[VIewpoint] New media bills don t go far enough

On Wednesday, the three media bills to revise broadcasting, newspaper and Internet protocol TV regulations finally passed at the National Assembly. It was a minor miracle that it happened at all after all the lengthy debate and grueling controversy that have beset the bills since the current administration took office last year.

Of course, this is Korea and the battle is not completely settled. The conflict is likely to continue as many opponents, including the main opposition party, will not accept defeat.

But, barring some surprise, this much seems clear: Easing regulations, such as allowing cross-ownership of newspapers and broadcasters and allowing a conglomerate to enter the broadcasting business, will dismantle part of the media industry system while preparing the foundation for competition.

The current media system, after all, was formed by a military despot in the 1980s to make the media trumpet the virtues of the administration.

That military rule integrated private broadcasters, namely TBC, DBS, Jeonil Broadcasting System, Seohae Broadcasting Corporation and Korea FM, into KBS, banned religious broadcasters such as CBS from reporting news, and made KBS take over 65 percent of MBC.

These changes created government dominance over all broadcasters, fostering the collusive, dominant structure of network broadcasters of today.

The structure has been sustained by allowing the Korea Broadcast Advertising Corporation (Kobaco) alone to handle distribution of broadcast advertising and by legally endorsing questionable collusion tactics, such as making it mandatory for broadcasters to buy less popular programs when they purchase more popular ones.

This practice had drawbacks: Management is lax while broadcasters are unbelievably harsh and unfair to program providers. Moreover, irregular workers, including entertainers, have unfair contracts, programs are made in favor of broadcasters or their employees, people who know influential figures are employed as heads of broadcasters and union workers stage illegal strikes.

But even if the revision of the three media laws revives competition in the industry, the industry will still be challenged and have a chance to improve its position considerably.

The new legislation will likely accelerate the integration of communications and broadcasting, industrialize the media based on the development of technology, and open media markets to boost competitiveness. As regulations and institutions are revised, we may have competitive Korean business executives or companies that run on multiple media formats that can withstand global competition.

This is important because a business built under these structures is likely to revive other industries, such as those involving culture, content providers, software and games, which are important to create quality jobs.

Nevertheless, easing only part of the regulations on entering the broadcasting industry, as stipulated in the revised media laws, will not be enough to nurture the media industry or correct broadcasters politically charged characteristics.

Kobaco is still at the top of a collusive, dominant structure as it controls distribution of commercial films, which is decisive for broadcaster profits.

Viewers do not pay subscription fees to broadcasters. Broadcasters make profits from advertisements. Under these circumstances, sustaining the monopoly system for broadcast advertisements suggests that the dominant structure will probably continue.

Under the revised media laws, conglomerates, dailies and news agencies are barred from investing in broadcasters or having management rights in one until 2012.

Even then, they can only own less than a 10 percent stake in a broadcaster. On the other hand, for network broadcasters, channels with various programs and news channels, the limit on the percentage an individual can own has been expanded to 40 percent. Therefore, it is very difficult to revive competition in the market.

This blocks mergers and acquisitions among existing network broadcasters and makes it difficult for new broadcasters to compete against existing ones.

Therefore, to complete reform in the media industry in a way that benefits our country, Kobaco must be disbanded, full competition must be introduced in the market for agencies that sell or distribute advertisements to broadcasters, network broadcasters must be privatized and the regulations on the purchase of shares in the broadcast industry by new players must be eased even further.

*The writer is the head of the corporate research division of the Korea Economic Research Institute.

by Rhee Zu-sun