How Broadcasting Law Should Evolve in the Age of One-Person Media

The definition of a broadcast program is changing. In the past, it meant something provided unilaterally by a small number of broadcasters such as terrestrial networks or cable TV operators. But with the emergence of IPTV’s VOD (Video On Demand), broadcast programs have become something chosen by consumers.

In addition, thanks to YouTube channels where individuals upload and share their own videos, an era has opened in which anyone can produce broadcast programs and offer them to consumers.

Unfortunately, Korea’s institutions are falling behind in this changing media environment. They remain stuck in the old regulatory approach once used for terrestrial broadcasting and cable TV. The National Assembly is currently preparing to enact a full amendment to the Broadcasting Act (the Integrated Broadcasting Act), which would include OTT (Over The Top) services such as Netflix as broadcasters. Because Netflix has been classified as a value-added telecommunications service provider subject to the Telecommunications Business Act, it has thus far avoided broadcasting regulation. The goal now is to make it subject to licensing and various other regulations through the Integrated Broadcasting Act.

There is also discussion of strengthening ownership regulations on broadcasters. Under current law, each pay-TV operator—including IPTV, satellite broadcasting, and cable TV—is subject to an ownership restriction preventing it from exceeding one-third of market share. As if that were not enough, there is also a move to reintroduce the “aggregate regulation” that would count all affiliates together and bar them from exceeding one-third of the total broadcasting market. As a result, merger and acquisition attempts by broadcasters seeking to acquire cable TV operators have already been stalled.

Although the National Assembly is strengthening regulations, advances in technology are making broadcasting regulation increasingly unnecessary. Regulations on broadcasters are intended to secure the public interest, ensure diversity of opinion, and promote fair competition among broadcasters. To this end, broadcasters have long been subject to licensing and relicensing requirements as well as ownership regulations.

When the current regulations were first created, terrestrial broadcasting and pay TV had enormous influence over the public. Popular programs recorded ratings of over 60%, so there was real concern that broadcasters could dominate public opinion.

But recent viewing surveys show that people now spend far more time watching broadcast programs on YouTube via mobile devices than on TV. Even people in their 50s and 60s, for whom television is more familiar than smartphones, are increasingly getting their news through YouTube. In such a situation, no broadcaster can exploit a monopoly position to mistreat consumers or monopolize public opinion.

From the standpoint of broadcasters’ competitiveness as well, the National Assembly should ease regulations rather than strengthen them. In 2016, SK Broadband sought to acquire CJ HelloVision, but the Fair Trade Commission blocked the deal on the grounds of market dominance. While domestic firms were being held back by regulation, foreign companies such as Netflix and YouTube have steadily increased their share of the Korean market with competitive content.

In effect, ownership regulations on domestic broadcasters have blocked opportunities to improve efficiency through mergers and acquisitions and to stimulate investment. Although the Integrated Broadcasting Act would classify Netflix as a broadcaster, regulating foreign companies is practically impossible, so the problem of reverse discrimination against domestic firms would remain.

Technological progress has also created opportunities to expand individual freedom in the media sector. We have moved beyond an era in which a small number of players unilaterally supplied broadcast content to the masses, into one in which every viewer can also be a broadcaster—an era of greater diversity of opinion and greater freedom of expression. A six-year-old child or a grandmother in her 60s can offer unique content, gain huge popularity, and earn advertising revenue.

In this situation, stronger regulation of broadcasting could ultimately conflict with freedom of expression, a fundamental human right. In a changing media environment, what laws and institutions should prioritize is establishing clear standards to ensure that diverse broadcast programs do not infringe on individual freedom, human rights, or property rights.

Consumers simply want to watch the programs they want, whether on TV or on a smartphone, regardless of platform or means. Attempts to redraw the broadcasting market every time a new medium appears and to introduce new regulations in order to eliminate regulatory blind spots restrict consumer choice and hinder the development of the media market. The direction broadcasting law should take in the era of one-person media is to boldly deregulate so that diverse media platforms can compete freely for consumers’ time.

Eun-kyung Kwak, Head of the Corporate Culture Office, Center for Free Enterprise (CFE)

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Original title: 1인 미디어 시대에 방송법이 나아가야 할 길

Author: Eun-kyung Kwak

Date: 2019-02-14

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=25&idx=11432