Laws of the People's Republic of China

DIRECTIVE ON REINFORCING THE MANAGEMENT AND CONSTRUCTION
Of RADIO AND CABLE TV NETWORKS

Submitted by the Ministry of Information Industry and State Administration of Radio,
Film and TV (SARFT) to the State Council on September 13,
andwere approved on September 17.

Opinions On Reinforcing The Management And Construction Of Radio And TV Cable Networks

Radio and TV transmission networks have developed in our country for nearly 50 years. Shortly after the founding of the People's Republic of China, we began to develop radio networks. In the early 1980s, we began to develop cable TV. In the 1990s, the construction of radio and cable TV networks entered a phase of rapid development.

So far, we have completed the construction of approximately 2.25 million km (1.4 mln miles) of cable TV transmission networks. Since 1992, the number of subscribers for cable TV has been increasing by 10 million annually. By December 1998, there were over 77 million cable TV subscribers in the whole country, ranking first in the world. Radio, TV and their transmission networks have become crucial to the modernization of China's information industry.

In order to guarantee the safe broadcasting of radio and TV programs and avoid redundant construction of cable transmission networks, we hereby put forward the following opinions on reinforcing the management and construction of radio and TV cable networks:

I. Redundant Construction Should Be Prevented

"The Notice from the General Office of the State Council on Reinforcing the Management and Construction of Radio and TV Cable Transmission Networks" and other relevant regulations should be firmly implemented.

With consideration given to the actual situation of radio and TV departments, specific and effective measures should be formulated, and the separation of the government and enterprises engaged in the construction and management of radio and TV transmission networks should be implemented firmly.

Enterprises for radio and TV transmission should be established, and should accept the overall planning and administration of the government department in charge of the information industry. Proposals for construction that would lead to redundancy should be rejected.

State Council instructions that existing telecom networks be fully utilized, and that radio and TV departments be allowed to construct networks for connecting cable TV to private households, should be followed. The construction of radio and TV cable networks can be divided into the following two categories.

The first category refers to the optic fiber trunk lines for radio and TV transmission from the central government to the county level. In principle, those that have not been established by the radio and TV department shall not be built.

The national telecommunications core networks and other established networks should be fully utilized in various ways, and redundant construction must be avoided. If establishment is essential, the networks must accord with national planning for information industry modernization and must be approved by the government department in charge of the information industry.

The second category refers to radio and TV distribution networks under the administrative level of urban districts and rural counties. The radio and TV departments should form relatively complete special networks so as to adapt to the special requirements of managing radio and TV programs and attracting subscribers.

The new construction of the portion of distribution networks beyond public access points must be planned and approved by the government department in charge of the information industry. The construction of the public access portion of the distribution networks should be arranged by radio and TV stations according to the need to attract subscribers.

II. The Safe Transmission Of Radio And TV Programs Should Be Guaranteed

With technological development, radio and TV have become the most popular mass media with their own technological advantages, and they are important channels for public opinion and propaganda. The management of radio and TV transmission networks should consider particular needs. After China has further opened to the outside world, guaranteeing the safe transmission of radio and TV programs should also be a priority.

Therefore, when stipulating the establishment of radio and TV transmission network companies in the formulation of overall plans for radio and TV transmission networks and unified technical standards, necessary conditions should be provided for the firm and effective management of radio and TV propaganda.

It must be further clarified that the establishment of cable TV channels and online broadcasts, and the operation of radio and TV program transmission services must be approved by the government department in charge of the information industry.

1. Enterprises for radio and TV network transmission should be established. In accordance with central government instructions on consolidating related organizations during reform of the radio and TV sector, companies should be established on the basis of the existing assets of radio and TV networks in each province, autonomous region and municipality directly under the central government. Prefectures (municipalities) and counties should establish branches or subsidiaries accordingly, and they should implement unified operation and management of radio and TV transmission services.

The restructuring of the assets of the national optic fiber cable trunk lines already established by SARFT will be treated as a special case, and proposals on dealing with the above shall be submitted.

There may be two ways to handle the vertical relationship of radio and TV network transmission companies. One is to establish radio and TV groups in the provinces, autonomous regions and municipalities directly under the central government, including radio and TV stations, and incorporate network transmission companies into the groups.

The other solution is to allocate the established transmission network assets of the radio and TV departments of various administrative levels to the radio and TV stations at the same levels. The radio and TV stations should then establish radio and TV network transmission companies. The network transmission companies should guarantee the same transmission of radio and TV programs according to government regulations, and cooperate appropriately with the telecom department.

Until the relevant regulations are formulated, radio and TV transmission companies will not be listed on the stock market. Those companies that need to be so listed shall apply for approval case by case. Radio and TV stations, and their broadcast business, program production and advertisement operation shall not be listed on the stock market.

2. Great efforts should be made to promote public channels. Given the policy of combining three kinds of radio and TV stations at the county level, provincial TV stations should produce one public program for broadcast by the county TV stations under its administration. Some time slots should be left open for county TV stations to broadcast the news and special programs they have produced themselves.

The merging of prefectural (municipal) and provincial radio, TV and cable TV stations should be promoted to optimize the allocation of resources and reduce internal frictions.

IV. Network Leasing Fees Should Be Reduced Substantially

Currently, the leasing fees of telecom networks are excessively high, and it is more cost-effective to establish new, redundant networks than to lease existing networks. To change the situation, reasonable leasing fees should be set as soon as possible so that organizations feel it is more cost-effective to lease networks than establish redundant networks.

V. Uphold The Jurisdictions Of Telecom And Radio And TV Departments

According to regulations, the telecom department shall not engage in radio and TV business, while the radio and TV department shall not engage in telecom business. The regulations must be upheld. Regarding the comprehensive utilization of various network resources, experiments will be carried out only in Shanghai.