Repair flaws to strictly monitor foreign investment in broadcasting

Broadcasting is important infrastructure that uses radio waves, a common property of the people. An effective mechanism should be established to prevent foreign capital from exercising influence in this field.

An expert panel of the Internal Affairs and Communications Ministry began discussions in the middle of this month to review regulations on foreign investment in the broadcasting and telecommunications sectors. The ministry plans to submit relevant bills to the Diet next year, including revisions to the Broadcasting Law.

The current law limits the voting rights of foreign investors to less than 20% of the total and it also stipulates that if their voting rights reach 20% or more, the licenses or certifications of companies in which they invest must be revoked.

This spring, it was discovered in succession that broadcasting-related company Tohokushinsha Film Corp. and Fuji Media Holdings, Inc., which has Fuji Television Network, Inc. under its umbrella, had been in violation of the law, as foreign capital had accounted for more than 20% of their totals in the past.

In both cases, the government failed to properly check the companies. It is only natural to revise the screening system.

In May this year, the ministry revoked the approval for satellite broadcasting that it had granted to a subsidiary of Tohokushinsha. The ministry cited the fact that Tohokushinsha had a foreign investment ratio of more than 20% as of January 2017, when it received the approval.

In contrast, Fuji Media was only given a strict warning because the ministry said that the violation had been resolved by the time it was reported to the ministry. Not only is the treatment of the two companies unequal, but if the situation continues, businesses can avoid revocations by deliberately delaying a report.

The flaws in the system are obvious.

Under the current system, an operator only has to self-report the percentage of voting rights when applying for approval to engage in broadcasting, and there is no mechanism in place for the ministry to confirm this. There appears to be no framework for inspection after approval is granted.

The ministry plans to establish a new section to exclusively check the matter and have operators report their foreign investment ratio on a regular basis. It is necessary to establish a strict monitoring system.

The companies said that the violations were the result of miscalculations. It would be more realistic to administer punishment in the form of a correction recommendation or a correction order, rather than a revocation for minor violations to encourage reporting.

The ministry’s lack of transparency in handling Tohokushinsha’s violation of foreign investment regulations has also been called into question. The company claims it reported the violation to the ministry in August 2017. The communications ministry is suspected of not revoking the approval even though it knew about the violation.

However, the head of the section in charge at the ministry at the time stated in the Diet, “I don’t remember,” indicating a contradictory stance. If the issue is left unclear, distrust in the administration will only grow. The ministry should clarify the facts in the case and work to restore trust.

— The original Japanese article appeared in The Yomiuri Shimbun on June 27, 2021.