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Regulations to Remain Minimized for “Public Benefit and Convenience”
The deregulation is believed to facilitate convergence between telecommunications and broadcasting as well as the technological development of the ICT industry
Regulations to Remain Minimized for “Public Benefit and Convenience”
  • By matthew
  • July 19, 2013, 02:30
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Lee Kyung-jae, Chairman of the Korea Communications Commission.
Lee Kyung-jae, Chairman of the Korea Communications Commission.

 

Lee Kyung-jae, the first chairman of the Korea Communications Commission (KCC) under the Park Geun-hye government, began his interview with Business Korea by saying “Broadcasting, as an opinion maker, is one of the fields exerting the greatest influence on the general public amid the current political and ideological conflicts in the country.” Under such circumstances, the leadership of the organization are recommended to take office by the ruling and opposition parties in the interest of impartiality and fairness. The Chairman, however, stressed that the continuation of the strike in the public broadcasting stations, led by left-wing labor unions, could appear to be a suppression of the press on the part of foreigners, adding that it is a sort of side effect of the country’s rapid democratization and industrialization. 

First of all, congratulations on your appointment as the first KCC chairman in the incumbent government. What are your initial impressions? 

I served the Bureau of Public Information, the predecessor of the KCC, and actively engaged in proceeded with legislative activities in this field, which has made me familiar with this job. I would like to express my gratitude to all those who helped me get this job and at the same time mention that I am well aware of the weight of my responsibility. 

Looking back, I remember that I declared 'the new media era of multiple channels and multiple media has started' at Korea’s first cable TV station opening ceremony back in 1995, as vice minister of the Bureau. I harboured some suspicion in fact back then, but the declaration has turned into reality and given rise to drastic changes in our everyday lives. 

As of now, we have more than 270 TV channels, with the number of cable TV, satellite TV and IPTV subscribers surpassing 15 million, four million and seven million,respectively, which means over 90% of Korean people are watching terrestrial broadcasting on a pay-per-view basis. More recently, the dish convergence solution (DCS), has been made available so that satellite TV programs can be enjoyed via the Internet without a dish, and more than 30 million people watch programs on their smartphones.

Internet TVThe number of subscribers was rather slow during the early stage of cable TV, due in part to the Asian financial crisis, but all of the staff in the Bureau, including myself, worked hard to successfully popularize the media, something I am very proud of even after all these long years. 

My organization and I will thoroughly provide against the era of smart technology, so that the public can enjoy better broadcasting services with greater convenience. 

Some people are saying that you were selected because you are close to the President. What do you have to say in response to this? 

It is true that I have lent some support to her campaign, but it is a stretch to say that I was appointed because of that reason. I started my career as a journalist at the DongA Daily before working for the Korea Broadcast Advertising Corporation (KOBACO). I then served as the spokesperson for the Presidential Office and vice minister of the Bureau of Public Information, as well as served the National Assembly as a four-time lawmaker and a member of its Standing Committee on Broadcasting and Telecommunications. In short, I have been engaged in this industry throughout my career. 

As deputy head of the Bureau, I introduced cable TV so that Korea could take the lead in the fast-changing global media environment. As a legislator, I participated in many important policy discussions in the standing committee, meaning that my legislative and administrative experiences can be of help in dealing with complicated problems and policy issues, thus helping to accelerate the advent of new paradigms in the industry. I believe that such efforts have resulted in me being given this coveted position. 

When I was young, I criticized the government for its wrongdoings and lost my job as a result. My books were banned from sales for the same reason. As such, I am well aware of the importance of impartial and non-partisan broadcasting and I guess that the people sympathized with me in this aspect, too. 

The KCC’s scope of duties has been adjusted slightly following the reorganization of the government. Please give a brief explanation regarding it. 

The Park Geun-hye government has come up with the concept of creative economy as its paradigm for future economic growth. The President, right after her election, reshaped the administrative structure and set up a new entity in order to take charge of the pursuit of this. As far as I understand, creative economy is about increasing economic added value and creating jobs by means of people’s imagination and creativity in order to cope with the lack of natural resources. The broadcasting and telecommunications industry, along with the information technology sector, are one of the key fields for the realization of this, and an area in which every single second matters. We all remember how Nokia, which had been the world’s largest mobile phone company, collapsed after failing to keep up to speed. Likewise, Korea succeeded in developing its own IPTV technology in the early 2000s, not much later than advanced economies, but then spent four years putting the technology to commercial use, whereas the others began commercial services right away. This is why the current government established the Ministry of Science, ICT and Future Planning and gave it responsibility for the industrial and technical sides of the broadcasting and telecom industry. Matters related to freedom of speech and impartiality of broadcasting will be handled by the KCC in this framework down the road. 

I am sure that the government made the right decision. It will help the country cling to the core value of democracy and cope with the trend of convergence between broadcasting and telecommunications, allowing Korea’s ICT industry to grow as a future growth driver. 

During the course of the structural overhaul, the ruling and the opposition parties had a severe clash of opinions, delaying the official launch of the new government by roughly 50 days. 

Political and social systems have their own distinct characteristics by country, though they are quite similar to each other in some aspects. Korea’s administrative entity in charge of broadcasting has shown some uniqueness throughout its history, too. Korea went through a lot of political and ideological conflicts in its industrialization and democratization process, and broadcasting has played a crucial role during the course as a leading opinion maker. Discussions have been repeated over and over in order to guarantee the political neutrality and impartiality of the broadcasting sector, the results of which include the present structure of the broadcasting administration and how the head of the public television service is appointed. The KCC is led by two figures recommended by the President, one by the ruling party and the other two by the opposition, while the head of the Korea Broadcasting System (KBS) has to be recommended by the station’s board of directors, which is modelled after the way the president of the BBC is elected. 

Earlier this year, the opposition raised concerns that the impartiality of broadcasting could be compromised once some of the duties of the KCC, a consensus organization, are handed over to the new ministry that is not a commission-based organization in nature. The validity of such concerns was investigated, as well as time taken to fine-tune the scope of authority between the two agencies. Foreign broadcasting organizations such as the FCC of the United States might find the situation hard to swallow because they are innate and unique to the broadcasting and telecom industry of Korea. 

What are your top priorities as the head of the Commission and what are you planning in regards to a creative economy? 

I am planning to focus on three things. The first is the freedom of the press and its impartiality and public nature, which are the most important factors for the principles of democracy. 

Various functions of Smart TV.Second is deregulation, the purpose of which is to facilitate the convergence between telecommunications and broadcasting and the technological development of the ICT industry. We have already learned lessons from Europe’s ICT industry, which is lagging behind that of the US, as well as Japan’s mobile phone manufacturing industry, which has suffered from the so-called Galapagos syndrome. 

Last but not least, we will provide more support for the digital content and advertising sectors, which are two of the drivers of a creative economy and offer the most favorable jobs for the young generation. Broadcasting content, including Daejanggeum (Jewel in the Palace), Psy and Pororo, have extremely high added value and can help increase Korea’s international standing. Advertising, on its part, is capable of blowing a wind of change in industries as a whole in combination with certain products and regions, and is not limited to simply publicizing them. 

You have paid numerous on-site visits since taking over. What do you remember the most from these tours? 

I visited the Educational Broadcasting System on May 22 and had some meaningful conversations with people regarding the hot-button issue of private education. There is no doubt that Korean parents’ zeal to provide their children with better education has formed the foundation of the country’s prosperity, but it has also had its own negative effects. More than 20 trillion won is spent every year for private education these days, which amounts to some 1.5% of the national GDP, with the actual sum expected to double when the portion that eludes statistics is factored 
in. 

However, things appear to be changing. College prep institutes in Gangnam and Daechi-dong are having a hard time attracting students, while the stock prices of private education service providers have been halved according to some reports. This is because approximately 70% of the national college entrance exam is based on EBS programs, meaning that the national broadcasting service is making a significant contribution to the reduction of private education costs. 

The EBS’s language content is particularly good. President Park Geun-hye recently completed her successful trip to the United States, with her speech in Congress receiving rave reviews both home and abroad. She said in an interview that she studied English and Chinese using EBS’s programs. 

The President is highly committed to better education policy based on teaching that fosters creativity. I myself believe that EBS has a critical role to play for such a goal. I met with over 30 overseas journalists in late May this year, and all of themwere highly interested in the role of the company in this regards. KCC and EBS will make joint efforts from now on so as to provide more high-quality educational content for students in all grades in various ways, including terrestrial broadcasting, cable TV, the Internet and smartphones. 

The Commission recently decided to set up a policy discussion body for next-generation terrestrial broadcasting. What is the background and scope of its role? 

The consultative body was officially launched on May 30 by the four terrestrial broadcasting stations and Samsung Electronics, LG Electronics, etc. Once next-generation terrestrial broadcasting services begin, more quality content will be made available for the convenience of viewers. One example is ultra HD TV, whose resolution is four times that of existing HD TV. Its economic ripple effect is expected to be huge, with Korean and Japanese TV manufacturers vying fiercely to take the market initiative. 

Japanese home electronics manufacturers and NHK are cooperating with one another, backed by the government, to regain leadership in the global TV and smartphone markets from Samsung and LG. Under such circumstances, their Korean counterparts are striving to keep their number one spot by preparing a new roadmap for advanced terrestrial broadcasting services and further sharpening their competitive edge. The KCC will do its part by providing legal and system-related assistance. I think that the Incheon Asian Games scheduled for next year and the 2018 Pyeongchang Winter Olympics will be good opportunities to show off our cutting-edge technology to the whole world. 

The issue of retransmission fee has not been resolved between terrestrial broadcasting networks and cable TV stations. What is your opinion regarding this? 

The retransmission system is defined as the supply of terrestrial broadcasting programs to viewers via pay TV. As of now, the 'must-carry’ obligation is applied to the programs of the KBS1 and EBS. The dispute dates back to April 2008, when terrestrial broadcasting companies, including KBS2, MBC and SBS, began to demand fees for their content. The tension was escalated last year, causing a one-week halt of terrestrial broadcasting programs. 

In the past, cable TV companies needed such programs to attract more subscribers. However, the number of subscribers is around 15 million now, and I think that the matter should be considered anew in the long-term, allowing for changing conditions in the industry. Along with whether to expand the must-carry rule to cover certain channels, the Commission will consider the issue in perspective: on the one hand, the issue is about the royalty paid to the terrestrial broadcasting stations for their increased competence on the production side, while it is about paying the price to cable networks for carrying over terrestrial programs. 

You are scheduled to visit the United States to look into its broadcasting retransmission system. Can you tell our readers more about this?

In the US, multiple cable TV operators compete in certain regions and thus pay TV has to make payments to terrestrial broadcasting stations. European countries, in the meantime, approach the matter from the perspective of universal service and therefore the payment is made the other way around or no payment is made at all. 

The KCC needs to decide on an approach, but it is a difficult matter as diverse market conditions must be taken into consideration. I am going to visit the FCC of the US and some local broadcasters in late July in order to better understand how to resolve the matter. At the same time, I will look around the American media market as a whole so as to create an overall picture for the development of Korea’s broadcasting industry. 

Political and economic interests are intertwined in the broadcasting and telecom industry. Please talk about how best to promote the solid growth of the industrial ecosystem, your own philosophy, and beliefs to that end, etc. 

We have witnessed many examples of conflict between existing operators and their emerging rivals that overcome the limit of technology so as to provide more diversified services in wider regions. One such example is the DCS service, which was not available for a while due to opposition from cable TV companies. The story is the same for the multi-mode service (MMS), which allows more terrestrial channels to be transmitted using the same frequency, and advanced digital compression technology. Newspaper companies and cable TV stations are dead against the launch of the service. Yet another example is the 8-level vestigial sideband (8VSB), which allows cable TV subscribers to enjoy HD content without extra payment. It has yet to get over opposition from some program providers. 

I would like to emphasize that the most important consideration in all policy decision-making processes is “how much benefit and convenience” they will give for the public. Therefore, regulations and restrictions will have to remain minimized as long as technological development helps promote public interest. No media channel should be content with past success. Instead, they will have to continue to strive to do good for the people through technological innovation.