SARFT Gets to Grips with 2001 Challenges

BEIJING --- In recent months, there has been talk of "separation of production and broadcast" and "merger of terrestrial and cable" followed by a public reversal of the first policy (and delay on the second) after the appointment of a new SARFT Director.

At the current time, sources tell CMM-I, SARFT is very much in favour of re-claiming central control over a broadcast system that it sees as "hopelessly out of control - politically, legally, technically, commercially and creatively".

Among the "merger" remedies now under consideration is the closure of terrestrial and cable TV stations at the city district and county levels. Under this plan, these most local of operators will no longer be allowed to engage in production or broadcast of their own programs nor to purchase programs from outside sources. They will, instead, become relay stations only.

While, in principle, such a move would consolidate control at the more manageable municipal level, SARFT faces an extremely difficult task in actually closing down the operations in thousands of districts and keeping them closed. Although a full solution would require full backing of several other branches of the government, SARFT is also set to use a number of other methods to get the job done.

The first is to use "technical upgrade" as a method of wresting back control. By setting high standards for the introduction of digital systems, local districts will be forced to rely on central funds to maintain their technical compatibility with main service providers.

Second, SARFT is to continue to rely on the regulatory controls it does already enjoy, notably in the area of punishing stations that break censorship and other rules. There have been multiple cases of local district cable operators broadcasting pornographic and "dirty" films late at night and punishments for such abuse of licenses will reach the maximum level - closure - on the first offence.

In a recent case, the local cable operator in one city district was found to have broadcast "dirty" films on two occasions after midnight. Failing to get the necessary support from the district's propaganda units, SARFT took the step of cancelling the station's license, sacking the leaders and changing the unit into a relay channel.

SARFT is also committed to cleaning up the program production and distribution sectors and is expected to introduce a new registration procedure that will end the existence of separate production and distribution companies.

According to proposals currently being tabled by SARFT, the right to produce and distribute TV programs will be limited to national, provincial and "special planned" companies with minimum registered capital of RMB5 - 10 million.

The applicants will also have to show proof of facilities and production assets. This includes suitable premises and a minimum ratio of professional technical and production staff to total employees. SARFT would also require companies to submit their production and sales plans and provide an inventory of all equipment.

Under this plan, licenses would only be issued for combined "production and distribution" companies, so it will no longer be possible to apply for just a "production" or "distribution" license which has provided many smaller players with a way to enter the game.

While the above describes some of the solutions currently under consideration, it must be pointed out that final legal structures required to really clean up the industry are unlikely to emerge in the short term. For every policy recommendation that clamps down on one aspect of the industry, there are several alternative strategies available to the market.

In the case of the "separation of production and broadcast assets", the news had barely reached the smaller cities in China, before it was rescinded. The result is, as you may see from this issue of China Media Monitor, everyone continues to work out their own solutions inside the legal vacuum.