In mid-February, Taiwan's broadcasts regulator, the National Communications Commission ("NCC"), proposed a draft amendment to the existing satellite broadcasting legislation that would allow limited investment by governmental entities and political parties in satellite broadcasting businesses. Existing legislation entirely prohibits such investment and has been interpreted by the NCC as applying not only to any government agency or political party but also to any entity (including non-state-own companies) in which any government agency or a political party has any shareholding. According to the draft amendment proposed by NCC, indirect investment in a satellite broadcaster by governmental entity and/or political party with an aggregate shareholding not exceeding 10% (on a fully-diluted basis) will be allowed, provided that the said investing government entity or political party shall not have control over the personnel, operations, or finances, of the invested broadcaster, and serving as a director, supervisor, or management staff of such a company will be considered as holding the said control.

Government entities and political parties shall also not invest in offshore satellite broadcasters that engage in broadcasting activities in Taiwan, with the same exceptions as those applicable to domestic broadcasters. Any investor that violates these investment restrictions shall lose its voting rights in the invested entity and the NCC has the power to further order that the investing government entity or political party dispose of its investment within a period specified by the NCC. Failure to do so would result in the loss of all rights and benefits for the entire investment, including dividend distribution rights.

The proposed amendment will need to be approved by the Cabinet and then reviewed and approved by the Congress before it can become effective.

The Taiwan government recently decided to grant two new mobile television franchises and has appointed the NCC as the government agency that will be in charge of the franchise granting process.

It has been proposed that each operator that is eventually granted a franchise be allocated a frequency of 6MHZ. The NCC is considering completing the franchise granting process towards the end of this year or early next year. The current proposal is to grant the new franchises via an examination followed by a bidding process. Accordingly, the applicant would need to undergo an initial examination of its business proposal and, if that proposal is deemed viable, the applicant would then be permitted to participate in the bidding process.

The NCC has proposed setting a minimum paid-in capital requirement of NT$ 1 billion (around US$ 32 million) on the operators that are granted the said franchises. The NCC is also considering setting a cap on bids so that smaller businesses would also have a more reasonable chance of being successful in the bidding process.