By Kim Tong-hyung
Staff Reporter
The Korean Communications Commission (KCC), the country's telecommunication and broadcasting regulator, will allow bigger companies to enter the television business, triggering fierce opposition from existing broadcasters who questioned the political motives behind the decision.
The Broadcasting Law had prohibited South Korean firms with more than 3 trillion won (about $3 billion) in assets from owning a television news channel over concerns of super-rich companies having too much influence in the shaping of public opinion.
However, after a KCC executive meeting Thursday, presided over by Chairman Choi See-joong, the cap was lifted to 10 trillion won.
Coming in to play are 34 companies, including Hyundai Department Store, Kolon, Hyosung, Tongyang and GM Daewoo, all ranging between 3 to 10 trillion won in assets.
It was a widely anticipated decision, as the KCC earlier this month had settled on the same 10 trillion was as the ceiling for operators of Internet protocol television (IPTV), a next-generation broadcasting service awaiting commercial launch in the fall, which allows subscribers interactive features such as video-on-demand and online shopping.
The KCC also eased the entry barrier for conglomerates for cable television operations. Currently, a cable television system operator is prevented from controlling more than 33 percent of total cable TV revenue and can't provide coverage wider than one-fifth of the 77 service areas nationwide.
However, under the new regulations, a cable television operator will be given larger freedom to expand, although it must not take more than one-third of total subscribers, and can only provide coverage in up to one-third of service areas.
This provides more merger and acquisition opportunities in the cable television industry and the emergence of a mega-sized channel challenging the influence of terrestrial broadcasters becomes a real possibility.
The existing terrestrial channels are understandably miffed from the changes. Since the Lee Myung-bak government hinted on pushing for the privatization of KBS and MBC, the television channels have been a leading voice in the anti-government campaign triggered by the controversial decision to resume U.S. beef imports.
``The Lee government is trying to get a conglomerate to jump into the television business to guard against current channels that has been opposing his political code,'' said Chae Soo-hyun, an official from the National Union of Media Workers.