Accommodating Convergence Accommodating Convergence

in the Digital Agein the Digital Age

Accommodating Convergence Accommodating Convergence

in the Digital Agein the Digital Age

Address by

Prof. Yu-Li Liu

Department of Radio and TV

National Chengchi University

2008.3.29

Outline

National Communications Commission (NCC) National Communications Commission (NCC)

New Converged Communications ServicesNew Converged Communications Services

(DAB, DTV, Mobile TV, IPTV, WBA)(DAB, DTV, Mobile TV, IPTV, WBA)

Converged Legislative LawsConverged Legislative Laws

ConclusionConclusion

3National Communications Commission

Before the NCC was established

Government Government Information Office: Information Office: contentcontent

Directorate General of Directorate General of Telecommunications Telecommunications (DGT) of Ministry of T(DGT) of Ministry of Transportation and Coransportation and Communication (MOTC):mmunication (MOTC): technical perspective technical perspective (frequency, standard)(frequency, standard)

4National Communications Commission

The Reasons for establishing a Converged Regulator--NCC

Coping withCoping with Convergence Convergence Conflict Role of the Government Information Office Conflict Role of the Government Information Office

(spokesman of the Executive Yuan)(spokesman of the Executive Yuan) Abide by multilateral agreements of the WTOAbide by multilateral agreements of the WTO Integrate government organizations to eliminate Integrate government organizations to eliminate

unnecessary administrative costs and to promote national unnecessary administrative costs and to promote national competitiveness.competitiveness.

Keeping Consistency in the same agencyKeeping Consistency in the same agency.. The media and academics have expressed concerns for The media and academics have expressed concerns for

more than one decade.more than one decade.

5National Communications Commission

The NCC Organization Act was passed (October 25, 2005)

Debates, negotiations and conflictsDebates, negotiations and conflicts President promulgated on November 9, 2005President promulgated on November 9, 2005

6National Communications Commission

Selection Process

Review Panel (11 members nominated by political Review Panel (11 members nominated by political parties, based on their proportion of seats in the parties, based on their proportion of seats in the Legislative Yuan.Legislative Yuan.

KMT: 4 KMT: 4 PFP: 2 PFP: 2 DPP: 4DPP: 4 TSU: 1TSU: 1First round (public hearing, First round (public hearing, Dec.9-11)Dec.9-11): 8: 8+5=13 (5 out of +5=13 (5 out of

18 were out)18 were out)

One qualified candidate resigned after being

selected by the Review Panel.

7National Communications Commission

8National Communications Commission

9National Communications Commission

The Legislative Yuan confirmed The Legislative Yuan confirmed the nominees on January 12, the nominees on January 12, 2006.2006.

The Legislative Speaker signed The Legislative Speaker signed and sent the confirmation to the and sent the confirmation to the Executive Yuan on January 16.Executive Yuan on January 16.

Premier Hsieh did not want to Premier Hsieh did not want to appoint the nine commissioners appoint the nine commissioners before he stepped down on before he stepped down on January 23. He asked the Grand January 23. He asked the Grand Justices of the Judicial Yuan to Justices of the Judicial Yuan to interpret the NCC Organization interpret the NCC Organization Act to see whether it is Act to see whether it is unconstitutional.unconstitutional.

Premier Su appointed and Premier Su appointed and declared the Commissioners.declared the Commissioners.

10National Communications Commission

Liu Kung-Chung, Lin Tung-Tai, Hsieh Chin-Nan, Liu Tsung-Te, Liu Yu-Li, Su Yeong-Chin, Wu Chung-Chi, Shih Shih-Hao, Li Tsu-Yuan

On February 22 2006, the National Communications Commission On February 22 2006, the National Communications Commission (NCC) became operational. (NCC) became operational.

On March 1, 2006, the Chairman and Two Vice-Chairs were installed.On March 1, 2006, the Chairman and Two Vice-Chairs were installed.

Birth of NCC

11National Communications Commission

Birth of NCC

From the day of the NCC's establishment, laws and From the day of the NCC's establishment, laws and regulations dealing with communications and the powers regulations dealing with communications and the powers originally under the Ministry of Transportation and originally under the Ministry of Transportation and Communications(MOTC), the Government Information Communications(MOTC), the Government Information Office(GIO) and the Directorate General of Office(GIO) and the Directorate General of Telecommunications(DGT), MOTC were all transferred to Telecommunications(DGT), MOTC were all transferred to the NCC.the NCC.

NCC was established as a merger of the DGT and the NCC was established as a merger of the DGT and the Department of BroadcastingDepartment of Broadcasting Affairs of GIOAffairs of GIO

12National Communications Commission

Judicial Yuan Interpretations No.613 (1) rendered on July 21, 2006 rendered on July 21, 2006 Article 4-II of the NCC Organization Act deprives the Executive Article 4-II of the NCC Organization Act deprives the Executive

Yuan of substantially all of its power to decide on personnel Yuan of substantially all of its power to decide on personnel affairs, violating the principles of politics of accountability and affairs, violating the principles of politics of accountability and separation of powers. separation of powers.

Legislative Yuan transgresses the Executive Yuan’s power to Legislative Yuan transgresses the Executive Yuan’s power to decide on personnel affairs.decide on personnel affairs.

the foregoing provisions shall become void after December 31, the foregoing provisions shall become void after December 31, 2008. 2008.

the Act has to be revised by that timethe Act has to be revised by that time

New Converged Communication Services

1. DAB (Digital Audio Broadcasting)

＊＊ TThe bandwidth for he bandwidth for audioaudio broadcasting shall not be broadcasting shall not be less than less than halfhalf of the bandwidth it possesses of the bandwidth it possesses

＊＊ DAB operators providing a telecommunication servDAB operators providing a telecommunication service shall fall under the relevant regulations in the Tice shall fall under the relevant regulations in the Telecommunications Act and shall acquire elecommunications Act and shall acquire telecomtelecommunication licensesmunication licenses

＊＊ Until the Radio & Television Act has been amended,Until the Radio & Television Act has been amended, DAB providers are prohibited from providing DAB providers are prohibited from providing videovideo service.service.

DAB broadcasters (3+3)DAB broadcasters (3+3)

Nationwide: 3Nationwide: 3

Regional: 3Regional: 3

2. Digital TV

The goal : build a complete digitized media environment and advanced media industry

Estimated to achieve the goal of a complete digitizeddigitized TV environment by 2010 or earlier

2. Digital TV

1st SFN plans1st SFN plans Permit current Terrestrial TV operators to operate a DTV

service NCC permitted TTV,CTV,CTS,FTV and PTV to

operate a DTV service in September 2007 Each of the TV station provides 3 SDTV

channels (6 MHz each).Until the Radio & Television Act has been

amended, DTV providers are prohibited from providing a Data service (MHP)

2. Digital TV

2nd SFN plans (Digital Terrestrial TV)

Licensing approach: Beauty contest + auction

**The Ministry of Transportation and Communications (MOTC) has different proposal.

3. Mobile TV-- Handheld Television

The Goals :The Goals : Create a converged environment with multimedia Create a converged environment with multimedia

standards for receiving terminal equipmentstandards for receiving terminal equipment Provide more choiceProvide more choice of diversified content and interactive of diversified content and interactive

servicesservices Promote the development of new broadcast technology Promote the development of new broadcast technology Accelerate the development of domestic interactive Accelerate the development of domestic interactive

services, the wireless industry and mobile phone related services, the wireless industry and mobile phone related industriesindustries

Expand the scope of the digital video marketExpand the scope of the digital video market

Spectrum Arrangements for Trial Project The test-trial frequencies are located on :

Ch35 (freq.596-602 MHz) Ch36 (freq.602-608 MHz) Ch53 (freq.704-710 MHz)

There are two regions for this project covering the western half of Taiwan: Northern region (from Keelung to Miaoli ) Southern region (from Taichung to Pingdong)

The technology-neutral principle is adopted for the project. Only two standards, DVB-H and MediaFLO, are adopted by proje

ct teams at this time.

The Members of The Trial Project Teams (1/2)

The 5 teams are composed of Local telecommunications operators (including Type

1 and Type 2 telecommunications businesses)Broadcasting operators (including cable

broadcasters, satellite broadcasters and terrestrial broadcasters)

Equipment providers Value-added service providersContent providers

which are capable of completing this project.

4. IPTV

Managed IPTV subscribers (HH)Managed IPTV subscribers (HH) CHT’s MOD 333,340CHT’s MOD 333,340

(June, 2007) Chung-Hwa Wideband Best Network 450 Seednet 3,000 (March, 2007)

Vee TV

Internet TV Webs-Tv inc. 850,000 ERA Digital Media Co., Ltd 135,000

(March, 2007)

The Dilemma of CHT’s IPTV Service (1)

In December 2003, the Legislative Yuan passed a resIn December 2003, the Legislative Yuan passed a resolution to ask the government and all the political parolution to ask the government and all the political parties to withdraw their shares from the electronic medities to withdraw their shares from the electronic media and the cable TV companies by December 2005.a and the cable TV companies by December 2005.

Since 35% of CHT’s shares are still owned by the govSince 35% of CHT’s shares are still owned by the gov

ernment, CHT faces a dilemma: it either has to withdrernment, CHT faces a dilemma: it either has to withdraw its government share by December 2005 or receivaw its government share by December 2005 or receive penalties whether in the form of fines or the revocate penalties whether in the form of fines or the revocation of its license from the regulator. ion of its license from the regulator.

The Dilemma of CHT’s IPTV Service (2)

MOD only occupies a small part of CHT’s business. MOD only occupies a small part of CHT’s business. Even though CHT wants to withdraw its government Even though CHT wants to withdraw its government shares, it will not divest of all the government shares. shares, it will not divest of all the government shares.

It is also under the supervision of the Legislative YuaIt is also under the supervision of the Legislative Yuan, which will ensure that CHT does not sell its shares n, which will ensure that CHT does not sell its shares at a cheaper price to some specific financial groups.at a cheaper price to some specific financial groups.

What Actions Did NCC Take?

regulatory parity vs. encourage new serviceregulatory parity vs. encourage new service Revise the law—cannot waitRevise the law—cannot wait

NCC’s resolution :NCC’s resolution :MOD service be exempt from being regulated b

y the Cable Radio and Television Act and Article 1 of NCC Organization Act, provided that Chunghwa Telecom open up the MOD platform

NCC’s Initial Decision

1. 1. It has to avoid the characteristics of cable TV It has to avoid the characteristics of cable TV such as the closed system from the headend to such as the closed system from the headend to the consumers.the consumers. 2. The open platform measures2. The open platform measures (1) Allow all interested channels, VOD and (1) Allow all interested channels, VOD and application service providers to use CHT’s MOD application service providers to use CHT’s MOD platform.platform. (2) Let the customers of other ISPs be connected (2) Let the customers of other ISPs be connected with CHT’s MOD platform. with CHT’s MOD platform. (3) Allow other aggregators to use CHT’s MOD (3) Allow other aggregators to use CHT’s MOD platform.platform. (4) Let the customers of other fixed networks be (4) Let the customers of other fixed networks be connected with CHT’s MOD platform.connected with CHT’s MOD platform.

NCC’s Initial Decision

3. CHT has to change its business models. It 3. CHT has to change its business models. It cannot originate channels or manage channelcannot originate channels or manage channels directly or indirectly. s directly or indirectly.

4. CHT has to correct its business models an4. CHT has to correct its business models and open up its MOD platform within a certain pd open up its MOD platform within a certain period of time. eriod of time.

Cross-Industry Ownership

In May, 2007, the Commission amended “ the Administrative rules for Fixed communication business.”

It included the models of multimedia content transmission platform and opened the door to cable TV operators to operate local network business in their original operating area.

It is to exclude cross-industry operating barriers, activate market competition and increase consumers’ choice.

Telco-Cable TV Cross Ownership

TelcoTelco TV service (IPTV) TV service (IPTV) CHT’s MODCHT’s MOD SeedNet’s serviceSeedNet’s service

Cable TVCable TVTelcoTelco SHYH-SHIN CATV GROUP CSHYH-SHIN CATV GROUP C

O.LTD. (Chia-Yi City and CouO.LTD. (Chia-Yi City and County)nty)

VASTAR CABLE TV SYSTEM VASTAR CABLE TV SYSTEM CO.LTD. (Taichung County)CO.LTD. (Taichung County)

6 Other cable system operat6 Other cable system operators applied for 8 local fixed nors applied for 8 local fixed network licensesetwork licenses

5. Wireless Broadband Access (WBA) Major goal:

Promoting the development of wireless businesses Licensing approach: hybrid of beauty contest & auction Licensing principles :

Lower market entrance barrierMore operators (allow mergers later)Fair competition with the existing telecom operatorsShorter terms (6 years)Technology neutral

Two-phase License Issuance

Phase One Phase One Around July of 2007 Regional licenses will be valid for a period of six years Can be renewed only once Regional licenses may be merged and converted to a nationwide lic

ense.

Phase Two Phase Two After June 2009 At least one nationwide license License(s) will be valid for a period of ten years

5. WBA License Owners

Northern: percentage rate bidNorthern: percentage rate bid

First International Telecom Corp. 12.89%First International Telecom Corp. 12.89%

Global On Corp. 6.19%Global On Corp. 6.19%

VMAX Telecom Co., Ltd. 5.2%VMAX Telecom Co., Ltd. 5.2%

Southern:Southern:

Far Eastone Telecom Co., 4.18%Far Eastone Telecom Co., 4.18%

TATUNG InfoComm Co., Ltd. 7.25%TATUNG InfoComm Co., Ltd. 7.25%

Vastar Cable TV System 8.69%Vastar Cable TV System 8.69%

Converged Legislative Laws

• provides NCC’s responsibilities & relevant operating rules

Telecommunications ActRadio & TV Broadcasting Act

Cable Radio and TV ActSatellite Radio and TV Act

• defines the principles for the responsibilities between NCC and the Executive Branch• sets common regulatory principles for communications services

Fundamental Communications

Act 2004.1

NCC Organization Act2005.11

• provide regulations for communication & broadcasting businesses

Legal Framework

Converged Legislative Laws (2)

Draft and amend laws and regulations - 3 stages for Convergence

1. Abolish or amend unnecessary regulatory legislation

2. Respond to urgent industry needs, complete revision of laws on a small scale

3. Respond to the needs of digital convergence, create the “4-in-1” Converged Telecommunications & Media Law.

Introduction of 3-layer Regulation Framework

Content & application Layer

Content & application Layer

3-layer Framework

The Horizontal-regulation FrameworkThe Horizontal-regulation Framework

• 3-layer : offers consistent regulatory criterion for operators running same business, encourages flexible and creative business models; from vertical regulation to horizontal regulation

Service/ platform Layer

infrastructure/Network Layer

Regulatory Principles for Communication Administrative Bill

Toward the direction of medium to high degree of convergenceToward the direction of medium to high degree of convergence Adopting 3-layer horizontal regulatory structure and regulating Adopting 3-layer horizontal regulatory structure and regulating

accordingly based on their different featuresaccordingly based on their different features Adopt a single legislation approach (4-in-1)Adopt a single legislation approach (4-in-1) Separate network and service regulation Separate network and service regulation Handle broadcasting services separately if necessaryHandle broadcasting services separately if necessary Ensure minimum government intervention and respecting Ensure minimum government intervention and respecting

market mechanismsmarket mechanisms Fulfill media self-regulation and civil society regulationFulfill media self-regulation and civil society regulation Seek seamless migrationSeek seamless migration

Conclusion

Coordination among relevant government agencies NCC: provide a fair and competitive environment for the

telecom and broadcasting industries

Ministry of Transportation and Communications (MOTC)&

Government Information Office (GIO): provide guidance &

incentives for the development of the communication

sector

Ministry of Interior: subsidize the digital set-top-boxes for

the low income households.

Ministry of Economic Affairs: promote the development

of digital content and M-Taiwan plan.

38National Communications Commission

How to cope with the convergence trend?Students’ Perspective

Understand both telecommunications and Understand both telecommunications and broadcasting sectors.broadcasting sectors.

Understand convergenceUnderstand convergence

legal, social, economic perspectivelegal, social, economic perspective