Broadcasting bill finally passed, 30 tril. won impact seen

The new broadcasting bill, dragged around by the National Assembly for more than 5 years because of partisan bickering, finally passed the Assembly's committee on culture and tourism on November 30. Opposition party members boycotted the meeting.


The bill could become law in early December if passed by the legislature's general session.


Dubbed the "Integrated Broadcasting Act," the draft measure has sparked heated debate, much of it centered on the political issue of appointing members of the proposed Broadcasting Commission. That body, designed to be independent of direct political influence, will have the final say in deciding broadcasting-related policies, licensing, administration and personnel matters, assuming many responsibilities currently held by the Ministry of Culture and Tourism.


The proposed law stipulates that the commission's nine members be appointed by the President, with one-third recommended by the Chief Executive himself, another third by the National Assembly speaker, and the rest by the Assembly's committee on culture and tourism. That approach is not satisfying to some in the opposition party who want a greater role.


The new law, touching on adjoining areas such as telecommunications, satellite broadcasting and many other media industries, as well as conventional network broadcasting, will have sweeping implications which would trivialize politicking among lawmakers. In terms of stakes for all those involved, it is as significant as the United States' Telecommunications Act which was passed in 1996.


By some estimates, the new Korean law can help create a nearly 30 trillion won (approx. $25 billion) market within six years. In addition, it will give life to the satellite broadcasting industry which has long awaited the day of approval, unable to tap revenues estimated at 7 billion won a year while two broadcasting satellites have been idly orbiting.


What's so important?


Until recently, different media industries, network TVs, cable operators, satellite broadcasters, telcos and Internet companies, had been able to prosper on their own turf behind barriers created by natural incompatibility among diverse media. Government regulations prohibiting cross-ownership in multiple industries also played a part in maintaining those boundaries. Now, the so-called "digital convergence" is changing that.


Any information, be it text, pictures, video streams or voice, can now be turned into bits--electronic signals of ones and zeros--and sent through copper wires, coaxial cables or fiber-optic lines to reach final users. The convergence has rendered meaningless the rigid divisions between those handling information. It will surely lead to a wave of consolidation in the broadcasting and communications industry. Current regulations increasingly have become an impediment to further industry regroupings.


The planned overhaul in broadcasting laws reflects realization that the world has changed. The act contains, among other things, many provisions that lower or eliminate barriers to entry across business lines. It also streamlines a complex web of regulations exerted by different agencies.


Satellite broadcasters, such as Korea Telecom and Dacom, have been active in promoting their cause. Because there has been no legal ground for them to operate domestically to date, they had to idle their expensive equipment including the Mugunghwa I and II high-orbit satellites launched in 1995 and 1996, respectively. Now, Mugunghwa III has joined them in space, also awaiting a greenlight.


When those satellites come into commercial use, the number of immediately available TV channels for Korean viewers will increase to more than 100 from the current 50. Satellite broadcasting will generate demands for set-top boxes and other equipment amounting to more than 6 trillion won.


Expected to benefit most from the change are equipment suppliers, including those who make digital TVs. By 2005, when Korea's TV broadcasters must beam 100 percent digital signals, consumers will need compatible digital TV receivers with domestic demand exceeding 6 million units, an estimated 15 trillion won's worth.


In addition to a big bonanza for telecom operators and computer companies joining the boom, content providers--such as TV program production companies and news agencies--will also gain from a greatly expanded outlet for their products. Advertising agencies, agonizing with limited ad space in TV and print media, can be revitalized with much diversified venues.


Foreign suppliers of TV programming and broadcasting equipment can expect a piece of the action. One area that many anticipate will enjoy rapid growth is entertainment content, including movies, television shows and interactive games.