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Government Information Office
Executive Yuan
Republic of China (Taiwan)
August 29, 2005
I. Foreword
II. Legal Basis
III. Media Characteristics
IV. License Renewal Process
V. Review Results
VI. Future Prospects
VII. Conclusion
I. Foreword
Broadcasting businesses around the world¡Xbe they radio stations, or terrestrial, cable, or satellite television channels¡Xrequire an operations license. Applications must be filed for review by regulatory authorities before a license can be issued, which also must be renewed before expiration. Although this is a common practice throughout the world, each country adopts a different management style and degree of leniency. Among advanced democracies, the United States upholds the principle of free market competition and respects the market mechanism. Its government intervenes to make adjustments only when the market mechanism fails. European countries base their systems on social principles and values, whereby the governments draw up plans and promote public broadcasting systems (which may co-exist with commercial-carrying broadcasting systems). Each system has its own merits and demerits. Taiwan adopts a system that attempts to draw upon the merits of both the European and US systems.
Based on Article 3 of the Satellite Broadcasting Act, the Government Information Office (GIO) serves as the regulatory agency for satellite broadcasting businesses. In this first batch of license and permit renewals for satellite broadcasting businesses, the GIO took a vigorous approach, while respecting the Review Committee¡¦s resolutions and acting in accordance with the law. Almost all major satellite broadcasting businesses had channels that underwent this recent round of license and permit renewal reviews.
This marked the first time that license and permit renewals were reviewed since the Satellite Broadcasting Act's implementation in 1999. Licenses or permits of a total of 83 channels were about to expire, with those of an additional four channels to expire at the end of this year. Of these, 70 channels filed applications for license or permit renewal, including those that feature variety programming (32), movies (8), general news (7), financial news (5), sports (3), children's programming (3), religious programming (3), adult programming (3), music (2), information (2), and folk programming, as well as UFO station. The 13 channels that did not file license or permit renewal applications were as follows: TNT & Cartoon Network, Yingtao channel, Sijihong channel, Pingguo channel, Jhonghua Enterprise, Syuejhe financial station, Syuejhe movie station, Web and Satellite TV station, Jhongyuan satellite television station, Hakka satellite television station, Jhensiang political and economics news network, Guobao satellite television, and Huasong television station.
License and permit renewals are aimed at creating a healthy and positive media environment in response to society¡¦s long-held and well-intentioned hope for an improved media culture. The process can definitely bear up to scrutiny from all sectors of society and is totally unconnected with the issue of ¡§press freedom¡¨ as has been suggested by some local figures and international press organizations. Outside attention has exaggerated the review as an issue of press freedom, ignoring public interests, which are the real core of this issue. This is a narrow perspective and does not ¡§see the forest for the trees.¡¨ The media often make mention of the government¡¦s influence on press freedom. If the powerful media are to pursue only commercial interests with complete disregard for the public¡¦s expectations, while the public is reduced to helplessness through a weakening of their powers of supervision, should the government ignore the responsibilities with which it is endowed?
From the very beginning, the recent license and permit renewals had attracted attention nationwide. Now that the review has been completed, the GIO has made this report to help the public better understand the renewal operations and to facilitate communication with all strata of society. The report will discuss the legal basis of the operations, media trends, the process and results of license and permit renewals, and future prospects.
II. Legal Basis
In response to international media trends and the impact of satellite television on the broadcast media market, the GIO convened its first meeting on drafting the Satellite Broadcasting Act on December 2, 1994. This was in part to effectively regulate the programming of and advertising on foreign and direct satellite TV channels, and to develop Taiwan into an Asia-Pacific media center. After a total of seven law-drafting meetings, three public hearings, 28 rounds of negotiations on different versions of the law, and eight sessions of joint committee review in the Legislative Yuan, the Satellite Broadcasting Act was finally passed and implemented on February 3, 1999. That July, the GIO processed the first batch of applications for satellite broadcasting business operation. A total of 107 applications were approved.
As of July 2005 (six years later), 61 Taiwanese companies and 19 foreign businesses had received GIO approval to provide satellite programming on 98 and 45 channels, respectively. This means that a total of 143 channels had been available via cable television systems or direct satellite reception. In addition, five local and three foreign enterprises received permission to provide direct satellite broadcasting services.
The following is stipulated in Article 6 of the Satellite Broadcasting Act:
To operate a satellite broadcasting business, an applicant shall complete and submit an application form, along with an operations plan, to the regulatory agency. Satellite broadcasting operation shall begin after the regulatory agency approves the application and issues a satellite broadcasting business license.
The license mentioned in the preceding Paragraph is valid for six years. A satellite broadcasting business shall file an application with the regulatory agency for license renewal at least six months prior to the date of expiration of the license.
Also, Article 2 of the Enforcement Rules for the Satellite Broadcasting Act states,
The format of the application form and operations plan submitted¡K for a license renewal, as stipulated in Paragraph 2 of Article 6 of the Law, shall be formulated by the regulatory agency.
The review criteria for satellite broadcasting businesses are specified in Article 4 of the Enforcement Rules:
In accordance with Paragraph 2 of Article 6 of the Act, in addition to examining the application form and operations plan, the regulatory agency shall evaluate the following circumstances, when reviewing the application for license renewal:
- Evaluation of the execution of the operations plan and any improvements;
- Record of violations of the Act;
- Record of infringing others¡¦ rights by broadcasting certain programs and commercials; and
- Handling of disputes with subscribers.
Other factors taken into consideration during the review are the shareholding structure, organization, and financial conditions of the applicants.
On this legal basis, therefore, the GIO announced on January 5, 2005, the Instructions for Applications to Renew Licenses of Satellite Broadcasting Businesses (including Foreign Satellite Businesses). The guidelines specified the items to be heeded and important prerequisites for application. Explanatory sessions were also held to strengthen communication with these businesses.
III. Media Characteristics
Television media are ubiquitous in Taiwan and provide entertainment and information to people in their daily lives, invoking feelings of security and satisfaction in them. The soundness of Taiwan¡¦s television media, therefore, directly affects the quality of the people¡¦s lives.
After license renewal, Taiwan presently has 125 satellite television channels, including seven 24-hour news channels (excluding foreign ones). Competition among stations, which operate a total of 87 satellite newsgathering (SNG) vans, has been escalating. As commercial revenues are closely linked with and predominated by viewership ratings, news coverage tends to focus on such issues as ¡§betel-nut girls,¡¨ ¡§spice girls,¡¨ famous models, and TV and motion picture celebrities to cause a stir among the audience. To garner a higher viewership rating, reporting has become sensational and distorted by, for example, re-broadcasting Janet Jackson¡¦s breast exposure, inflating the ballot tally during the 2004 presidential election, dramatizing the tsunami in South Asia with false footage, exaggerating weather reports, and reporting on an unsubstantiated food sanitation violation incident. In addition, the news media have engaged in gossip-mongering and resorted to covering extraordinary feats of psychic powers, the occult, sex, and violence. Operators have eroded the public¡¦s trust in television stations and led society to seek shortsighted interests and vulgar tastes, thereby undermining social mores.
Over the past six years, therefore, industry violations firmly handled by the GIO mainly involved relevant regulations of the Children and Youth Welfare Act, Sexual Assault Crime Prevention Act, Food Sanitation and Management Act, and Satellite Broadcasting Act. The GIO also brought up monitored and reportedly inappropriate programming at the Radio and Television Programs and Commercials Consultative Conference for discussion. Penalties were meted out in accordance with the law, as per the Conference¡¦s resolutions.
According to survey findings released by the Broadcasting Development Fund, a nongovernmental organization, on July 7, 2005, some 31 percent of interviewees refused to watch news channels, while 73 percent believed that news content affects social mores. After the license renewal review, a public opinion poll conducted by the electronic version of the
China Times, a leading newspaper in Taiwan, on August 5 showed that 44 percent of the public agreed, and only 25 percent disagreed with the GIO¡¦s establishment of a market withdrawal mechanism for television stations through the license and permit renewal review.
IV. License Renewal Process
On January 5, 2005, the GIO promulgated the Instructions for Applications to Renew Licenses of Satellite Broadcasting Businesses (including Foreign Satellite Businesses), and subsequently organized relevant public hearings. The license renewal operations were thus carried out as scheduled in 2005, with the major tasks being listed in chronological order as follows:
March 4
Satellite television businesses are to submit license renewal applications by this day.
May 20
Businesses renewing their licenses are notified in writing to submit their 2004 financial statements to the GIO by June 15.
May 27
The 68th Satellite Broadcasting Business Review Committee meeting is convened. A total of 21 channels covering sports, religion, and children programs are discussed.
June 7
Certain operators undergoing the first phase of the review (21 channels) are notified in writing to provide explanation regarding the opinions brought out by the review committee.
June 23
The 69th Satellite Broadcasting Business Review Committee meeting is convened to discuss a total of 49 variety, news, and other channels.
July 24
The Review Committee requests 18 channels to receive interviews.
July 31
The 70th Satellite Broadcasting Business Review Committee meeting is convened to vote through secret ballot, during which seven channels are denied license renewal.
August 2
Channel operators are notified in writing of the review results.
The review procedures call for the Satellite Broadcasting Business Review Committee to review and grade each application during the preliminary review. The 23 satellite broadcasting businesses that failed to receive 70 points had to be reexamined or be interviewed. After the committee made its final resolutions, the GIO officially announced the review results and issued licenses and permits, as appropriate. During the entire process, the GIO fully respected the committee¡¦s decisions and handled related matters in accordance with the law.
The Satellite Broadcasting Business Review Committee convenes upon the GIO¡¦s request to handle business license renewal applications submitted by program providers and service operators in the satellite broadcasting industry. These committees have consisted of 11 to 15 members. As of today, the committee has reviewed 261 applications, among which 206 have been approved, and 55 either withdrawn by the applicants or rejected by the committee. The current sixth committee consists of 12 members, who are professors or experts and come from diverse backgrounds, including finance, law, communications, and technology. Their tenure runs from April 16, 2005, and to April 15, 2006. The committee members are as follows:
| Name
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Position and Affiliation
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| Lee Chung-hsi
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Assistant Professor, Graduate School of Financial and Economic Law, National Dong Hwa University
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| Lee Hahn-ming
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Professor, Department of Computer Science and Information Engineering, National Taiwan University of Science and Technology
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| Tseng Kuo-feng
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Assistant Professor, Department of Radio and Television, National Chengchi University |
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Kuang Chung-hsiang
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Assistant Professor, Department of Radio, Television and Film, Shih Hsin University |
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Liu Jing-yi
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Associate Professor, Institute of National Development, National Taiwan University |
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Arthur Shay
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Managing Partner, Shay & Partners (legal services provider) |
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Lo Shih-hong
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Associate Professor, Department of Communication and Graduate Institute of Telecommunications, National Chung Cheng University |
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Lu Shih-hsiang
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Adjunct Professor, Graduate Institute of Journalism, National Taiwan University |
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Chen Cing-kun
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Accountant |
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Wu Jia-huei
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Deputy Director-General, Directorate General of Telecommunications, Ministry of Transportation and Communications |
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Liu Ching-fang
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Director-General, Department of Supervision and Coordination, Consumer Protection Commission, Executive Yuan |
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Tseng Yi-hung
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Deputy Director, Department of Broadcasting Affairs, Government Information Office |
Of the 70 license renewal applications filed for review, 46 were approved, while 23 (about 30 percent of the total; the remaining one is discussed below) failed to receive a passing score of 70 and had to be reexamined. The committee interviewed 18 of the businesses and asked them to submit concrete proposals for improvement, while the remaining five were merely asked to submit supplemental documents. The committee conducted the entire review process and procedures fairly and objectively. The GIO had no preconceived position on the matter and fully respected the committee¡¦s conclusions.
V. Review Results
The sixth Satellite Broadcasting Business Review Committee completed its review of the 70 applications, approving 62 and rejecting seven of them. The one application submitted late (i.e., less than six months prior to the license¡¦s expiration) will be handled separately. Therefore, the licenses of 21 satellite broadcasting businesses, including the 13 that did not apply for license renewal, will become invalid upon their expiration.
The committee also attached the following conditions to license renewal applications:
A. Channel operators who gained license renewal approval through reexamination are to revise their operations plans at the earliest possible date as per the follow requirements:
- Inclusion into operations plans of concrete measures that, during the interview process, general channel operators committed themselves to adopting. (News channel operators are required to establish a self-disciplinary organization, a disciplinary pact, and plans for human resources development no later than September 2, 2005.)
- Establishment by news channel operators of a transparent system to facilitate participation of and monitoring by the public (setting up an independent ombudsmanship and broadcasting a related fixed-schedule program for one hour each week during prime time).
B. The review committee demanded that the GIO enforce Article 37 of the Satellite Broadcasting Act and prescribe standards for suspending and terminating broadcasting stations.
During this first-ever review of license renewal applications for satellite broadcasting businesses, seven applications were rejected: Eastern Broadcasting Company¡¦s ETTVS, Longshong movie channel, Wall Street financial channel, Penglaisianshan, Open Entertainment Television, Rainbow Channel, and CASA. The GIO issued administrative disciplinary letters on August 2, stating the reasons behind the committee¡¦s conclusions. The reasons for denying operation license renewals of the 7 channels are as follows:
- Eastern Broadcasting Company¡¦s ETTVS: First, its operation plan explicitly states that the channel is exclusively a news channel, offering in-depth news information services. However, it was found that as much as 26.1 percent of its programs were non-news programs, and that most of its news reports were obtained from the other news channel of Eastern Broadcasting Company. This is inconsistent with its original operations plan. Second, ETTVS has failed to make concrete endeavors to avert its rule-breaking behavior in accordance with the two recent evaluation reports on the execution of its operations plan. On the contrary, it continues to violate pertinent regulations mostly by breaking the Regulations for the Classification of Television Programs and ¡§compulsory or prohibitive regulations under the law.¡¨
- Longshong movie channel: First, this channel operator¡¦s annual liability ratio has exceeded 66.45 percent and once even 90 percent, revealing that its financial structure and cash flow are problematic. Second, the company¡¦s total assets fell from NT$600 million in 2001 to NT$200 million in 2003. Since 2002, the operator¡¦s revenues have been declining, and it clearly lacks management capabilities.
- Penglaisianshan channel: First, according to its operations plan, the channel was designed to air various types of programs ranging from ¡§historical story-telling,¡¨ glove puppet shows, folk healing remedies and herbs, religion, and fortune-telling. Its operations objective was to promote local culture and local spirit. However, as the channel frequently broadcast programs inconsistent with its objective, such as shows featuring scantily clad girls, it was deemed incapable of executing its operations plan. Second, its advertisement-oriented programming has seriously violated ¡§compulsory or prohibitive regulations under the law,¡¨ disrupted public order, and adversely affected social mores. It was, therefore, deemed incapable of implementing the editing and reviewing mechanisms stated in its operations plan.
- Wall Street financial channel: First, this channel has shared news programs with Eastern Broadcasting Company¡¦s news channel. This is inconsistent with its operations plan, which claimed that it would offer ¡§domestic and international financial news translated and edited by its staff by means of single-anchor reporting,¡¨ as well as ¡§full coverage of financial and banking news to satisfy audiences¡¦ need for knowledge.¡¨ The channel was, therefore, deemed incapable of executing its operations plan. Second, more than 50 percent of the channel¡¦s programs were operated by investment consulting companies, with programming content no different than commercials, which clearly violated ¡§compulsory or prohibitive regulations under the law¡¨ and was inconsistent with the principles stated in its operations plan, which indicated that, ¡§in order to maintain the overall quality of this channel and its programs, TV hosts and guests will definitely not run the show by making speculative recommendations¡K ¡¨ It was therefore deemed incapable of executing its operations plan.
- Open Entertainment Television: First, in its 1999 operations plan, Open Entertainment Television stated that it was a variety show television station and clearly promised that the content of its programming would include Taiwan¡¦s local conditions and customs, pluralistic life and cultures, recreation, and entertainment. The GIO found that the station¡¦s recently broadcast programs such as ¡§World-search Magazine¡¨ and ¡§Wild Wind Recurrence¡¨ drew no distinction between programming and advertisement, wherein products claiming to have healing effects had been broadcast. Second, such programs violating regulations accounted for more than 6.25 percent of the station¡¦s programs broadcast every week. Furthermore, vulgar late-night programs such as ¡§Republic of Pretty Girls,¡¨ ¡§Spice Girl Mobilization,¡¨ and ¡§The Pink Unit,¡¨ as well as advertisements for sexual-content paid-telephone services, accounted for 23 percent of its weekly program schedules. It was evident that program production did not conform to and programs were not executed in accordance with the station¡¦s operations plan.
- Rainbow channel: First, financial statements submitted for review did not bear the proof of an accountant¡¦s signature as requested by the review committee. Moreover, on two occasions the channel was requested to submit financial statements, but they varied greatly. Second, this channel did not made improvements in line with the last two assessment results of execution of the channel¡¦s operations plan. Shortcomings included a lack of full-time editors, editing system, and self-regulation, and insufficient on-the-job training for program editors.
- CASA: First, CASA¡¦s program uptake rates by other channels dropped year after year. In 2003, these were down to 29 percent; in 2004, as low as 15 percent. This demonstrated CASA¡¦s weak operational capability. Second, more than 50 percent of CASA¡¦s programs were operated by investment consulting companies. This made it impossible to execute the operations plan¡¦s stated aim of ¡§¡K striving together to help Taiwan¡¦s economy take root¡¨ and did not tally with the operations plan¡¦s claim that the ¡§channel is a professional industrial and economic channel.¡¨
It can be seen, therefore, that reasons for rejecting license renewal applications include a failure to live up to an operations plan, a record of disciplinary measures for regulation violations, a failure to tally programming content with that listed in the application, poor financial condition, and a failure to make improvements following unsatisfactory assessment of execution of operations plan. These are all standard items of review. The review process also included a preliminary review, re-examination and interview, and, after the committee completed the license renewal review, announcement of the result by the GIO.
Through this year¡¦s license renewal process, the GIO believes that it has been able to update its information regarding satellite broadcasting businesses¡¦ operations and thereby gain a better understanding of the operations and development of the media industry. Moreover, it should also have positive effects on the protection of consumers¡¦ viewing rights, promotion of self-regulation by the media, and establishment of a pluralistic and open industry.
VI. Future Prospects
With regard to maintaining order within the broadcast media, the GIO¡¦s policy goals aim to create an environment of fair competition and promote self-regulation by the media. In social terms, they are directed to protect pluralistic culture and safeguard consumers¡¦ rights. The GIO also hopes to see the local broadcast industry, whether radio, terrestrial TV, cable TV, satellite TV, or Internet, participating in global competition and undergoing further growth.
Satellite broadcasting is a special-authorization industry, however, and so is different from ordinary businesses. Since broadcasting information to the general public gives these operators a certain influence on society¡¦s ideas, culture, and morality, broadcast media have a social responsibility to accord with the nature of authorized businesses, and so the market cannot be allowed to develop with complete freedom. The government must prevent small cliques or individuals from monopolizing the market through illegal media operations, and adopt effective management to forcibly regulate the industry. The GIO¡¦s record of disciplinary measures over the 12 months from July 2004 to July 2005 shows 569 violations by satellite broadcasting businesses totaling more than NT$120 million in fines, with the most common violation being the broadcasting of advertising-oriented programs (238 cases) followed by those with excessive advertisement time (139 cases).
Television channels in their current state have provoked much criticism from the general public and social organizations. The Satellite Broadcasting Business Review Committee has suggested that the GIO enforce Article 37 of the Satellite Broadcasting Act and prescribe standards of disciplinary action for the suspension or termination of broadcasting licenses. This article specifies that domestic or foreign satellite broadcasting businesses may be penalized with suspension of transmission for a period of between three days and three months. These laws empower the GIO to enforce punishment by suspension of transmission or revocation of permit, and do not limit it to using this power only during the license renewal period every six years.
In the future, the GIO will formulate enforcement regulations in accordance with the law for the suspension or termination of satellite broadcasting licenses. In the case of serious violations where satellite broadcasting businesses fail to make corrections following repeated disciplinary actions, not only will heavy fines be imposed but professional inspections will also be conducted by the Satellite Broadcasting Business Review Committee to establish an open, fair, rational and transparent market withdrawal mechanism.
In addition, the GIO will encourage media-related social organizations to assist in holding public forums on media reform. These efforts are aimed at forging a social consensus, establishing a platform for participation by the general public in the media, and reducing public criticism of television programming, as well as meeting the public¡¦s high expectations of enhancing media quality.
VII. Conclusion
Creation of a prosperous, diversified, and fully competitive market environment for the operation of the broadcasting industry has long been a major policy of the GIO. In view of the increasingly competitive environment of the satellite broadcasting industry, the GIO has consistently adhered to the goal of regulating the industry and providing it with guidance, so as to assist in the healthy development of the satellite broadcasting industry, strengthen self-regulatory mechanisms and capabilities, and improve the quality and diversity of TV programs.
Press freedom should be commensurate with demands for journalistic professionalism. Press freedom is pursued by all as being of the highest value but it should not be escalated without limit nor be allowed to override the public interest. If press freedom were to exist only in formality but without the rule of law, journalistic ethics, or social responsibility, it would be incapable of promoting a positive and healthy development of the media. The Review Committee examined many negative media developments and made resolutions with conditions to encourage the media to undertake accurate reporting and be responsible to the public.
A National Communications Commission (NCC) will be established in the future, but public-interest responsibility will remain, and there will be no major changes in the requirements for establishing new satellite broadcasting channels or for renewing licenses. Prior to establishment of the NCC, the GIO will not neglect its due responsibilities to enforce laws and protect viewers¡¦ rights and interests.
As the future communication environment will change with the convergence of high technologies following the maturity of digital technological development, there will be a pressing need for integration of the broadcasting, communications, and information industries. The three laws currently governing the broadcasting industry will soon be unable to cater for the needs of this ¡§mega-sized media tide.¡¨ In light of this, the GIO¡¦s Department of Broadcasting Affairs has been actively working on revising these three broadcasting laws, seeking to rid the broadcast media of influence from political parties, the government, and the military, promoting digitalization of terrestrial broadcasting and cable televisions, expanding the terrestrial public television service group, grading Internet websites, and planning a self-regulatory system for Internet businesses. All these are intended to correct the distorted structures of the past and to recreate rational order in the broadcasting industry.
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