The battle between the State Administration of Radio, Film and Television (SARFT) and the Ministry of Industry and Information Technology (MIIT) over the convergence of the three networks is becoming increasingly intense.
Recently, SARFT issued an internal notice to local radio and television bureaus, halting the provision of audio-visual program services to TV terminals via Internet-connected set-top boxes and DVD players.
In response, Dennis Deng, Deputy General Manager of Bestv's Internet TV Division, told the China Times in an exclusive interview that this was not a new regulation, as relevant rules had existed for a long time. It was merely a reiteration of these rules.
The focus of this recent regulation was on the TV versions launched through cooperation between some video websites and set-top box manufacturers or TV manufacturers, according to sources within the radio and television industry.
According to the journalist's understanding, there are roughly two ways of providing audio-visual programs to TVs via set-top boxes or DVDs: one is the IPTV model promoted by Shanghai Media Group Bestv, which holds an IPTV license, in collaboration with China Telecom and China Unicom in some cities; the other involves some video websites cooperating with TV manufacturers to transmit video content through smart TVs, networked DVDs, or set-top boxes.
An unnamed senior executive of a radio and television enterprise told the China Times that in Shenzhen, many set-top box manufacturers were dealing with the issue of content, often randomly selecting websites without considering whether they agreed. Many DVD manufacturers have also started producing internet-capable DVD or Blu-ray players. The regulatory focus should be here, and it has little to do with IPTV.
According to the journalist's understanding, SARFT and telecoms are currently at an impasse. If SARFT wants to build its own IPTV return channel, it would no longer be about the convergence of the three networks. This regulation on Internet set-top boxes sends a message to telecoms that illegal network set-top boxes and DVDs can be cleared in non-pilot cities in the future. To develop IPTV, platform integration must be completed.
Dennis Deng believes that regulation is not meant to extinguish but rather to organize and guide the development of the industry. This approach aims to set the direction.
A person from SARFT stated that the Department of Media Institution Management is preparing regulatory measures, but the current notice does not yet involve smart TVs.
Whether related documents will be issued and when remains uncertain, but we look forward to subsequent policies, said Dennis Deng.
The Umbrella for Terminal Manufacturers
Wu Chunyong, a radio and television expert, frankly stated in an interview with the China Times that SARFT's issuance of this document directly affects the interests of terminal manufacturers, with the greatest loss being borne by the terminals. Users buy TVs to watch content, which forces terminal manufacturers to cooperate with some video content providers.
According to SARFT's document, if unlicensed content providers collaborate with terminal manufacturers, it is considered illegal. Terminal manufacturers must then partner with licensed content operators.
Dennis Deng emphasized to the reporter, "Don't see Bestv as just a licensed entity; we are operators. The license is merely our origin or identity, which isn't something to be proud of. We are merely licensed operators."
Despite Bestv repeatedly emphasizing its operator status, this identity still makes all TV manufacturing enterprises pursue licenses.
Gao Xiongyong, Director of Haier's Internet Operation Center, once publicly stated that Haier's cooperation with Letv.com strictly adheres to SARFT's regulations on Internet TV. Moreover, their cooperation includes working with Hangzhou Huashu, which holds a license. SARFT's recent notice should target the large number of directly internet-connected set-top boxes or DVDs appearing in places like Shenzhen.
Huan Network Technology, jointly funded by TCL and Changhong, has obtained legal status through its cooperation with Huashu Media.
Regarding SARFT's recent notice, Wu Shenggang, CEO of Huan Network Technology, declined to comment due to sensitivity.
It is understood that before the issuance of Internet TV licenses, Huan Network had already established a business relationship with Huashu. In July 2010, Huan Network and Huashu formed a joint venture called Huashu Visionlink. According to national regulations, audio-visual content is integrated and broadcast-controlled by the Huashu platform, pioneering the legal operation of internet audio-visual content for Changhong and TCL.
Radio and television expert Wu Chunyong told the journalist that Huan Network is a special case, combining the interests of both radio and television and terminal manufacturers. The integration and broadcast control platform is the most crucial part; who produces the content is secondary. As long as the platform is legal, SARFT can control the content. Terminal enterprises need legitimate protection.
Responsibility Behind the Interest Struggle
Some industry experts pointed out that SARFT's issuance of documents to local radio and television bureaus aims to accelerate the progress of the convergence of the three networks and exert pressure on telecommunications operators that have been slow to integrate with the SARFT IPTV broadcast control platform.
Fu Fengchun, Chief Engineer of Shenzhen Radio and Television Group and a member of the expert group on the convergence of the three networks, confirmed to the China Times that the results so far have not been ideal. The IPTV integration and broadcast control platform created by SARFT following the pilot plan has not successfully achieved full integration with telecommunications, thus showing no significant progress.
TV manufacturers are under the jurisdiction of MIIT, while video content falls under the management of the radio and television system. Once either side gives in, it will inevitably lead to a disadvantage in the power struggle, according to the aforementioned industry expert.
Wu Chunyong believed that the significance of SARFT's issuance lies in its stance, but the actual effects remain uncertain. Due to profit-driven motives, it is difficult to completely eliminate gray areas.
According to the journalist's understanding, the technical aspects of the convergence of the three networks in Beijing have been resolved. Last year, a network platform for the convergence of the three networks was built in Shijingshan District, with participation from four operators (Mobile, Unicom, Telecom, Gehua). What remains is how to coordinate the roles of SARFT and telecoms. According to the current design plan, Beijing is expected to launch IPTV as early as October.
Dennis Deng analyzed for the China Times that the two ministries are currently not opening up their rights because behind the rights lies responsibility. On the surface, it seems that SARFT and MIIT are competing, but when obtaining rights, they must also bear the corresponding responsibilities, which are intangible.
The conflict between the two will eventually be reconciled, it’s just a matter of time. China's market is large enough. Whether for IPTV, smart TVs, analog TVs, or digital TVs, there is room for development. It's not an either-or situation but rather about expanding the industry so that all parties benefit in the end, Dennis Deng told the journalist.