, or hire a transmission network. Moreover, satellite channels that are presently broadcasting through the cable television platform may also broadcast through terrestrial television platform following the revision of these regulations.

To enhance self-discipline and responsibilities to the society, the Draft also plans to ensure companies limited by shares or public companies make up the majority of enterprises. Moreover, to increase flexibility in operating a radio and television business in the future, a business may share modulated transmission capacity with other terrestrial broadcasters once it has been approved by the regulatory agency, consequently reducing obligations of businesses to apply for equity transfers or changes of operation, etc.

With regards to ensuring greater transparency of business and industry dynamics, the Draft stipulates regulations of simultaneous broadcasting and operation affiliation. In order to mange channel agents, which can have a significant impact on whether certain channels be broadcast on platforms or not, the Draft requires agents to register with and submit channel authorization contracts to the regulatory authority for reference. Finally, in response to technological development, the Draft has updated its provisions to allow radio broadcasting and television businesses to offer non-channel application services, and has relaxed time restrictions on advertisements, as well as stipulated incentives for promoting quality and culturally diverse productions.
Since the NCC began the process of the drafting of the convergence acts in 2013, it has called for public opinions on major topics of the convergence act eleven times. As of September 2015, a total of 53 task force meetings had been held within the commission to outline the directions and contents of five codes of laws. The draft of the “Radio and Television Enterprises and Channel Enterprises Administration Act” that the NCC published on October 15, 2015, is one of the five codes; it includes 10 chapters and 116 articles. The public is hereby invited to visit the “Opinion and Response” area under the Convergence Act Section on the homepage of NCC’s website: www.ncc.gov.tw/.

NCC welcomes the public to offer its thoughts or suggestions on these issues; please log in via citizen digital certification or cooperative certification to submit your ideas.