The Korean government will fully allow foreign investment in program providers (PPs) ahead of the implementation of the KORUS FTA scheduled for March next year. Under the circumstances, experts point out that fair rules should be adopted to prevent reverse discrimination against Korean broadcasting companies.
The Ministry of Science, ICT and Future Planning made an announcement of legislation on the Broadcasting Act on April 16 to ease the restrictions on indirect foreign investment in PPs.
According to the current law, foreign capital cannot account for over 49 percent of a PP. However, the restriction on indirect investment is lifted with the implementation of the KORUS FTA and the subsequent opening of the domestic broadcasting market. The Ministry is going to make the details of the pre-announcement public by May 26 and then collect opinions from various parties in the industry before submitting the amendment to the National Assembly in the latter half of this year.
Industry insiders advise that fair ground rules should be in place so that Korean broadcasting companies can compete better with foreign entities, although one year is left until the opening of the market. “Google, in Korea, has not been subject to domestic law, so Korean Internet firms complain of reverse discrimination, and the exact same thing can happen in the broadcasting field,” said media studies professor Kim Seong-cheol at Korea University. He added, “Excessive regulations have to be relaxed to ensure fair competition.”
They are also saying that the potential damage could be even greater to small and mid-size PPs in such segments as sports broadcasting and film, which have been dominated by foreign PPs. “Channels like Fox TV and ESPN have been doing business in Korea on only a limited scale, due to the matters associated with the shareholding structure and the like,” one of them explained, continuing, “However, things are likely to change from now on once leading broadcasting companies initiate full-scale sales and content supply.”