Is the Cable TV Industry's Long-Awaited Wish Delayed Again?... Uncertainty Over Reduction in Development Fund Collection Rate

With only four months remaining before the imposition of the Broadcasting and Communications Development Fund (hereafter, the Fund), there is a growing possibility that the long-awaited reduction in the collection rate for cable TV operators will be postponed once again. This is because the Broadcasting Media and Communications Committee (hereafter, the Committee) is prioritizing follow-up measures for the so-called "three broadcasting laws," and since the relevant matter has been transferred from the Ministry of Science and ICT, a reassessment is being considered.

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According to industry sources on April 17, the Committee is currently reviewing the proposal to lower the Fund collection rate for cable TV operators. This proposal, which would reduce the collection rate for pay TV operators from the current 1.5% to 1.3%, had been virtually finalized by the previous supervising ministry, the Ministry of Science and ICT. However, after the Committee took over the work in October last year, progress stalled due to difficulties in forming the committee. At the first full committee meeting held on April 10-the first in six years-this issue was not given priority for resolution.

The Committee, which is currently focused on follow-up measures for the "three broadcasting laws," maintains that it will carefully review the proposal, taking into account the opinions of other operators as well. This has led to expectations that the issue may be delayed until next year. Although a revision of the notice does not require passage by the National Assembly, it will still take three to four months to coordinate with the Ministry of Economy and Finance, the Ministry of Government Legislation, and other relevant agencies after a resolution is passed at a full committee meeting. Therefore, swift action is needed if the decision is to be finalized by the end of August.

The problem is that some operators are already unable to pay the Fund. In 2024, the cable TV industry paid 23.9 billion won into the Fund, which exceeds its total operating profit for the year (14.8 billion won). Furthermore, the number of pay TV subscribers began declining for the first time in the first half of 2024 and continues to decrease, leading to worsening profits and restructuring. LG HelloVision, the industry leader, carried out its second voluntary retirement program since its founding in October last year, following another round at the end of 2024. SK Broadband also responded to the market downturn by conducting two voluntary retirements in the same year. Industry insiders emphasize that with operating margins now below 1%, prompt action by the government is urgently needed. One source stated, "Since the Ministry of Science and ICT has already completed its review, we hope the matter will be resolved quickly."

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