S'pore to update media competition code

Summary:Regulator proposes new revisions to the country's media competition code to prevent cross-subsidies that may arise from providing converged services.

SINGAPORE--With the media and telecoms sectors converging to provide new multimedia services, the island-state has proposed changes to its Media Market Conduct Code to keep pace with market developments.

Speaking at a media briefing today, Tania Lim, assistant director of market policy at Singapore's Media Development Authority (MDA), noted that media convergence is an ongoing trend, making it necessary to revise the Code to ensure new players operate on a level playing field.

One key proposed revision to the Code aims to prohibit media players from "unreasonably leveraging" its affiliates that have "significant market power" in an industry segment that restricts competition in any media sector, Lim said. Media players are deemed to be affiliates with a company in which it has a direct or indirect ownership of 5 percent or more, she explained.

According to Lim, this provision was not included in the existing Code but is important in ensuring that new media players have a level playing ground. Without this revision, a media player "may engage in cross subsidization and [may leverage] the power of its telco [affiliate]."

Earlier in January, SingTel launched a new triple-play converged service that includes mobile, fixed-line and broadband Internet bundles, with IPTV services in the pipeline. Later that month, M1 CEO Neil Montefiore also expressed concerns over any potential cross-subsidy in the provision of monopoly services.

Ling Pek Ling, the MDA's director of media policy, noted that the Code does not prohibit product or service bundling, as long as the media player does not make such services mandatory.

According to the Authority, the Code was first introduced in April 2003 to lay out ground rules for fair market conduct of media industry players and ensure there is fair competition. Dominant players, for instance, are not allowed to impose mandatory bundling of services, where consumers are forced to buy services as a package and not as standalones.

Ling Pek Ling, the MDA's director of media policy, said: "By widening the scope of the Code, we will be able to address emerging media markets and any competitive issues."

Lim added: "On top of the good old TV we've had for the past 20 years, we now have HDTV (high definition TV), VOD (video on demand) and mobile broadcasting."

"The advent of such converged technologies means Singapore's media industry will become more vibrant," she said. "And as you move into the digital age, convergence presents media players with many new opportunities, and we'll see a lot of new business models as well."

Lim said the new provisions will cover beyond the current broadcasting and print sectors, to include films and others as specified by the Minister for Information, Communications and the Arts. "We've proposed to widen the application of the Code to any media service provider," she added.

IT lawyer Bryan Tan at Keystone Law Corp, said the proposed revisions would extend the Media Market Conduct Code to ISPs and Internet content providers such as Web site owners, that have been granted a Class License under the Broadcasting Act. Class Licenses are issued to ISPs and Internet content providers, which must adhere to the terms and conditions in the license, covering largely content-related policies.

The proposed revisions would then mean that ISPs could be subjected to the competition regulation by both the MDA and IDA, he said.

However, Ling said the new provisions will not apply to emerging Internet content such as blogs and podcasts. "The purpose of the competition code is to address areas where there is market concentration and danger of anticompetitive behavior.

"The Internet content market is a very big and diverse market, and so we're not expecting that there will be any major anticompetitive issues that need attention," she said.

Other proposed changes to the Code include expanding its existing scope to include the entire media industry, rather than just the broadcast and print sectors, such as IPTV and VOD.

Market dominance definitions will also be adopted on a case-by-case basis, rather than pre-defined, as it is currently done. The MDA said this will allow the authority to classify media markets based on the facts of the competition case and current media market dynamics.

The MDA is seeking public feedback on the proposed changes to the Code, and is expected to implement the new revisions by late 2007.

Topics: CXO, Browser, IT Employment, Legal

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