The Impact of Internet Broadcasting on the Electronic Media Regulatory Regimes in Taiwan
Chung-Chuan YANG <firstname.lastname@example.org>
One of the most astonishing developments in the communications landscape today is the emergence of the Internet as a viable channel for delivering video and audio programming to its users. However, the capabilities of the Internet to carry live or asynchronous audio and video programming will have significant regulatory implications. This paper connects the debate over regulation of the Internet with its impact on existing broadcasting regulatory regimes in Taiwan. The purposes of this paper aim to examine the impacts of the Internet on existing licensing regime used to regulate broadcasting operators in Taiwan. It also investigates the current debates on the Internet domain name-registration proposal and what implications this may have on regulation of the Internet broadcasting. This paper will provide timely discussion on the intricate issue of Internet domain name and Internet broadcasting. It points to an important issue that many countries are likely to face in an increasingly converging media landscape.
One of the most astonishing developments in the communications landscape today is the emergence of the Internet as a viable channel for delivering video and audio programming to its users. Internet broadcasting will bring real-time radio and TV programming to ordinary desktop machines over ordinary phone lines. As technologies develop, Internet broadcasting is overcoming technical obstacles such as the narrow bandwidth of phone lines, the limits of compressing multimedia data, and the vagaries of Internet packet transmission. Furthermore, current innovations in computer software programming have allowed users to enjoy audio and video streaming through the wires in real time, instead of waiting to download 20-minutes-and-play-later clips (De Jesus, 1996).
The capabilities of the Internet to carry live and asynchronous audio and video programming will have significant regulatory and commercial implications. Take one thing for example. Radio on the Internet will overturn the 70-year face of the broadcasting industry. Instead of using an antenna, a transmitter, and an elusive government license, a user with RealAudio software, an Internet connection, and a computer can now broadcast to and receive audio programming from around the world, twenty-four hours a day (Weekly Mail & Guardian, 1995).
Similarly, video programming can be transmitted through the Internet. The Internet is now providing video clips of news, movies, and soap operas, etc., to its users. Although both sound and video qualities are not satisfactory at this moment, new technological advances such as Asynchronous Transfer Mode (ATM), fiber optic networks, cable modem, digital compression, and even future NII and GII will reduce the undesirable effects of current bandwidth constraints on the performance of the Internet broadcasting stations. As a result, the Internet is likely to gradually become a competitive channel to deliver video and audio programming.
Although the broadcasting over the Internet seems to be a dream too good to be true for commercial and public interest stakeholders, Internet broadcasting can have unanticipated effects on the communication and entertainment industries as well as the regulatory regime in Taiwan. This paper thus aims to investigate the impacts of Internet broadcasting on the current licensing scheme that is employed to regulate electronic media in Taiwan.
The aggressive promotion of the Internet and related applications (such as distance learning, cybershopping, and telemedicine, etc.) by the governments in the Asia-Pacific region has tremendously increased the Internet population in this area. In the Four Tiger countries where economic and technological developments have been booming in the past decades, Internet penetration is very high. Taiwan in particular has made remarkable progress in the use of the Internet. As of May 1997, the number of host computers in Taiwan has grown to 63,586 compared with 24,520 in August 1994 (See Table 1).
Table 1: Host Growth in Taiwan
The number of Internet users has also grown rapidly; as of February 1997, it had reached 710,000, compared to 365,000 in February 1996 (See Figure 1).
Figure 1: Internet Users in Taiwan (in thousands)
World Wide Web (WWW) sites have also increased rapidly. As of February 1996, there were only 333 Web sites in Taiwan; however as of April 1997, the number had reached about 1900. The increase of commercial Web sites is especially worth mentioning here. As of April 1997, the number of commercial Web sites had reached 1468, an astounding growth from 780 in just one year (See Figure 2).
Figure 2: World Wide Web Sites in Taiwan
The introduction of the Internet into the broadcasting market means more channels are now available for contents providers to deliver their programming to the targeted audience. Broadcasting via the Internet is also called "cybercasting," "desktop broadcasting," "Webcasting," "cyber tv/radio," or "video/audio-on-demand."
The first radio station on the Internet is the Internet Multicasting Company of Washington. By the end of 1995, there were over 100 radio stations that broadcast over the Internet (Vaughan-Nicholas, 1995). In Taiwan, radio stations such as the Chinese Broadcasting Station (http://www.bbc.com.tw), ICRT (http://www.icrt.com.tw), and Philharmonic Radio Taipei (http://www. PRTmusic.com.tw) have set up their Web sites. Television stations such as the ERA Group (http://www.ear.com.tw), TVBS (http://www.tvbs.com.tw), the Chinese Television Station (http://www.cts.com.tw), and many others also venture into Web broadcasting (See Table 2).
Table 2: Internet Broadcasting Stations in Taiwan
Internet broadcasting has several advantages. First, it will free spectrum that is already overused and congested. Spectrum can be saved for mobile and data communications that create a higher economic value: a concept called "Negroponte Switch." According to the FCC, broadcaster spectrum used today could be worth between $40 billion and $100 billion if auctioned (McCandlish, 1996).
Second, Internet broadcasting is relatively cheap, especially for companies already in the broadcasting business. Third, Internet broadcasting allows people around the world to access audio and video programming 24 hours a day. In other words, it disregards both geographical and temporal limitations which have been haunting broadcasting since its invention.
Fourth, the Internet is heavily used, compared with other mass media. Results from the Nielsen and CommerceNet (1995) report suggest that the average weekly log on time per user is about 5 hours and 28 minutes, similar to the amount of time spent on watching videotapes in North America. NPD's survey also found that on average, each Web-active individual visited 21.7 different domains in January. The average Web-active individual looked at 3.7 different pages per domain. Each page was viewed 2.2 times. This heavy repetition of viewing the same page is primarily due to the use of search engines, where users return frequently for additional links (Johnson, 1996).
Fifth, the Internet has a growing number of users. Unlike traditional media such as newspapers, television, and radio, the Internet is a medium that has tremendous potential to accumulate a large pool of potential users. The Internet access points are growing at 50% per month, with subscriber growth running close to 30% per month (PR Newswire, 1996). It was estimated that by 1995, the number of Internet users approached 40 million worldwide. About 160,000 people become users every month (Roberts, 1995).
The spectrum scarcity rationale that is used to regulate broadcasting media was included in the Broadcasting Act of 1912 in the United States. Later, the legitimacy of government to manage broadcast spectrum was supported by the U.S. Supreme Court in the case of NBC v. United States in 1943 and Red Lion Broadcasting Co. v. FCC in 1969. The doctrine holds that broadcasters have a greater responsibility than other media to serve the public interests because broadcasters, unlike other publishers (of print media), are licensed to use scarce public resources (Samoriski, Huffman, & Trauth, 1997). Because of this scarcity of the electromagnetic spectrum, a broadcast licensee may not use a frequency to promote solely his own opinions. In addition, the frequency, because of its scarcity and public domain nature, should be operated in the public trust (Horwitz, 1989). The public trustee model is the foundation of broadcasting regulation in many countries. It also supports the notion that the limitation of spectrum available to all parties interested in disseminating their views through broadcasting media requires that government should play an active role in allocating and managing the broadcast spectrum effectively and fairly (Liu, 1994).
Scarcity is a resource-based rationale that limits speakers, based on the outdated premise that there are more speakers than there are outlets/channels through which speakers may express their views. In the past, because of the spectrum scarcity, conflicts arose between those who have access to the spectrum resources and those who do not. Conflicts also arise between the proponents of competing uses of the resource as well as between those who manage it and those who use it. These conflicts encompass various natures such as physical interference, commercial competition (Huang, 1993, cited in Struzak, 1996), freedom of speech, etc.
Scarcity has been the foundation for all areas of broadcasting regulation around the world (Samoriski, Huffman, & Trauth, 1997; Liu, 1994). However, with the introduction of cable and satellite communication technology, the scarcity rationale is shaky. Horwitz (1989) claimed that "it was the championing of 'new technologies' which ultimately had the most direct impact on the deregulation of broadcasting (p. 251). For example, the introduction of cable television was viewed as "a solution to the problem of conventional commercial broadcasting" (Horwitz, 1989, p. 252). With the addition of the Internet to the growing universe of radio and television programming, the rationale is under more severe attack. Historically, as early as the 1970s, the scarcity rationale has been under recurrent debate and examination. The Peacock Report, published in Great Britain to deal with a deregulated telecommunications environment, has pinpointed the difficulty of spectrum scarcity rationale. Chen (1991, cited in Liu, 1994) also pointed out that new communication technologies have expanded the capability of broadcast spectrum to an extent unimaginable in the past. For example, DAB will open up 64 more radio broadcasting channels (Li, 1997 April 14).
The rhetoric of spectrum scarcity affected how broadcast spectrum was viewed; as a result, a similar government frequency allotment scheme was used in Taiwan's broadcasting regulations in the past decades. The concerns over national security in the Cold War era and animosity between Taiwan and Communist China have led to the "freezing" of spectrum allocation in the past thirty years. As early as 1959, all applications to operate broadcasting stations were suspected by the government. Later, attempts by individuals, associations, and political parties to set up broadcasting stations were also rejected under the pretext that no spectrum was available for such use (Liu, 1992a, cited in 1994).
This control of market entry is called the "structure regulatory model" and was used to ensure that the mass media market can operate effectively with government allotment of spectrum. It employs an administrative denial mechanism that denies certain people access to radio spectrum by spectrum management rules and regulations in order to protect operations of radio-based systems from mutual interference. Administrative denial is applied to simplify the task of spectrum management and in many cases represents practical approximations to physical denials. It is also used to reserve spectrum for passive applications and receiving radio stations (Struzak, 1996).
However, the public has increasingly requested more freedom in setting up non-partisan television and radio stations after the lift-up of the Martial Law. In addition, commercial stakeholders have also pushed the government to expedite the process of releasing more broadcast spectrum. Consequently, Taiwan's government has set up a schedule to open the broadcasting market (Refer to Liu, 1994 for discussions on the history and development of spectrum allocation policy in Taiwan).
The advent of Web broadcasting has partially solved the problem of spectrum scarcity. Like cable television, the bandwidth is less of a concern for regulators. The technical promise has led to the conclusion by many broadcast reformers and public interest advocates that the Internet is a viable broadcasting medium that solves the long-lasting problem of citizen access. It was also thought that the Internet could end the commercial chokehold on Taiwan's mass media (Yang, 1996b).
However, the exponential growth of the Internet population as well as host computers has turned the Internet domain name into a limited resource. The spatial metaphor represented by terms such as "cyberspace" and "information highway" has ironically depicted the situation that many Internet advocates do not envision in the Utopia where everyone can get unlimited access to the Internet. As a consequence, the scarcity discourse is likely to arise as more people are connected to the Internet.
Many have found that the Internet domain name can be an important asset for a company. The concept of brand name in the cyberspace requires that companies choose an easy-to-remember and attention-getting domain name. However, the current first-come-first-served policy has resulted in many domain names with the above characteristics being taken away (Lin, 1997 February 19).
Huston (1997) argued that Internet addresses drawn from the global Internet address space have an intrinsic economic value. He also proposed that the valuation of the Internet address can be expressed by the following equation:
Value of an Address Component = [(Value of Uniqueness) + (Value of Routability) + (Value of Contiguous Size)] * (Perceived Utility Factor)
The major characterization of the Internet address space is the visible finite nature of the resource. Huston (1997) pointed out that about 25% of the address space has been allocated to service entities, and with the rocketing demand of the resources, some administrative control is necessary to prevent what he called "a perceived, scarcity-induced hoarding run on the remaining resources" (p. 27).
The shortage of Internet domain name is likely to worsen as more ISPs enter the online service market. According to the Market Information Center at the Information Industry Promotion Association (1996), the online information service market has grown over 31% in the past year. The market value has reached over 59 billion (NTD) and is expected to reach 80 billion next year (Chang, 1996 November 23). Two major online service providers, HINET and SEEDNET, are planning to expand their pool of subscribers. Currently, HINET has 200,000 subscribers, but is expected to reach 427,000 by the end of 1997. SEEDNET has only 80,000 users, but will reach 250,000 at the end of the same year (Fei, 1997 February 4). Statistics from TWNIC have indicated that commercial Web sites have increasingly become the dominant driving force of the Internet. From February to October 1996, commercial Web sites have increased two times (Yu, 1997).
Consequently, the problems of the current Internet domain name arrangement have attracted attention from the International Ad Hoc Committee (IAHC). In late 1996, IAHC proposed to increase the number of names that can be used to specify Internet locations, such as Web sites, and to introduce competition in the registration of Internet names. More Internet names will be possible through the creation of seven new generic Top Level Domains (gTLDs) that will be added to the existing ones (.com, .net, and .org). The IAHC categorized .com, .net, and .org as generic TLDs, noting that they had previously been miscategorized as international TLDs. The IAHC concluded that there was only one true international Top Level Domain (iTLD), .int, which is dedicated to organizations that answer to multiple national governments, such as U.N. treaty organizations (IAHC, 1996). The new gTLDs and the intended fields of use are:
The existing .com, .net and .org gTLDs are administered by Network Solutions, Inc., (NSI) under the authority of the Internet Assigned Number Authority (IANA) through a Cooperative Agreement with the U.S. National Science Foundation. Sharing of these gTLDs will be the subject of discussions with NSI as will NSI's registering of names within the new gTLDs (IAHC, 1996).
The ultimate goals of the IAHC plan are to allow any qualified entity to become a registrar, and to have every registrar sharing the ability for registering domain names in all gTLDs. Because of concerns over managing change in a critical Internet resource, the IAHC decided that the number of additional registrars to be authorized in 1997 should be limited to between twenty and thirty, with additional registrars added at the rate of twenty to thirty per year, subject to an annual review of the efficient functioning of the system (IAHC, 1996).
The economic value of the Internet address is viewed as equivalent to that of the spectrum by many public interest groups. Rutkowski (1997) from the Internet Society has argued in his brief that the Internet TLD name space should be treated as a public resource and should be subject to the public trust. He further claims that "any administration, use and/or evolution of the Internet TLD space is a public policy issue and should be carried out in the interests and service of the public" (p. 2).
The word "public" in the context of telecommunication services has been understood since the International Telegraph Convention of Paris of 1865 to provide a primary basis for government jurisdiction, regulation, and in many cases, monopoly provision of services, and has dramatic implications with respect to the application of a panoply of international and domestic laws (Rutkowski., 1997). As a result, viewing Internet address space as a public resource will lead to the need for some form of government intervention into its allocation and management.
In Taiwan, TWNIC has considered the proposal to charge for Internet domain name registration in Taiwan. The proposed guideline has sprung from management concerns. TWNIC's study has found that, under the current one-entity, one-domain name policy, many have borrowed from a "ghost entity" to obtain the second or third domain name. A more market driven regulatory mechanism will be introduced as early as June, 1997. In addition, a $500 (NTD) registration fee will be required as well as an annual fee of $1,000 (NTD) (Yu, 1997a & b).
To follow technological changes, the existing regulatory system should be adjusted or proposed to cope with the new media environment. A variety of industries, market-driven, and even governmental initiatives are now being considered and undertaken to deal with this domain name matter. These efforts include, for example, the preparation of technical and legal specifications for open, competitive provisioning of Domain Name System (DNS) services, joint industry-government research studies, and the creation of broad new industry institutions (Rutkowski, 1997).
The impacts of Web broadcasting and ensuing issues on domain name scarcity are twofold. Allowing the operations of Internet broadcasters will endanger existing broadcasting stations, although in many cases these stations also operate their own broadcasting stations in the cyberspace. This type of bypass can affect the whole rationale of broadcasting regulations in Taiwan. It can hardly be justified that government will impose so many procedures in terms of applicants, foreign investment limitations, cross-media ownership, etc., as current broadcasting regulations stipulate if anyone can just get online and start their own broadcasting stations.
On the other hand, as more and more people use the Internet, net congestion is likely to happen. Treating Internet domain name as a public resource demands a more active role of the government. New regulatory mechanisms also need to be figured out. New policy should be adopted to prohibit, in the new gTLDs, practices such as trademark piracy or warehousing (cyber-squatting). These practices are currently widespread, but add nothing positive to the Internet. More often they result in instability, uncertainty and misdirection of Internet resources.
The instant transmission of audio and video programming over the Internet will have a major impact on radio and TV stations in Taiwan. Broadcasting on global computer network or the Internet may start fierce competition between computer networks and traditional TV and radio networks. Recently it was decided that radio, television, and mobile operators will be charged a fee to use the spectrum. It is estimated that this new measure will bring into the government treasury more than 100 million (NTD) (Cheng, 1997 January 10).
Although the transition to the next version of IP-version 6 will prevent the occurrence of scarcity in Internet address space, the issue of Internet address resources should still attract attention from policy makers. The widespread adoption of next generation Internet protocol will depend on how the weaknesses of the current administrative regulatory mechanism are solved.
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