1. 1 Overview of Taiwan ’ s Broadcasting Industry Government Information Office Republic of China (Taiwan) June 22, 2007

2. 2 Taiwan ’ s Television Industry Backgrounder Past practices Broadcast Media Reform Policy

3. 3 Taiwan ’ s Television Industry Backgrounder Business-oriented approach First commercial TV station established in 1962, funded jointly by Taiwan ’ s government and Japanese private enterprises. Public TV station — only terrestrial TV company established using government funds — not established until July 1, 1998. Five terrestrial TV companies, 66 cable TV system companies, and 166 satellite broadcasting businesses now compete in Taiwan.

4. 4 Past practices Government, political parties, and the Ministry of National Defense (MND) could invest in, operate, or supervise TV enterprises

5. 5 Past practices --Taiwan Television Enterprise, Ltd. (TTV) --Chinese Television System, Inc. (CTS) 47 percent of shares held by government-run banks GovernmentBanksTTV 71 percent of shares held jointly by the government and MND Government & The Military CTS

6. 6 Past practices Role of the Government Information Office (GIO) Headed by a minister, who is appointed by the premier. GIO minister also serves as Executive Yuan spokesperson. Supervision — oversee radio, TV, and advertisement content; issue and revoke broadcasting licenses Guidance — encourage the broadcast industry to improve program quality by providing funds and organizing contests

7. 7 Past practices Limited resources of the Public Television Service (PTS) Government funding for PTS amounts to just US$ 27 million, which is 90 percent of its total funding The NHK and BBC garner most of their revenue via subscription fees/TV license fees, while PBS in the US receives the majority of its funding through donations from PBS members or private enterprises. Only one analog channel offered Domestic broadcast only

8. 8 Broadcast Media Reform Policy To improve the quality and value of Taiwan ’ s TV industry, the government has proposed the following: Measures to eliminate the influence of government, political parties, and the MND in the operation of broadcast media enterprises More government funding for PTS

9. 9 Broadcast Media Reform Policy Measures to eliminate the influence of government, political parties, and the MND in the operation of broadcast media enterprise Revisions to the Radio and Television Act passed in 2003 National Communications Commission (NCC) established TTV shares owned by government-run banks to be sold by the end of 2007 PTS-the largest shareholder of Chinese Television System and operator of several TV channels

10. 10 Broadcast Media Reform Policy Revisions to the Radio and Television Act passed in 2003 Article 5 — The government and political parties, as well as foundations established with endowments provided by them, and those commissioned by them, may not directly or indirectly invest in privately operated radio/television businesses.

11. 11 Broadcast Media Reform Policy NCC established The NCC was established on February 22, 2006, replacing the GIO as the independent authority charged with regulating the telecommunications, information, and broadcasting sectors. NCC members are appointed by the Executive Yuan with the consent of the Legislative Yuan

12. 12 Duties of NCC Supervise enterprises in related sectors, issues operating licenses, and regulates the radio spectrum Settle major disputes concerning related enterprises Oversee, investigate, and act as arbiter on matters related to telecommunications and broadcasting operations Punish violators of related laws and regulations Handle other broadcasting-related matters

13. 13 Duties of GIO Upgrade Taiwan ’ s radio and TV industries; Expand the services provided by PTS Formulate and implement related policies Note: NCC has taken over responsibility for supervising/regulating broadcast industries from GIO. GIO now focuses on promoting and guiding these industries and expanding and improving PTS services.

14. 14 Cooperation between the GIO and NCC Formulating radio and TV policies Consulting and communicating with one another to ensure smooth development of relevant sectors

15. 15 Broadcast Media Reform Policy TTV shares owned by government-run banks (amounting to 47 percent of TTV ’ s total shares) to be sold by the end of 2007 25.77 percent already sold to a domestic enterprise The floor price, set by domestic financial specialists, was NT$ 13.5 (US$ 0.4)per share The winning bid was NT$ 24.1(US$0.72) per share

16. 16 22 percent distributed as follows: 2.16 percent to TTV employees at NT$ 10.8 (US$0.32)/share; 19.46 percent to members of the general public by lot at NT$ 12 (US$0.36)/share. By the end of May 2007, 420,000 people had applied to purchase shares, four percent of whom then had the opportunity to purchase shares

17. 17 Broadcast Media Reform Policy PTS-the largest shareholder of Chinese Television System and operator of several TV channels In April 2006, the government and the MND transferred all their shares of CTS to PTS, making the latter CTS ’ largest shareholder with 71 percent of shares. On January 1, 2007, PTS began to operate the formerly state-run channels Taiwan Indigenous TV, Hakka TV, and Taiwan Macroview TV. In 2007, PTS became a syndicate organization.

18. 18 Broadcast Media Reform Policy More government funding for PTS Annual government funding for PTS increased to US$ 42 million in 2007 to help the organization expand operations and improve service quality. Since 2003, the government has provided US$ 3 million annually to help PTS and commercial wireless TV companies replace analog transmitters with digital ones. Analog signals are scheduled to be switched off starting in 2010.

19. 19 In both 2006 and 2007, the government provided PTS with US$ 155 million to: Establish HDTV and DVB-H (Digital Video Broadcasting-Handheld) systems ahead of commercial TV enterprises Begin providing wireless HDTV and mobile video services in 2008

20. 20 Broadcast Media Reform Policy Expected results from increased funding for PTS The following are expected over the next few years PTS able to provide a greater variety of programs PTS able to provide channels geared toward certain minorities PTS able to provide lifelong learning programs on its digital channels

21. 21 PTS able to enhance operational efficiency of public broadcasting through syndicated operations PTS able to provide programs via telecommunications and mobile communications services Nationwide digital wireless transmission system in place so that analog signals can be switched off starting in 2010 Construction of an HDTV system facilitated

22. 22 Thank you