09 Syed Agil Alsagoff Azizah Hamzah

WCA 2007 Conference, Brisbane, July 2007 1

MEDIA CONVERGENCE ENVIRONMENT: CONFLICTS AND CHALLENGES. THE

MALAYSIAN EXPERIENCE

Syed Agil Alsagoff

Universiti Putra Malaysia

Selangor, Malaysia

Prof. Dr. Azizah Hamzah

Universiti Malaya

Malaysia

Abstract

The popularity of the digital media and the availability of a borderless world of communication networks have

formed a new environment, supported by the Information and Communication Technologies (ICT). With this

influx of information, Malaysia is moving to the new era of knowledge creation and fast-moving competitive

edge especially in the media business sectors. This paper intends to deliver definitions of media convergence

environment technologies, which apply to the local communication and multimedia sectors. This phenomenon

has blurred the boundaries between telecommunications, broadcasting and computing industries (amidst

mergers and acquisitions), in term of roles, functions and economic scales. This new technological

environment in Malaysia has resulted in conflicts and challenges to the country, especially to the local

business sector, as it would impact economic scales and social values to the public and the sector itself, such

as crisis in the new regulatory approach and technology acceptance, clarification of the digital intellectual

property, market power, content values and diversion of cultures. This paper also identifies and examines the

key issues and problems faced by Malaysia in its attempt to proactively respond to the winds of change

breezing through media convergence technology. Thus, Malaysia has to fully maximize her strategies and

challenges to obtain maximum benefits given the advent of this technological environment.

WCA: Communication in the 21st Century: Exploring Roots; Expanding Visions


Introduction

The vast potential of information and communication innovations such as satellite and telecommunications

systems and the computer based communication network, the Internet, is indeed a blessing. However, it could

affect the social changes and development in this country (Azizah,2005). Advances in information and

communication technology, particularly the Internet have also brought about new challenges in the regulatory

regime.

The economics of information and electronic services differ significantly from the economics of physical

goods (Kelly, 1997).In the transitions from industrialized economies to ‘knowledge-based’ information

societies, the paradigm emphasis shifts from commodities and physical infrastructure to people and ideas as

the classical trade in commodities and goods is characterized by the economic of scarify and depletion

(Cutler, 1997).

However, the information economics structured in the digitalized era would concern re-using information as

a renewable resource, which would make the new economics to be most sustainable to convergence

environment and to increase returns to scale ang generate powerful first-mover advantages to provide

movement in the right market direction.

Malaysia, like any developing country, has always been very responsive to the latest developments in the

media and the Malaysia government has implemented various development plans as well as promoting human

development, especially in today’s environment of social and economic change. Malaysia has also been

particularly attentive to the rapidly changing world of information and communication technology but at the

same time is mindful of the effects of the information gap or the digital divide in the Malaysian society.

Defining Convergence

The current and future movement of modern media industry is dominated by the new economic scale

direction, the process known as “convergence”. No empirical global definition would clearly describe this

environment in the conceptual basis. Syed Hussein (1999) however explained that convergence is a process of

changes or a paradigm shift of the traditional technological development into the new services industry, which

would blur the boundaries between telecommunications, broadcasting, and computer industries. Therefore in

the converging industries, the telephone, computer, cable television, and media companies are hectic with

mergers and acquisitions.



The new term, communication media is used to describe the convergence of traditional mass media and

computer technologies (Straubhaar and LaRose, 2000). Convergence of the communications technologies

therefore means that all communications technologies are all converging into ‘common computer readable,

digital form’. In the newspaper, magazine and book publishing industries, convergence means that such

products may now be created in the digital format and may be printed in the traditional format when there is

demand for the products. The eBookman for an example is also a personal digital assistant (PDA), a reader

that can play audio books and a music player. The e-book culture is truly an amalgamation of the traditional

print format and the digital format, bringing the merging of computers, communication and knowledge

industries. The US Department of Commerce (June 2000) has reported that advances in the computer power

and connectivity have ‘produced sharp declines in the prices of computer processing, data storage and

retrieval and communications’. This has produced an upsurge in Internet activities as well as business

investments in IT hardware and software and it is clear that the phenomenon has contributed to the US

economic strength.

Cutler (1997) defines this new technological movement as values of current economic development era:

Convergence is a progressive integration of a value chain of the information and content industries –

telecommunications, posts, broadcasting, print, multimedia, electronic commerce and data processing – into a

set of linked economic markets and a single value chain based on these of distributed digital technology.

The definition focuses on the crucial aspects of the commercial dynamics at work. These are::

Convergence related to the process of market and industry restructuring; and

Convergence involving the emergence of a single value chain based on digitalization and networking.

Malaysian Media Scenario

Today, the development of this information orientation in Malaysia can be seen in many forms. The print

media has the longest history, beginning with the earliest newspaper, the Penang Gazette in 1838. Now there

are about 50 newspaper dailies and weeklies, either broadsheets or tabloids in the various languages of the

main ethnic groups in our country - Malay, English, Mandarin and Tamil.

]

The most significant mass media development in Malaysia is in the field of broadcasting, especially in radio

and television. In the 1950s the introduction of solid-state technology resulted in the proliferation of cheap



portable radio receiving sets and in 1963 the introduction of the first black and white television in Malaysia

ensured that Malaysian citizens, like all citizens of the globe, were able to receive, exchange and enjoy one

another’s messages, news, entertainment and other cultural products instantly in the comforts of their homes.

In 1996 Malaysia again joined the ranks of satellite broadcasting with the introduction of the pay TV channel

offering both Direct-to-U (DTU) television and radio broadcast services of more than 22 channels in digital

format comprising local Malay content, regional Chinese, English and Tamil content as well as a number of

global networks.

Malaysia has been reforming and restructuring the telecommunications and broadcasting sector since 1987.

The participation of the private sector in the transformation and development of the country's communication

infrastructure has ensured the necessary information infrastructures and work on wiring the country with the

necessary information infrastructure have been actively carried out for the last 10 years. Many optical fiber

cable network projects are still in the pipeline. In fact, trunk fiber networks have been laid criss-crossing

Peninsular Malaysia and stretching across the South China Sea to enter the eastern part of the country. With

Malaysia's own satellite, it is within our reach to develop infrastructure superhighways for the nation's needs.

The performance of the communications infrastructure in the country over the last decade has been

impressive.

The penetration rate for fixed lines has grown rapidly through period from 7.4 lines per 100 populations in

1987 to 22 lines in 1999. This figure represents a very high level of service penetration when compared to

other ASEAN Countries. In addition, Malaysia has one of the highest penetration rate: 10.3 per 100

population for cellular phones in Asia with subscribers amounting to approximately 3 million as at the middle

of 2000. The growth of the telecommunications industry in the country is also underpinned by demand for

new services arising from the convergence of the information technologies in the field of switching and

transmission such as ATM, ISDN and SDH has created new services like VOD, video conferencing and many

other multimedia applications on the web like graphics, audio and animation, video and virtual reality to

mention a few.

Different sources of information, ideas and entertainment, together with other media genres such as

cinematography, video, books, magazines and advertisements, make up what is known as the information and

communication media, or the mass media because of their mass appeal and pattern of consumption and

distribution. Over the past decade, we have witnessed an explosion of the media products, from the increase

of magazine titles to the number of satellite television channels and the advent of the Information Technology.

As in most countries, communications services in Malaysia have been



traditionally provided on a monopolistic basis. Several policy initiatives have been undertaken to foster

competition in the country include those that are relevant to the determination of boundaries between

competitive and monopolistic markets, licensing of new entries, monitoring performances and several

practices related to maintaining sustainable competition in the market. Competition has gradually been

introduced in many fronts including the local loop, wireless, trunk, international and value-added segments.

The key to this development trend is to enhance liberalization efforts that have been taken by the government

to allow private participation in the sector. The thrust of the competition policy as envisaged in the Equal

Access Policy is that it must lead to the improvement in the quality of service and at the same time bring

down prices as a result of improvement in operation efficiency. To ensure that Malaysia gets the maximum

value from a dynamic communications industry and that it is internationally competitive, the government

strongly feels that the country must develop a competition that could:

Encourage the provisioning of a world class communications infrastructure as the latest technology

mix to support the implementation of policy initiative related IT development i.e MSC; ·

Focus on driving the prices down and enhancing quality as well as making services widely available

and accessible to support the efforts of the government to create an information rich society; ·

Encourage technical advancements and innovations in its services to enhance the international

competitiveness of users and IT/multimedia application; ·

Support the creation of a conducive environment that is necessary to attract investments into the sector

and prevent duplications of infrastructure resources.

Malaysia’s Current Policy Setting and Scenario

The government feels that it is crucial to have clear-cut policies for this rapidly changing sector which will

influence our way of life, economy, culture, education and entertainment. A long term strategy to achieve

Vision 2020 was formulated and it is clear that the government is serious about transforming the economy

into the information age by laying a number of relevant national and industry development plans which

includes the following:

The Ninth Malaysia Plan (2005 – 2009)

The National IT Agenda

The Multimedia Super Corridor



The Seventh Malaysia Plan (1996-2000)

Under the provisions in the Seventh Malaysia Plan (1996 – 2000), the government clearly has a pro-

information orientation because in the Plan the government launched a policy of encouraging Malaysians to

use computers by allocating RM2.3 billion for IT related investments. Other pro-IT strategies are imbedded

in the following initiatives:

Establishing strategic alliances with overseas markets in order to encourage local investors to go

abroad and participate in the international commercial world

Mobilizing high domestic savings to support local investments

Introducing policies to ensure a transformation from investment-driven to productivity-driven

economy

In pursuing Vision 2020, the government is actually forging the way forward for Malaysians to be part of the

Information Society because Vision 2020 is also about an ambition to gain knowledge empowerment for the

Malaysian society. To achieve this status the government launched two key programmes, the Multimedia

Super Corridor (MSC) and the National IT Agenda, which were formulated by the National Information

Technology Council (NITC). The MSC was launched on August 1, 1996 by the Prime Minister, which

demonstrated the total commitment of the nation in trying to keep up with the exploding computer and

communications technology and providing its 23 million citizens with access to information in an equitable

manner.

The National IT Agenda (NITA)

The Malaysian government launched the country’s IT agenda in May 1993 with the establishment of the

National Information Technology Council (NITC). The main task of NITC is to assist Malaysia in her

deliberations towards achieving the status of a civil and knowledge society as stipulated in Vision 2020

(Tengku Azman, 2000) where all Malaysians will have access to information and learning. The NITC

developed Malaysia’s National IT Agenda, (NITA) which recognizes the importance of technological

intensity in driving towards knowledge empowerment and the creation of a Values-based Knowledge Society

for Malaysia. The NITA provides strategies and plans through its three key elements of People,

Infrastructure, and Applications as shown in Table 11.



Table 11: Elements and Strategies of NITA

ELEMENTS STRATEGIESPeople – Individuals and groups Education

Skills development

Acculturation

Info structure Network

Affordable appliances

Laws and regulations

Applications Indigenous content development

Interactivity

Infotainment, edutainment

Info communication

Source: NITC National IT Agenda, July 1997

The NITA is therefore entrusted to promote the development of an information society where all citizens shall

have access to information and knowledge through Info structure of which the main strategies are directed

towards networking, providing affordable appliances and the provision of laws and regulations. The second

element is People, comprising of individuals and groups in connection with building-up strategies in

education, developing the appropriate skills and dealing with the process of acculturation. The third element

deals with Applications in establishing indigenous content development, interactivity, infotainment,

edutainment and info communication. All three elements are of utmost importance and all sectors should

participate, develop, and grow together in order to facilitate the transformation of the Malaysian society into a

value-based knowledge society and tomorrow’s wired world.

Multimedia Super Corridor

Given the changing communications mediascape, no government can now ignore the obvious challenges and

the Malaysian government has as most other Asian nations, began massive and ambitious plans to wiring up

the nation. Perhaps Malaysia can lay claim to symbolizing this move better than anywhere else in its

Multimedia Super Corridor (MSC).

The MSC was initiated ini 1994 and launched on August 1, 1996 by the then Prime Minister. Huff (2002)

recognizes that Malaysia’s MSC is a way for Malaysia to join the information society. Malaysian leaders



were quick to develop an Internet infrastructure that would link Malaysia to the Web, thus laying the

foundation towards a knowledge-based economy. It was hoped that by linking to the new global knowledge-

based economy, Malaysia would be able to ride on the wheels of the new technology. This project

demonstrated the total commitment of the country in trying to keep up with the competition and challenges of

the new global information and communication environment. The plan was actually assisted by the

McKinsey consultants who advised that by developing information industries, Malaysia will leapfrog into the

Information Age. It is developed with the following objectives:

To achieve the goals of Vision 2020 by catalyzing productivity-led growth

To leapfrog Malaysia into leadership in the Information Age by attracting and developing world-

leading companies through “smart partnership” between leading international and Malaysian firms

To build global bridges between Malaysia and other intelligent cities for mutual enrichment

(NITC Malaysia, 2001)

The 10 point Bill of Guarantees pledged by the government should remain one of the most attractive pull

factors, as to ensure the continuous creation and development of MSC. The incentives are:

A world-class physical and information infrastructure

Unrestricted employment of local and foreign knowledge workers

Freedom of ownership

Freedom to source capital to funds globally

Competitive financial incentives

Intellectual Property Protection and Cyber laws

No censorship of Internet

Competitive telecommunication tariffs

Tender key MSC infrastructure contracts for companies using the MSC as their regional hub

MDC as an effective one-stop super shop

The MSC was also to be:

A test-bed for invention, research, and other ground-breaking multimedia developments

Vehicle for attracting world-class technology-led companies to Malaysia and for developing local

industries

A multimedia utopia offering a productive intelligent environment

An island of excellence with multimedia-specific capabilities

A global community living on the edge of the Information Society



The MSC is a special zone built in an area of 15 by 50 kilometers (about 750 square kilometers, a 100 sq. km.

larger than the whole of Singapore!) south of downtown Kuala Lumpur, an area about the size of Singapore.

The area starts from one of Kuala Lumpur’s most recognizable construction, the Kuala Lumpur City Centre

(KLCC) with the Twin Tower, until recently the world’s tallest twin tower, to the Kuala Lumpur International

Airport (KLIA). The area is also the location of two new cities, Putrajaya and Cyberjaya. Putrajaya is the

new seat of the government housing the office of the Prime Minister while Cyberjaya is the MSC intelligent

cyber city complete with a cyber university, the Multimedia University Malaysia (MMU). Other areas

designated as MSC locations are the Technology Park Malaysia, UPM-MTDC (Universiti Putra-Malaysia –

Malaysian Technology Development Corporation) and Kuala Lumpur Tower. It has been described as the

Multimedia Utopia due to its world-class physical infrastructure and next generation multimedia network as

well as the provision of the latest legislation in cyber laws, policies and practices in the multimedia

environment. It is designed to become the ideal multimedia environment in order to attract world class and

local companies working together.

The MSC has attracted the attention of the world and the then Prime Minister, who had been personally

spearheading this project has managed to vie the attention of the leading IT conglomerates including the

CEOs and Presidents of Microsoft, Compaq, Fujitsu, IBM, Hewlett-Packard, Sun Microsystems, ACER and

Nippon Telegraph & Telephone. The idea is to shove and position Malaysia as a major ICT hub in the region

and the world.

The MSC is planned to develop along three phases, which are:

Phase 1 : MDC to oversee the creation of the MSC, set-up 50 world class companies, launch

seven flagship applications, develop framework of cyber laws and develop Putrajaya and

Cyberjaya as world class intelligent cities. To be achieved by end of 2002.

Phase 2 : The Malaysian Multimedia Development Corporation (MDC) shall link the MSC to

other cyber cities in Malaysia and worldwide, develop the second cluster of about 250 world-class

companies, set global standards in flagship applications, harmonized global framework of cyber

laws and develop 4-5 intelligent cities linked to other global cyber cities

Phase 3 : Transform Malaysia into a knowledge society, global test-bed for new multimedia

applications, develop International Cyber court of Justice in MSC and develop another cluster of

intelligent cities linked to the global information super highway (Ariff and Chuan, 1998).



However, Sharifah (2002) reported that there still exists an imbalance between the Malaysian government’s

IT development vision (access to IT services), IT capability and practices. The argument is that some of the

media players involved under MSC project are not aware of the federal legislation and policies development.

MSC’s media legislation, regulations and policies caused of new development shift to support multimedia

industry were not well disseminated to the public, as well as local and international media players. The

regulations and policies came just several months after the MSC project was announced by the Prime

Minister. This problem has created a paradox thinking among the media practitioners, as they do not really

understand about those policies strategy in line with the promotion of a well-being multimedia technology

competitive environment in Malaysia.

It is noted that there are double-standards in practicing the media regulations and policies, as those online and

multimedia players (internet access providers, search engines, web host or content aggregators) do not have

full control over the content which passes through their servers or websites, compared to other paper-based

publication which are more easily identifiable in publishing and distributing such publications to the public.

Strategies for Creating and Implementing Policy Setting

To ensure that the media policies and regulations would reflect the new mapping media scenario, strategic

approaches had been taken by the Malaysian Government which include:

Enabling Legislation

The establishment of a clear set of policy objectives taking into accounts the ramifications of convergence.

Besides being long term and visionary, it sets a clear direction for the industry and provides a basis for the

achievement of economic, social and industry objectives, acceleration of changes in the industry towards

convergence and consumer interests.

Universal Service Obligations / Universal Service Provisions

The provision of a clear regulatory framework in the form of the Communications and Multimedia Act 1998

that establishes the principals and approach to convergence. The Act provides the basis for the development of



the info-communications infrastructure (includes Universal Service Provisions) and safe, secure and reliable

networks, promotes competition, protects consumer interest and nurtures local culture and social values. The

regulatory framework provides a licensing regime that is incentive-based, market driven, pro-competition,

technology neutral, and transparent.

A Single Ministry

Relevant institutions were established to accommodate changes in the industry. While policy issues are within

the realm of the Minister, it has established the Communications and Multimedia Commission as a single

autonomous regulatory body for the convergent industry. To ensure fairness and just administration of the

Communications and Multimedia Act, an appeal tribunal with full judiciary powers has been provided for.

Anyone who is displeased by any decision could recourse to this procedure. Finally, to ensure the

participation of the industry and consumers, we have established the Access, Consumer, Technical Standards

and Content Forums. The forums are tasked with the formulation of standards and codes of ethics in the

contexts of self-regulation.

Strategic Plans

The formulation and implementation of a strategic plan to provide clear cut targets and time frame for the

implementation of strategic policy directions for the industry. The strategic plan will also focus on how well

the national policy objectives for the convergent sector could be achieved.

With the approach of the twenty first century, Malaysia is expected to enjoy high quality media utilities and

practices. An important component in a convergence environment is the easy access towards information

which then enables greater freedom and easier creating, distributing and sharing of information and

knowledge. All over the world people notice the emergence of a new social and economic system, which

enables greater freedom to participate in a new political, social, technological and economic environment.

The Malaysian transition to an information society will create a time of profound change due to the advances

in technology. In book, magazine and newspaper industries, we are thankful for the major technological

breakthroughs including digital layout which replace the time-consuming and expensive typesetting, desktop

publishing via the personal computer and of course the Internet. The introduction of new information and

communication technologies has permitted just about anyone, organizations or countries to launch the greatest

technological leap that could reap untold rewards and achievements in the business and commercial world. In



short, it will change cultures and societies and it is no wonder that most governments are re-engineering

themselves and launching their own and local versions of the Information Society. The Malaysian government

is not allowing itself to watch this challenging and interesting breakthroughs and advances in information

technology from the sidelines. The former Prime Minister, Tun Dr. Mahathir Mohamad rightly feels that the

nation can benefit from a transformation of the local economy from, firstly, an agriculture base to a

manufacturing and export base, to now pursuing to build an information and knowledge society in line with

the rapid changes and challenges that are taking place globally.

Malaysian Communications & Multimedia Act 1998

The Malaysian Communications and Multimedia Commission was created pursuant to the Malaysian

Communications and Multimedia Commission Act (1998) as a new regulator for the communications and

multimedia industry in Malaysia. At the same time, the Communications and Multimedia Act (1998) was

passed, to fulfill the need to regulate an increasingly convergence communications and multimedia industry.

The Malaysian Communication and Multimedia Act provides a set of media regulations which regulates the

converging communications and multimedia industries in Malaysia. The Acts reflects the changing needs of

the industry with new emerging services, networks and facilities. The commission has been set up to monitor,

regulate and to enforce the communication and multimedia laws to all local media players, which are

licensed under the Malaysian Communication and Multimedia Commission (MCMC).

The Communications and Multimedia Act 1998 is based on the basic principles of transparency and clarity;

more competition and less regulation; flexibility; bias towards generic rules; regulatory forbearance; emphasis

on process rather than content; administrative and sector transparency; and industry self-regulation. The Act

seeks to provide a generic set of regulatory provisions based on generic definitions of market and service

activities and services. The jurisdiction of this Act is restricted to networked services and activities only.

The Communications Sector of the Ministry is responsible for the policy and strategic planning of the

communications industry, coordinating its implementation and monitoring industry performance.

The main objectives as provided in the Communications Act 1998, are:

To establish Malaysia as a global centre and hub for communications information content services;

To promote a new civil society where information-based services will provide the basis of continuing

enhancements to quality of work and life;

To grow and nurture local content and culture;



To give priority for the long-term benefits of the end user;

To promote consumer confidence in the industry;

To ensure access and equitable services;

To create a robust applications environment for end users;

To allocate resources efficiently;

To develop sector capabilities; and

To provide secure and safe networking.

Generally, objectives and activities of the Communications Sector involve Policy Planning; Strategic

Planning; Implementation Coordination; and Industry Relations. The national policies for the communications

and multimedia industry are set out in the Act (Section 3(2)). It is hoped that Malaysia would be able to be a

global centre for communication and multimedia information and content services, throughout the Asian

regions (Lowe, 1999). In doing so, the government has set up four industrial forums:

Economic Forum;

Technical Forum;

Consumer Forum; and

Content Forum

The forums consist of respective members of local media players and civic groups. The aims of these forums

are to create and promote local contents, as these will increase the quality of those media products and emerge

to cater for an information-based society. In the long term, the act will benefit the end-users by gearing them

to open competition and new market of being providing newer, quality and comprehensive services.

The Act also reflects a convergence market of network service providers. Separate or different licenses for

content application services to set-up new regulatory framework to promote the growth of the development of

local content application services are reflective of the cultural diversity of the country (Lowe, 1999).

A Commission to supervise and regulate the converging activities and to enforce communications and

multimedia laws has been set up. The Acts reflects the needs of the news of the industry with new emerging

services, networks and facilities. The government wants to attract new market entrants and to increase

competition. An open and liberalized market is also intended to increase the quality of products and services

offered by the industry.



In Depth View of The Legislation

The act is a legal structure to regulate the convergence of telecommunication media, broadcasting and

multimedia. In Addition, the framework has been setup after the Telecommunication Acts in America was

approved by the US President in 1996. Hence, the convergence of the media initiates the cyber legislation

because of the vitals of those media to deliver information technology in the future. (Leo Moggie, 1997).

Furthermore, 588 Act was planned to balance the drastic acceleration of information technology besides

organizing or regulating the act that we possess currently.

Social Regulation

Social regulation is defined as a form of regulating social needs in regards of certain mechanism for example

licensing, type of content, content needs in balancing the values of Malaysian cultural. Even in the scope of

social regulation, Leo Moggie (1998) emphasized strong framework of regulation, which will dominate

content services and encourage the development of content as well as cultural value in Malaysia.

Khaw (1990) stated that if there are any cases related to faux or imitation of our local content from other

countries, the government should provide jurisdiction to shield the content.

In Malaysia, legislations protect our intellectual information content that have been setup. Since then,

copyright act (1997) proposed that even materials that have been transferred to digital or optical technology,

the rights for the original materials are owned by the first owner.

Generally, the contents in the Internet are jeopardized in terms of copyright issue. Khaw (1999) explained that

there are several criteria to recognize these activities for example using system or software without approval

from the owner of the data, as well as uploading information through internet without permission of the owner

of the internet services.

The drastic vastness of Internet technology is harmful if users purposely get involved in illegal activities to

gain profits. Hence, Leo Moggie (2000) accentuated that uploading or downloading MP3 file generates new

problems to music industries.

The Development of Internet Content and Information Regulation



Even though contents application has been penetrated, the convergence of new media is a complete idea of

regulation to monitor the emerging of information technology. (Syed Hussein, 2000). As a basis, there are

three steps that should be followed to regulate the contents of the Internet (Ismail, 1998):

a) Controlling at the stage of decision maker of the policy and legislation. Therefore, all of information

will be strained; otherwise the negative contents could been access or seen by the user.

b) Creating a wise system to strain negatives information.

c) Uniting policy makers at international level, so that complete tussle can eliminate those negative

contents in the Internet.

Abdul Halim Shafie (2000) affirmed that a print out from the media has to link with the cultural aesthetics and

education of people in Malaysia. In addition, local content must be clarified clearly to the audience in order to

educate as well as self-censor information content.

In the Malaysian context, the increasing volumes of online content provide social problems in this new era.

The uncertainty of online content has created problematic social attitude especially the habit of surfing

pornographic websites.

There are several issues related to content of information. Khaw (2000) underlined that the government

should execute an open policy allied to information in the Internet. For instance, the issues of pornography,

gambling and slander are critical issues that are discussed before the circumstances generate negative thoughts

as well negative culture in Malaysia. Gambling in Malaysia is illegal if they are not granted any license from

government. Gambling through the Internet however, is very obstinate to hinder.

It is worse if political campaigns are held through the Internet to confer wrong information toward other

parties to win in elections. Hence, how we intend to strain information if the websites have been powered by

oversea companies which are known to impart free web space to breed any information from their website.

In the era of globalization, information technology is used to relate to cultural impact. Issues of globalization

and the conception of people’s identity is an immense dilemma nowadays because globalization spawns the

exertion of people’s unity. (Shamsuddin, 2000) He also added that Malaysia has to confront this dilemma.

Under Social Regulation 588 Act, the rights and protection towards users are not emphasized when they use

any products or services that are imparted by the communication industry. Ali Sharom (2000), affirmed that

precedence should be give to users in order to shield them from being monopolized or cheated by someone.



Problems and Challenges in Malaysian Media Convergence:

What industry development mechanisms should be put in place to achieve Malaysia’s objectives?

There are several vital mechanisms that should be noticed, and of course content regulation and policy, which

include both censorship and content regulation (which defines content, directs where content can be shown

and dictates who can develop content). Secondly, licensing access/regulation and policy, which include

licensing to remove access of uptake barriers, and the licensing of various players in the industry to meet

specific local content quality or quantity requirements. Thirdly, public and private institutions and bodies

which include the regulation enforcement aspect of the industry, and the types and function of government

and public agencies in the content approval process. Lastly, incentives and stimulation which include private

and government investment, and both domestic and foreign stimulation.

MCMC (2003) proposed that the government and the industry adopt an ambitious vision for the industry:

“To develop Malaysia as a major regional and global centre for content services, to encourage the

development of local content which projects and nurtures national identity and values, and to establish a well-

developed and efficient Networked Content Industry”

To support this vision the government and industry representatives have proposed a balanced set of industry

objectives covering cultural, economic and social aspects of the industry. These objectives have been

developed based on information contained in the draft national content policy, the Communication and

Multimedia Act (1998) and consultation with industry players.

Malaysia desires to project its national identity and values through local content. To do this successfully, local

content must be of high quality, accessible and affordable, and demanded by Malaysians. The proposed

cultural objectives for the content industry are to consolidate racial and national unity through the projection

of national culture: Malaysia’s Networked Content Industry Objectives Malaysian Communications and

Multimedia Commission and the encouragement of the production of content which is of high quality,

innovative and creative; able to enrich and enhance the quality of material and spiritual living in accordance

with social-economic development. A critical factor to project the Malaysian national identity and values is an

understanding of what national identity and values are. Given Malaysia’s vibrant and diverse culture, it is



unlikely that any definition will be comprehensive or be up-to-date with Malaysia’s national identify and

values.

Malaysia also desires to make the Networked Content Industry a key economic contributor. For this purpose,

Malaysia need s a competitive, viable industry that is innovative and contributes to employment and

Malaysia’s trade balance. The proposed social objectives for the Networked Content Industry are the

contribution to Malaysia becoming a knowledge society and make access and content available everywhere

and affordable to all as well as establish a secure, robust and safe networking environment

Malaysia’s aim is to become a knowledge society. The accessibility and affordability of both local and foreign

content is an important contributor to achieve this national aim. Access to local and foreign content

everywhere in an affordable manner will enhance knowledge and increase productivity. In addition, Malaysia

needs to build trust with the public in using new forms of networked content in a secure and safe manner, in

order for new access technologies to become widely utilized. Malaysia lags behind leading countries in the

development of its Networked Content Industry due to the lack of funding and scale, and ineffective content

and access regulation and enforcement. As such, with the exception of television, local content popularity is

between 50 to 75% lower than leading countries. Economically, Malaysia’s Networked Content Industry

contributes 0.63% to Malaysia’s GDP, which is less than half compared to industry contributions in leading

countries. Socially, in the penetration of ‘newer’ access technology, Malaysia is substantially lagging behind

leading countries.

Ineffective and unfavorable advertising regulation results in limited advertising revenue for Malaysia’s

Networked Content Industry: Content regulation for advertising is unfavorable towards advertising on free-to-

air television, which drives advertising revenue away from the Networked Content Industry towards non-

Networked media such as print; and made-in-Malaysia has made advertising in Malaysia unattractive for

multinationals due to the compliance burden of producing commercials in Malaysia.

There is limited revenue redistribution to local content creators. Hence, television subscription is not legally

required to broadcast or invest in local content; and regulations require 60% local language to be broadcasted

on free-to-air television, rather than specifying the amount to be invested in local content (e.g. station can

choose to show low cost programs or air re-runs).



Ineffective enforcement of copyright negatively impacts revenue flows to music and moving picture

industries. Potential losses through piracy discourage investment into local content and this results in less

local content available for radio and television.

Lack of competencies due to shortage of world-class skills, industry scale and promotion ability negatively

impacts the industry’s ability to create popular local content. Insufficient incentives to invest in local

capabilities and to attract foreign co-productions results in a lack of skills and technology. Competitive

disadvantages prohibit local content creators for moving pictures to gain scale, resulting in reduced risk taking

and stifling innovative content and ineffective industry organization in promoting local content locally and

overseas, thereby not stimulating sufficient demand.

Such investments by the Malaysian government will eventually pay off although there are problems such as

shortage of skilled IT workers although it should be noted here that about 30 per cent of Malaysian

knowledge workers are employed by the Singaporeans. The Malaysia government is now working on the

incentives and strategy to persuade skilled IT personnel to return and work in the home industry. Lack of

skilled personnel is perhaps a problem faced by many countries.

One of the main emphases of the Malaysian Vision 2020 is to create and increase the supply of knowledge

workers. Some industry analysts observed that the MSC has stimulated the supply of knowledge workers and

technopreneurs and has created jobs faster than the number of skilled personnel provided by the education

providers. However, the MDC 1999 Education IT HR Survey shows that the supply of science engineering

and technology graduates has increased to 137,212 between 1999-2001. The 4th Impact Survey (MDC,

2003) noted that the majority of the 15,337 knowledge workers in the MSC are Malaysians, representing 82.2

per cent of the total population of knowledge workers. MDC claimed that Malaysia is able to fulfill demand

needed by the industry.

Demand for knowledge workers has spurred growth in the number of education providers in the IT and high-

tech services. The Malaysian government has always maintained that the country has sufficient human

resource and is looking at increasing further skills, training and specialization of the workforces, especially

from the various universities and colleges.

Overlapping content regulation and multiple governing bodies cause a high compliance burden and increase

the risks in content creation. Lack of transparent content regulation and inconsistent enforcement are also

apparent, thereby increasing the risk to invest in and produce local content. In addition, many government



bodies govern the Malaysian Networked Content Industry, resulting in a high compliance burden and lengthy

approval processes.

Uptake of ‘newer’ access technology is low due to relative high access charges and ineffective government

stimulation. In preparation for the future rollout of newer access technologies, adequate open standards are

required. Lack of competition or price regulation for newer access mechanism keeps access prices relatively

high. Then, the limitation of regulation on open standards and interconnectivity slows the demand for newer

technologies and reduces competition and innovation and ineffective government incentive schemes to

stimulate demand for new access technology.

For the future, the industry must prepare for the successful introduction of new Networked Content

technology. Malaysian’s purchasing power parity makes PCs expensive and broadband prices are the highest

in the region. This has resulted in a low penetration of PCs of 13% and a lack of demand for broadband (3%

penetration). A few large companies dominate Malaysia’s telecommunications industry, which results in high

prices for both existing and new access infrastructure.

At present, there are no strong revenue models to support the development of local interactive and wireless

content; in the interactive industry, less than 5% of revenues are distributed to content providers, and there is

limited independent wireless content being created (e.g. content created outside the large telecommunications

players). The international benchmark study demonstrates that the government of countries leading in internet

and wireless penetration and usage have adopted an active role in creating content and promoting the use of

the new media with the general public.

Therefore the challenge now for everyone of us is to ensure that the citizens are wired to receive information,

knowledge and communication, the basis of the creation of the Information Society and NITA’s Value-based

Knowledge Society. Information is therefore the key element in the fabric of Malaysian society due to its

impact on social, economic, political and cultural life of the country. For Malaysia it simply means efforts to:

Create social harmony and cohesion

Reduce disparity between rural-urban areas

Bridging the gap between the poor and the rich

Ensuring racial and religious harmony



Therefore, Malaysia’s pro-information orientation is visible in the government’s efforts to promote IT

awareness among the population and generate new growth opportunities as well as skills and employment in

high-tech areas. Another emphasis is access and ability to network, especially in connecting remote servers

and terminals with each other. It is not just the government getting wired by focusing on the Cyberjaya but

also ensuring that all citizens have access to information in an equitable manner. Access must bring along

with it changes in people’s lives, made possible by the rapid advances in technological and industrial

developments in computers and telecommunications, and people’s understanding of the value of

communication. All citizens are expected to be able to create social relationship at all levels by

communicating via networks like Internet, transcending the barriers and limits of distance and time. Clearly

the IT industry is the central idea in our government’s policy especially with the establishment of MIMOS,

MSC, E-Government, E-Learning, E-Community, E-Sovereignty and others. The government through Vision

2020 has definitely made the right decisions and chose the right direction in developing the information and

communications industry according to our own mould.

In the present IT scenario, the interests of Malaysian citizens are being formulated and the prospects are good

for all including women because there is an adequate representation of all groups and IT advantages can be

equitably shared by all. The government has a strong commitment to the vital role women’s organizations

play as creators, advocates and providers of services to various groups in the country. Support should be

given to all the efforts taken by Malaysian women to further upgrade their status in the new communication

and information technologies scenario.

Conclusion

Evers (2003, 395) when comparing Malaysia with fellow members of ASEAN indicated that Malaysia’s

knowledge strategy might actually pay off while Huff (2002, 267) pointed out that within the contents of the

larger Muslim world, Malaysia had done well and if compared with other Southeast Asian countries, Malaysia

is in the middle of the pack after Singapore and Hong Kong, but above Thailand, the Philippines, Indonesia,

and Vietnam.

The creation of the MSC after being inspired by Silicon Valley by the Malaysian government is truly one of

the major triumphs for all Malaysian in the future. Despite cynicism regarding ‘grandiosity’ ‘boastful terms’

and entering a ‘plateau’, etc, the MSC will certainly increase the level of preparedness of the country to

transform into a fully industrialized knowledge-based economy by 2020. Malaysia’s explicit national

initiative, the MSC Superhighway has certainly been copied and used as models by other countries and some

neighbors. The future in Asia is after all the next economic growth engine, which is the knowledge –based



service industry. In the long term, the MSC will enable the creation of a better class of companies that can

compete with their regional counterparts in a liberalized and globalised economy.

Malaysians can look forward to the final phase, planned for 2011 to 2020, to see the fulfilling state of the

whole country evolving into one super highway and super corridor, finally not being just a user and applicant,

but empowered to be a creator of technology as well. The current Prime Minister, Datuk Seri Abdullah

Ahmad Badawi is fully aware of the mission ahead. The impressive performance thus far shall be maintained

and there is a renewed focus by the government to ensure that the rural areas benefit from the MSC.

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09 Syed Agil Alsagoff Azizah Hamzah

Documents

abdul halim

enables greater

multimedia

high compliance

local media

newer access

malaysian

networked