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Rumor: SARFT Releases New IPTV Regulations

Lmtw.com CEO Sina Blog, 6/27/12

Zhang Yanxiang, CEO of Chinese media news portal Lmtw.com, stated on his Sina Weibo microblog account recently that the State Administration of Radio, Film and Television (SARFT) has released a "Memorandum Regarding Issues in IPTV Integrated Broadcast and Control Platform Development."

According to the Memorandum, all centralized integrated IPTV broadcast and control platforms and sub-platforms, national- and provincial-level IPTV content service platforms, and IPTV transmission service enterprises must possess the relevant "Audiovisual Programming Dissemination Permit for Information Networks" from SARFT. Enterprises in these fields may only develop services after applying for and receiving the permit in question.

China Central Television (CCTV) holds a license for a centralized integrated IPTV broadcast and control platform; licenses for integrated IPTV broadcast and control sub-platforms will be applied for by provincial-level stations. National IPTV content service platform licenses are held by central-level radio and television organizations and may be applied for by provincial-level radio and television organizations possessing national-level programming resources, while provincial-level IPTV content service platform licenses may be applied for by radio and television organizations possessing programming resources for their own provinces. IPTV transmission service licenses may be applied for from SARFT by China Telecom (NYSE: CHA; 0728.HK) and China Unicom (NYSE: CHU; 0762.HK; 600050.SH).

In addition: IPTV transmission enterprises may provide programming and Electronic Program Guide (EPG) entries to integrated IPTV broadcast and control platforms for addition to the platforms' programming resources and EPGs following review by the platform.

As explained by Zhang Yanxiang, the new policy essentially means that:

1) Existing integrated IPTV licenses have reached "end of mission" following the merger of CCTV and Shanghai Media Group IPTV subsidiary Shanghai BesTV New Media's (600637.SH) broadcast and control platforms. They will be replaced by the new categories of licenses listed above.

2) The responsibilities of centralized broadcast and control platforms will primarily lie in the areas of management, planning, and unified design, such as EPGs, BOSS, and rights management, while sub-platforms' responsibilities will be centered more on specific operations, service development, services, and connections with operators.

3) Central-level television stations and satellite TV stations will likely be the recipients of national-level IPTV content service platform licenses. The aim of this category of license is to clearly stipulate that IPTV content be chiefly provided over broadcast systems.

4) IPTV transmission service licenses are a new category. Strictly speaking, Zhang said, SARFT should not have authorization to issue transmission service licenses. Zhang speculated that the new category of licenses was established as a bargaining chip for future reciprocity with respect to telecommunications operator entry.

Keywords: China Telecom China Unicom Shanghai Media Group IPTV regulation telecom television CCTV SARFT BesTV EPG 0728.HK 0762.HK 600050.SH 600637.SH CHA CHU Zhang Yanxiang

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The information contained in this newsletter is based upon sources that Marbridge Consulting believes to be reliable, and we have made every effort to translate the original articles or article excerpts as faithfully as possible. However, Marbridge Consulting makes no warranty of and assumes no legal responsibility for the accuracy of either the original source material or the English language translations.

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