"Today, while more than 260 million homes in Asia are wired," explained Medeiros, "there is a growing digital divide." The Asian pay TV industry, he said, generates US$53 billion annually and the sector is growing at 11 percent per year. Only 10 percent of pay TV homes get digital signals; there are wide variations across the region, from 100 percent in Hong Kong to 2.9 percent in India.

"Our industry can make a strong contribution to development goals, but a positive regulatory framework is necessary," said Medeiros, before discussing the group's recently published "Regulating for Growth," which outlines CASBAA's goals.

The report, he said, examines Asian regulatory practices from an industry point of view, comparing regulatory regimes and industry revenue and investment data. "Does effective regulation generate growth?" he asked. "What is the effect of the regulatory environment on digital development?"

There are, he added, huge benefits from a growing TV industry, which makes a large economic contribution, stimulating associated industry and driving digital development. "A strong pay TV market," stressed Medeiros, "will stimulate investment and unlock value. With voice and broadband data, pay TV pulls investment in digital infrastructure."

Pointing to average compound annual growth rates (2003-2006) in monthly cable fees, Medeiros observed that these have risen 14.2 percent in Australia, 10.1 percent in China and 6 percent in the UK, but only 0.4 percent in Taiwan.

"This shows rather starkly how out of step Taiwan has been," said Medeiros. "Now, some people would look at this and say, 'hey, great, we paid the least.' You know, however, that consumers, even the shrewd housewives of Taiwan, do not just look at price; they also focus on value. Taiwanese consumers pay little, but get little value."

Digitization of pay TV is important, said Medeiros, as it caters to specialty and niche content, such as high-definition TV, new genres and public affairs. It also promotes content creation industries, permitting a variety of packages for all tastes, while creating jobs. "Ultimately," emphasized Medeiros, "it gives consumers the power of choice."

Personalized TV and on-demand services are generating new business and enhancing the economic contribution of the industry. "This also leads to support of ancillary industries, causing tax revenues to rise, while protecting the value chain. It ensures that the creators benefit as it limits the scope and scale of revenue losses from piracy." This is especially important, he continued, for smaller language and cultural communities.

Based on the findings of the study, Medeiros concluded that effective regulation is directly related to growth and development in this sector. "Governments that adopt wise policies spur competition, increase consumer choice and attract substantial investments to a key pillar of the digital economy."CASBAA's Regulatory Regime Index, explained Medeiros, evaluates 10 specific criteria from an industry perspective, offering a simple way to represent complex situations. "There is no perfection in the regulatory world," said Medeiros. "Every system has its weak points, but there are major leagues... and little leagues."

He then outlined CASBAA's 10 criteria as follows: no investment limits, level playing field, no program distribution limits or cartels, no restrictive rate regulation, no constraints on packaging (tiering), no unreasonable restrictions on advertising, no onerous content controls and no program supply restrictions. The others are real copyright protection and a transparent, independent, efficient regulator.

Taiwan's strengths, based on these points include an open, free, diverse media, and an approach to content regulation that is generally reasonable. In addition, there is freedom to contract and the island is open to investment from abroad (within limits).

Taiwan's weaknesses are that it possesses Asia's most regressive rate regulation as well as excessive regulatory interference in packaging and tiering. Other drawbacks are the outdated utility mindset that points the market at lowest common denominator and the skewed playing field.

"The root of the problem," said Medeiros, "is philosophical. Taiwan is regulating pay TV as if it were a public monopoly. This contrasts with dynamic change elsewhere. Markets with the strongest growth and investment have moved away from the utility mindset; they allow competing channels of distribution and, accordingly, have seen an explosion in investment."

His and CASBAA's recommendations to regulators in Taiwan are to balance needs of producers and consumers, while explicitly embracing long-term goals that give freer rein to competition and allow competitors to build creative package offerings. "Regulators on the island need to find mechanisms to incorporate industry expertise in regulation, while building bipartisanship. The goal should be to create a thriving market for Taiwan, not position partisan interests."