MBN to Suspend Broadcasting for Six Months Starting May Next Year... Avoids License Revocation (Comprehensive)

[Asia Economy Reporter Seulgina Jo] The comprehensive programming channel MBN (Maeil Broadcasting Network), which violated the Broadcasting Act by illicitly covering capital, has been ordered to suspend operations for six months starting from May next year. It avoided the worst-case scenario of license cancellation. However, in the fiercely competitive comprehensive programming market, a six-month complete broadcast suspension is considered a punishment as severe as license cancellation. MBN is also facing a re-approval review next month as its current license expires.

The Korea Communications Commission (KCC) held a plenary meeting at the Government Complex Gwacheon on the afternoon of the 30th and decided on this administrative sanction level against MBN, which was initially approved in 2011 and re-approved in 2014 and 2017 by deceptive or other fraudulent means such as illicit capital coverage.

Six-month suspension order... applies from May next year if re-approved in November

The KCC stated, "According to Article 18 of the Broadcasting Act and Article 17 of its Enforcement Decree, a six-month full suspension of broadcasting operations has been decided. However, to minimize damage to viewers and partner companies such as external production companies, the sanction will be deferred for six months from the date MBN is notified of the administrative sanction."

According to the KCC, at the time of the launch of comprehensive programming channels in 2011, MBN used nominee shareholders among executives and employees to pay part of the paid-in capital (395 billion KRW) with company funds and submitted false documents during the initial approval process, thereby deceiving the government and engaging in acts recognized as fraudulent by social norms to obtain approval as a comprehensive programming channel. During the re-approvals in 2014 and 2017, MBN again submitted false shareholder lists and financial statements to secure re-approval as a comprehensive programming channel.

The KCC judged that these illegal acts constitute obtaining approval and re-approval by false or other fraudulent means under Article 18 of the Broadcasting Act.

Kim Hyun, Vice Chairman of the KCC, said, "MBN is a broadcasting operator that should be based on public trust and has the duty to expose and monitor illegal acts and corruption in society. All standing commissioners of the KCC agreed that there must be strict punishment according to the law for MBN committing illegal acts during the comprehensive programming channel approval process."

[Image source=Yonhap News]

If MBN passes the re-approval review scheduled for next month, the suspension order will be applied from May 2021. However, since this is an unprecedented case, specific decisions have not yet been made on whether MBN's broadcast channel will go black, whether MBN can refrain from airing self-produced programs and upload them on platforms like YouTube, or how OTT supply will be handled. Vice Chairman Kim responded, "We have not yet specifically notified MBN. We need to see how MBN will respond once notified." It is also possible that MBN may file a lawsuit against the administrative sanction. In that case, the suspension will be decided by a future court ruling.

The KCC recommended that MBN notify viewers of the suspension via broadcast subtitles and its homepage to prevent infringement of viewer rights and broadcast a suspension video informing about the broadcast interruption. Additionally, MBN was instructed to prepare a management innovation plan including protection of partner companies such as external production companies, employment stability measures, disciplinary plans for executives involved in illegal acts, and institutional measures to ensure management transparency.

Furthermore, the KCC recommended that MBN establish a capital increase plan to restore the capital reduced by the cancellation of nominee shares corresponding to treasury stock in 2020, so that the full capital of 395 billion KRW promised at the initial approval can be properly paid.

Moreover, the KCC decided to file criminal charges against MBN and the representatives at the time of the violations under Article 105 (Penalties) of the Broadcasting Act and Article 137 (Obstruction of Official Duties by Deception) of the Criminal Act.

Opposition-recommended standing commissioner also proposed 'suspension during early morning hours'

The KCC explained that the final decision of a six-month suspension took into account MBN’s 26 years of broadcasting operations, concerns about damage to partner companies and viewers, employment issues, and applied mitigating reasons under the Enforcement Decree of the Broadcasting Act.

During the plenary meeting starting at 2 p.m., KCC commissioners were sharply divided over two proposals from the secretariat: license cancellation and six months full or partial suspension. Kim Chang-ryong, a ruling party-appointed standing commissioner, initially advocated license cancellation but later changed his opinion to six months full suspension. Vice Chairman Kim Hyun also supported six months full suspension. On the other hand, opposition-appointed commissioners Kim Hyo-jae proposed partial suspension, and Ahn Hyung-hwan suggested suspension during early morning hours excluding prime viewing times.

With no consensus reached, KCC Chairman Han Sang-hyuk voted for six months full suspension, concluding the decision by vote. Chairman Han said, "Although six months full suspension is a severe sanction, I do not think it has the same effect as license cancellation. The re-approval and re-licensing procedures for terrestrial and comprehensive programming channels will proceed, and I ask for thorough reviews to prevent recurrence of such incidents."

With this decision, MBN narrowly avoided license cancellation. However, the industry expects significant operational damage as the entire broadcast will be suspended. Advertising revenue will be cut off immediately during the six-month halt. The drama and entertainment production environment, already strained by COVID-19, will be hit hard. Most painfully, the channel’s continuity and credibility have plummeted.

The KCC plans to proceed with the re-approval reviews for MBN and JTBC, whose licenses expire on the 30th of next month, as scheduled. The re-approval decision will be made in November. The KCC stated, "We will strictly operate the licensing and approval system for broadcasters according to laws and principles to prevent illegal acts during the licensing and approval process."

Earlier, MBN issued a public apology, stating, "We deeply reflect on this incident occurring at a broadcaster whose lifeblood is public interest and sincerely apologize to the public."

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