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ducting business and licensing and established a body to regulate the industry. Cable television companies were already providing a retransmission service known as narrowband cable.

The introduction of broadband Cable, essentially a full service multichannel television service, in 1995 defines the old order-a true multichannel monopoly cable service that was not based on retransmission from broadcast networks. Cable television was seen as a tool to advance the creation of an information society and to cope with the spill-over of foreign satellites from Japan, Hong Kong, and Mainland China.

The old order in South Korea was characterized by 3 distinct decisions: It was viewed as a separate entity from the previous narrowband service; it was a unique tripartite system in which vertical integration between program providers, cable operators, and network builders was prohibited. Also Ownership by the large Korean conglomerates (chaebols), by foreign corporations, and by more than one business was also prohibited. Content was subject to strict regulation, which barred the operators from producing news programs and enforced a 'must carry' requirement for terrestrial channels and all licensed program providers. Licensing for program providers explicitly stipulated the genre of programming they were required to carry and their target audience.

In Israel, telecommunications law created a regulatory body-the Cable Broadcasting Council and a legal framework for licensing. Its introduction came in direct response to the rise of illegal local cable systems, which provided low quality and illegal content from primitive neighbourhood-based distribution facilities that were often run by organized crime groups. Cable was envisioned and designed initially as a local community television service providing local content through 31 regional franchises. The reason behind allowing franchise was to provide alternative to over-the-air broadcasts from neighbouring countries.

The law in Israel mandated that local franchises provide content through 'full vertical integration'. Cable operators were prohibited from broadcasting or producing anything beyond local news programming as well as from carrying advertising. No policy existed regarding the creation of independent programming, but there were regulations that dictated program genres.

Prices were set initially by the regulators in both the countries.

The South Korean MPI approved a monthly fee of 15,000 Won (US $12.50) for multichannel cable television's 27 channels in 1994. It regulated channel offerings through system operators to guarantee more choice for subscribers and to promote the financial stability of the networks.

In Israel, subscribers paid cable rates of NIS 95 per month (approximately US $32).

In South Korea, acute competition with narrowband cable, relatively high costs, poor quality service, and the absence of tiering were seen as obstacles to the earlier diffusion of broadband cable.

Nonpaying viewers accounted for two-thirds of the total number of broadband cable subscribers in 1997 for two reasons: MPI forced broadband cable companies to acquire subscribers rapidly, Narrowband cable companies selling illegal multichannel services at low prices forced the broadband cable companies to offer their own services cheaply at the introductory stage.

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