Legislation Seen Helping Korean Cable

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South Korean lawmakers are expected to pass long-awaited
legislation this month or in January that could help to unify a fragmented multichannel-TV
industry and to stem the unauthorized retransmission of cable and satellite networks.

The Unified Broadcast Law, as the legislation is known, has
been on the table for four years and under review by a government-sponsored broadcast
subcommittee over the past two years.

It's now awaiting final approval from South Korea's
National Assembly -- the country's legislative branch of government -- which meets today
(Dec. 20) for the last time this year. If it is not passed then, industry executives
expect it to get the OK when the Assembly reconvenes in January.

"Allegedly, everyone on the [broadcast subcommittee]
has OK'd it, so all that remains is the seal of approval from the National Assembly,"
said Keiko Bang, an expert on South Korean media and president of documentary producer
Bang Productions Ltd.

South Korea has about 1,000 terrestrial-relay, or MATV
(master-antenna television), operators, which have retransmitted broadcast-TV signals over
their cable networks since the 1960s. However, many have become frustrated with the growth
of traditional cable TV, and they have illegally downlinked and retransmitted foreign
cable and satellite channels.

It's expected that the Unified Broadcast Law "will
place cable-television and relay operators under the auspices of the same government
ministry, thereby resolving a lot of the long-standing problems between these two
parties," Korean Cable Television Association president and CEO Jong Soo Choi said.

Bang added that the Universal Broadcasting Law will address
the advent of direct-to-home satellite TV and make the industry more open to new
investors.

Problems between the MATV and traditional cable camps began
with the Cable Television Act of 1991, which separately addressed system operators, cable
channels and companies that own cable-network infrastructures, restricting cross-ownership
between the three. It also mandated a complicated scheme for the three parties to divvy up
subscriber revenue.

As the industry became more competitive, the two sectors
engaged in price wars. And to make themselves more appealing to customers, MATV firms
started to illegally retransmit cable and satellite networks.

The new legislation will open the doors to cross-ownership
of different elements of the cable industry and allow system operators to build their own
physical networks, said Min Joo Lee, president of Chosun International Inc., a company
that controls Korea's largest MSO.

He also noted that MATV and traditional cable TV operators
would be permitted to merge under the bill, enabling them to achieve operating economies
of scale.

Foreign firms may own up to 33 percent of South Korea's
cable-industry companies. Bang speculated that if there is any change, foreign firms would
be allowed to invest even more.

Choi predicted that the Universal Broadcasting Law will
help to integrate the country's 7 million MATV homes and 3.2 million cable homes, creating
a 10 million-plus-subscriber cable market.

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