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Summary:

1. Eastern Multimedia Co., Ltd. (Eastern) acquired, through direct and indirect means, more than 50% of shares issued in Northern Taoyuan Cable Television Co., Ltd., (NTC) thus gaining operational control over NTC and the authority to employ personnel, thereby constituting a merger as defined in Articles 6(1)(ii) and 6(1)(v). The acquired enterprise, NTC, was approved as a cable TV services provider by the Government Information Office and formally began broadcasting on 1 March 2000. NTC was approved to provide cable TV services in the northern Taoyuan County area, including Taoyuan City, Pateh City, Luchu Hsiang, Tayuan Hsiang and Kueishan Hsiang. It had 73,149 subscribers, or about 46.24% of the total 157, 563 households in its operating area. Consequently, as its market share in its operating area was greater than one-quarter, the acquisition of NTC was governed by Article 11(1)(ii) 2 of the Fair Trade Law and should be reported.

2. Assessment of the economic benefits of the merger: The development of the cable TV industry is a capital- and technology-intensive endeavor. Following the merger, the company planned to bring in capital and technology supplied by foreign professional organizations, which would be beneficial in strengthening its business structure, raising the technological level and economic efficiency of the industry and effectively lower operating costs and risks. In the event that operating costs could be reduced, the company could devote more resources toward improving the quality of its existing network and completing subscriber connection upgrades, thus providing consumers with the best picture quality and more complete information services, which would in turn be beneficial for the future development of cable and broadcast television industry.

3. Assessment of the detrimental impact of restricted competition in the cable TV systems market brought about by this merger: Pei Chien Cable Television Co., Ltd. was competing with NTC for cable TV subscribers in the northern Taoyuan area. Following the meregr of Eastern and NTC, Eastern would have received approval for combining with 13 cable TV service providers with a total of 949,412 subscribers, 25.27% of subscribing households nationwide, or 20.63% of cable TV system operators nationwide. As those figures did not exceed one-third of total subscribing households nationwide or one-third of cable TV systems operators nationwide, in accordance with the provisions of the "Explanation of the Fair Trade Law Standards With Regard to Cable Television-Relevant Business Enterprises" there would have been no obvious restrictions on the competitive function in the cable television systems market following the merger.

4. Assessment of the detrimental impact of restrictions on competition in the market for cable TV program supply caused by this merger: Eastern and its affiliated enterprises self-produced or acted as agents for a total of 14 satellite channels, or less than one-quarter of the channels that could have been used by NTC (according to a previous FTC case, in the event that the bandwidth of a cable television system operator's network is 550 Mhz, that operator could accommodate 75 channels; where an operator's network utilizes an HFC (hybrid fiber/coax) network, however, that operator's bandwidth could reach 750 Mhz, enough to accommodate 120 channels). Additionally, Eastern's market share at the cable TV program supply market accounted for just 12.84%. Also, its self-produced programs or the satellite programs it transmitted as a sale agent all competed with other substantively similar channels; thus it is difficult to maintain that Eastern held an irreplaceable position in the market. There would therefore be no obvious detrimental impact on the competitive function in the market for cable channel program supply following the merger.

5. Summarizing the above, it was concluded that there would be no obvious negative impact on the cable TV systems market or the market for cable channel program supply following the merger, and overall it would bring the positive economic benefit that would assist the future development of cable and broadcast television industry. As the overall economic benefit outweighed any potential restrictions on competition, then in accordance with the provisions of Article 12 of the Fair Trade Law, the FTC neither intended to prohibit the merger, nor did it decide to oppose the merger or issue any notice to the reporting enterprise to delay or hasten the merger.

Appendix:

Eastern Multimedia Co., Ltd.'s Uniform Invoice Number: 89396814

Summarized by Liu, Chi-Jung; Supervised by Lee, Wing-Show