Ministry of Science and ICT: "CJ ENM-D'Live Agreement Fails, 'Dispute Arbitration Procedure' Initiated"

[Asia Economy Reporter Seulgina Jo] The Ministry of Science and ICT announced on the 1st that it will initiate dispute arbitration procedures as CJ ENM and cable TV operator D'Live, who have been in conflict over program usage fees, have failed to reach a final agreement.

For this arbitration, the Ministry of Science and ICT will form and operate a dispute arbitration committee composed of experts from various fields. After reviewing documents and hearing opinions on the proposals submitted by both parties, the final arbitration plan is expected to be confirmed in September. However, even before the arbitration plan is finalized, if the two parties reach an agreement, that agreement will be given priority.

The two companies failed to reach a voluntary negotiation by the deadline for written negotiations, which was the previous day. CJ ENM and D'Live have continued to clash over the rate and calculation method of program usage fee increases. Following D'Live's rejection of CJ ENM's 20% increase request in March, the conflict escalated to CJ ENM's blackout announcement in July of the same year.

In response, the Ministry of Science and ICT directly intervened in July, and the two companies agreed to ▲ conduct negotiations for a smooth agreement by August 31, and ▲ if no written agreement is reached by the deadline, to abide by the government’s arbitration plan. Program usage fees refer to the reception fees paid by comprehensive cable TV operators (SOs) to channel providers (PPs) who supply channels.

Although about a month of voluntary negotiations ended in failure, the feared blackout did not occur. The agreement at that time included a provision for D'Live to continue broadcasting CJ ENM’s channels during the negotiation period. Also, since both parties agreed to accept the government’s arbitration plan, the possibility of this issue escalating into a legal dispute is virtually nonexistent.

The key issue is whether the Ministry of Science and ICT’s arbitration plan can find a level acceptable to both sides. After months of heated conflict, both companies need justification to accept the arbitration plan on the government’s established framework. It is also crucial which side’s position will be favored if the increase rate is decided below the 20% claimed by CJ ENM. Both parties agree on increasing the program usage fee but still have significant differences regarding the specific increase rate.

CJ ENM and D'Live plan to continue consultations until the government’s arbitration plan is prepared.

This content was produced with the assistance of AI translation services.