(Annex)

Final Report of "Study Group on Broadcasting Policy" (outline)

I. Situation surrounding broadcasting

1.   Changes of media environment
  Looking into the media environment, which includes restrictions in frequencies, evolution of technologies, development of services, trends in viewing/listening modes, business performances of broadcasters, etc., there are factors that change and remain unchanged.
[Major factors that changed]
     Increase in the number of available means for obtaining information by viewers/listeners using various media, such as progress in broadband platform deployment, diffusion and development of via Broadcasting Satellites (BS), Communications Satellites (CS), Cable television broadcast.
   Growing shares of key stations (*1) in total operating revenues of all terrestrial TV broadcasters
   Increasing burdens of investments in digitalization of terrestrial TV broadcasting and initial costs for setting up BS digital TV broadcasting media
[Major factors without changes]
     Social influence of broadcasting still remains unchanged.
   With respect to scarcity of frequency resources, assignable frequencies are limited with the exception of a portion of those for CS broadcasting.
   Terrestrial TV broadcasting is the most basic media.
    (*1) key stations: a large-scale broadcaster which broadcasts in major metropolitan area.
2.   Trends in media development and expected roles of media

(1) Relationship between terrestrial TV broadcasting and satellite broadcasting
  Since local-based broadcasting will gain importance from now on, it is foreseen that terrestrial TV broadcasting will seek local-based development by placing importance on a community to be covered.

  It is anticipated that satellite broadcasting in the future will play the role of quasi-basic broadcasting media or multichannel special broadcasting media, the role of diffusing digital broadcasting and the role of broadcasting media for local stations airing their original broadcast programming nationwide.
(2) Relationship between broadcasting and broadband communications

  Broadcasting and broadband communications have developed as unique media that differ from each other. The relationship between the two is not substitute, but the combination of the two will make synergy effort, in principle.
II. The "principle of media ownership rule"

1. The "Principle of media ownership rule" and its policy purposes

(1) Significance of the "principle of media ownership rule"
  The "principle of media ownership rule" is set forth for the purpose of contributing to sound development of democracy, by ensuring opportunities for as many persons as possible to conduct broadcasting services, so that as many persons as possible can enjoy freedom of expressions via broadcasting. In principle, the number of broadcasting stations, etc. possessed or controlled by one person is limited to one. (Definition for "control": With respect to terrestrial broadcasting, "more than one-tenth" of voting rights possessed by a person. In cases where coverage of broadcast service areas does not overlap, "one-fifth" of voting rights and over possessed by a person. With respect to satellite broadcasting (BS digital broadcasting), "one-third" of voting rights and over possessed by a person.)
(2) Policy purposes for the "principle of excluding multiple ownership of media"
  With regard to the "principle of excluding multiple ownership of media," it is appropriate for important policy purposes as follow be continuously attained, namely i) "plurality" ensuring different and multifaceted broadcasting entities (entities not controlled by others), ii) "diversity" enabling viewers/listeners to select various broadcast programming and obtain necessary information, and iii) "localism" allowing for existence of media for the transmission of local-based information.
(3) Relevant policy challenges, etc.
  In the course of review concerning the existing "principle of media ownership rule," it is vital that consideration be paid to i) the improvement of content, such as realization of much higher quality broadcast programming, and ii) the policy challenges such as stable diffusion, etc. at an early stage of digital broadcasting from which public can benefit.
2. Adequacy concerning the review of the existing "principle of media ownership rule"

  Unchanged points concerning terrestrial and satellite broadcasting shall be sufficiently considered. At the same time, the changing environment surrounding the media is to be highlighted, in particular, the availability of increased choices for viewers/listeners to obtain information. Taking into consideration these points, it is basically adequate to relax appropriately the existing "principle of media ownership rule." Through this relaxation, it is anticipated that the sound development of broadcasting and benefits for viewers/listeners will be ensured.
III Practical directions of review on the existing "principle of media ownership rule"

1. Terrestrial broadcasting

(1) Deregulation within the same broadcasting service area and between different broadcasting service areas

  Deregulation within the same broadcasting service area is at risk of directly affecting "plurality in broadcasting" in said area. On the other hand, deregulation between different broadcasting service areas will not affect "plurality in broadcasting" in said areas. Thus, deregulation within the same broadcasting service area shall be carefully dealt with (e.g., the "maintenance of the status quo" [limitation on "more than one-tenth" of voting rights possessed by a person] or "minor deregulation").
(2) Deregulation between different areas

1) In cases of deregulation between key stations and local stations
  Deregulation shall be carefully deliberated upon within the scope in which the local features of local stations may not be deteriorated (e.g., the "maintenance of the status quo" [limitation on "one-fifth and over" of voting rights possessed by a person] or "minor deregulation").

2) In cases of deregulation between local stations

  a) Between broadcasters who comply with "certain conditions taking into consideration the local features" ((i) a broadcast service area adjacent to another broadcast service area, and (ii) limited to 2 broadcast service areas), it is appropriate to introduce major deregulation, for instance, "cross-ownership of two or more broadcasting station (or wholly-owned subsidiaries)."
  b) In cases where "certain conditions taking into consideration the local features" are not met, "cross-ownership of 2 (or wholly-owned subsidiaries)" shall not be allowed. With regard to regulations on capital ratio, however, it is sufficient that deliberations on a certain level of deregulation concerning the regulated capital ratio between local stations or less regulated levels in comparison with the regulated level, in line with the degree of local features, be introduced.
(3) Measures of media concentration

  With respect to the concept of introducing other ways to measure of media concentration(e.g., the number of viewer households, instead of limitations on the number of broadcasting stations, viewer rating, etc.), there is a risk of affecting plurality and diversity. In addition, when considering the so-called "principle of excluding cross-media ownership between radio, television and newspapers," it is vital that in-depth deliberations shall be made upon future directions without immediately introducing new, different measures.
(4) Treatment of radio broadcasting

  Basically, it is appropriate to relax regulations on radio broadcasting, as the same treatment as in the current regulatory frameworks.
(5) Treatment of newspapers

1)   With respect to the principle of excluding cross-media ownership between the three media (TV, radio and newspapers), it is appropriate to maintain the current regulatory frameworks.
2)   With regard to the capital ratio regulations, the following options are to be considered. Henceforth, it is essential to further deepen deliberations upon merits and demerits thereof.
(Option 1)   The same treatment as deregulation for others is to be imposed on newspapers.
(Option 2) Notwithstanding the deregulation for others , the current level of regulations on newspapers is to be maintained.
(6) Treatment of local public entities

  With regards regulations on capital investment by local public entities, the following options are to be considered. Henceforth, it is essential to further deepen deliberations upon merits and demerits thereof.

(Option 1)   The same treatment as deregulation for others is to be imposed on local public entities.
(Option 2) Notwithstanding the deregulation for others, the current level of regulations on local public entities is to be maintained.
(Option 3) For any broadcaster, the ratio of capital investment is to be limited to a certain ratio.
2. Satellite broadcasting
(1) Adequacy of cross-ownership of BS digital broadcasting and terrestrial broadcasting

i) When approving the cross-ownership of these media, there are risks of damaging plurality in media, affecting terrestrial local stations as local-based media, resulting in serious influence on grounds of local-based information media, and ii) it is not fully verified at present that merits of the cross-ownership can be attained by a different type of deregulation (e.g., relaxation of the regulations on capital ratio), other than the cross-ownership. For these reasons, it is inappropriate that with regard to BS digital broadcasting, cross-ownership between terrestrial broadcasting be approved.
(2) Adequacy of relaxation of the regulations on capital ratio

  From the viewpoint s of maintaining BS digital broadcasting and realizing attractive broadcasting services, while maintaining plurality in broadcasting, it is appropriate to relax the regulations on capital ratio.
(3) Practical measures for reviewing the current regulatory frameworks on BS digital broadcasting

  It is appropriate to relax the current upper limit of capital investment from "less than one-third" to "one-half or less."
3. Common matters to terrestrial and satellite broadcasting

(1) Treatment of regulations on officers

  With respect to a ban of concurrency of board members with the right of representation and full-time board members, it is vital to maintain the current scheme. As regards regulations on the ratio of concurrent part-time officers, it is acceptable that relaxation be applied according to the regulations on the ratio of concurrent board members.
(2) On continuity of broadcasting services - treatment of failed broadcasters --

  In cases where a broadcaster is in difficulty of improving business performance within the scope of the principle of excluding multiple ownership of mass media and cases where a broadcaster is in difficulty of continuing broadcasting services, it is from the viewpoint of ensuring benefits of viewers/listeners appropriate to approve application of exceptional special rules under a certain condition. In this case, considering risks of causing moral hazards from easy application of the special rules for the reason of difficulty in business management, it is necessary to deliberate upon appropriate conditions for limiting application of the special rules. Meanwhile, as for content of the special rules, it is appropriate to approve drastic relaxation for ensuring continuity of broadcasting services. In parallel, it is vital to hold a review on the special rules.
(3) Need to review according to changes in situation

  Environments, such as deployment of broadband platforms and development in digitalization, surrounding the broadcasting field will change drastically. Thus, upon deliberations upon the desirable principle of excluding multiple ownership of mass media, it is appropriate to take into consideration five-year time period for the time being.
IV. Matters to be deliberated upon other than the "principle of media ownership rule"

1. Concept of broadcasting

  There are two viewpoints for deliberating upon "broadcasting" as a legal concept, namely, i) rationality of concept of broadcasting as a term for defining object of disciplines concerning broadcasting media, and ii) rationality as a meaning of whether the concept of broadcasting effectively functions under the Copyright Law, etc. At the same time, the term "broadcasting" is used as a concept in legal schemes of foreign countries and international conventions, etc. Thus, the viewpoint of international harmonization shall be taken into consideration.

  The first approach to define the concept of broadcasting is the method of diversifying disciplines in accordance with uniqueness of each broadcasting media as an element comprising a broader concept of "broadcasting," as done in the past.

  The second approach is, as a theoretical possible method of i) monitoring the entire broadcasting media, ii) organizing anticipated roles of individual media, and iii) coordinating and combining, in response to the anticipated roles, disciplines for each broadcasting media from the comprehensive viewpoints.

  The third approach is a method of limiting the concept of broadcasting in comparison with the current scheme. Even so, in cases where this third approach is employed, there arise problems that a new regulatory category between broadcasting and communications shall be forcedly introduced and that whether the redefined concept of broadcasting will function under other legal schemes including the Copyright Law. Furthermore, with respect to the concept of broadcasting, even though the concept is broadly or narrowly defined in foreign countries, consistency and harmonization with the concept as loosely defined in foreign countries cannot be ignored. Considering these points, when the third approach is employed for use in harmony with today's domestic and foreign legal frameworks, the third approach may, upon operation of the first approach, be positioned as a policy stance responding to introduction of multimedia and deregulation policy measures.
2. On Japan broadcasting corporation (NHK)'s business operations (following up the First Report)

  NHK is a special juridical person established for the public welfare under the provisions of the Broadcast Law and financed with the reception fee system. Thus, with respect to desirable organization, etc. considering its raison d'etre, NHK is required to examine itself on a regular basis, disclose information thereof and make efforts to improve its business operations.

  Accordingly, NHK shall thoroughly implement various measures in conformance with the First Report, ensure appropriateness and transparency in business operations, improve accountability and continuously make efforts to provide abundant and high quality broadcast programs with the public, through efforts to utilize and improve frameworks developed anew by NHK itself.
3. On local community-based broadcasting and broadcasting networks

  Private broadcasters based on local communities are expected to i) play the role of local-based information transmission media, ii) respond to requests from residents in the local communities through their broadcasts, and iii) meet demands of the local communities concerning broadcasting.

  Roles of terrestrial broadcasting as local-based information transmission media, basically, shall be played through their voluntary efforts by themselves. Considering severe business environments, in addition to efforts of each private broadcaster to ensure their originally produced programming, it may be meaningful to deliberate upon new supplemental methods for ensuring local features.

  As one of measures for ensuring local features, a method to utilize the existing broadcasting networks may be considered. For instance, it is a method that each network sets forth their own targets conducive to improvement of program production with the local features of local stations, announce the targets, and each key station supports local stations for realizing the targets. In addition, broadcasting networks shall be focused not only on the aspect of nationwide broadcasting means based on the relationship between a key station and local stations, but also on smaller scale network structures such as joint production among local stations. Such methods shall be made the most and encouraged. It is considered useful to support the voluntary efforts of private broadcasters.
4. On public scheme for production/distribution of broadcast programming

  Broadcasters are seen playing a social role in providing high-quality content (broadcast programming) involving some public aspects making use of the functions of broadcasting. In order to enhance production/distribution of high-quality content involving some public aspects, in principle, voluntary efforts of private broadcasters are expected. It is worth creating certain kind of schemes for supporting production/distribution of high-quality content involving some public aspects.

  As one of such methods, the establishment of funds like the Public Service Broadcasting Fund proposed by A. Peacock of the U.K. may be taken into consideration. Through competition among broadcasters for obtaining support from the funds, the broadcasters as a result would be allowed to provide abundant quality programming using the support. This will lead to improvement in quality of programming as a whole. With respect to the creation of a "fund," for example, a scheme under which public organizations or private broadcasters pool funds for subsidization might be considered.