In order to facilitate greater consumer choice, encourage the sound development of the cable television industry, and protect the interests of viewers, on January 16, 2019, NCC approved the draft revision of Fee-Charging Standards for the Cable Radio and Television System Operators. NCC is currently open to consultations on the draft revision and, on March 14, a public hearing was held to compile feedback from stakeholders on the proposed amendments.
Digital convergence has caused the video industry to flourish, leading to increased competition for traditional multichannel platforms such as cable TV. Since cable networks in Taiwan have reached full digitization, asides from programming, operators have been encouraged to expand services to reach out more consumers, so as to create more business values for the cable TV market. In recent years, NCC has also been encouraging cable operators to offer more basic tier packages; consequently, 28 cable operators were found to be offering multiple basic tier packages in 2018, a significant increase from the 16 that were doing so the year previously. Various special municipal or county/city governments, such as Taipei City, New Taipei City, Taoyuan City, Hsinchu City, Taichung City, Changhua County, and Kaohsiung City, have placed tiered pricing schemes as an item of consideration when reviewing basic tier rates.
According to the proposal, cable system operators shall be required to offer at least two basic tier packages, with all basic channels being provided in High Definition (HD) or Ultra High Definition (UHD). The package of tier one shall include must-carry channels, with a rate cap set at NT$200 per month; for other basic tiers the rate cap shall be NT$600 per month. The second tier shall be defined as the most popular basic tier package of the previous year.
To enable channel businesses to receive more license fees so that content quality can be enhanced and cable operators encouraged to offer more innovative services, the proposal also conditionally lifts the price cap; in other words, cable operators shall be permitted to offer basic tier package at more than NT$600 per month on two conditions: the first being if the license fee accounts for 50% or above of the basic tier subscription revenues; the other condition being that the content, quantity, and quality of the channels in the package are significantly higher than the basic second tier.
All basic tier packages applications shall be thoroughly assessed by the relevant special municipal or county/city government with view to ensuring protection of consumer rights. The amendment also proposes that the price cap will be adjusted according to the general consumer price indices growth rate compared with the previous year, so as to reflect the level of consumer prices in the economy and promote industry development.
The proposal also stipulates that cable operators should offer pay channels or bundled services besides basic tier packages, and cable operators should not be able to refuse pricing of premium channels offered by channel companies without a justified reason.
If the amendment passes, consumers will be able to choose whether to stay with their current basic tier package, opt for a newer on for a fee of no more than NT$200 per month, or other plans offered by the cable operators, depending on their needs.
NCC shall run consultations on the draft amendments until May 3, 2019.
Chairperson (Director Wang, De-Wei) of the public hearing explains the draft
Public hearing on the draft revision