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Following is a speech delivered by the Deputy Secretary for Information Technology and Broadcasting, Mrs Rita Lau, entitled "Convergence in Info-Communications: Challenges and Opportunities" at the Hong Kong Economic Forum "Free Market Economy - The Way Forward" organised by the Hong Kong Policy Research Institute and the Hong Kong Trade Development Council today (Monday) :
Chairman, ladies and gentlemen,
The next hundred years are being touted as the "Information Century" when all things will become known to all people as long as they have a phone and a computer; a time when our monitors become the light at the end of the tunnel of ignorance and electronic media is the highway leading to enlightenment.
When information flows and transcends geographical and national boundaries, crosses time zones and is instantaneously available at the press of a key; and the world reduces to a global village, the question governments and individuals need to ask themselves is not whether they should embrace this brave new world but how?
Let me share with you my six-year journey working with the broadcasting industry first as a regulator and in the last two and half years as a policy formulator for broadcasting services. It was also this very same period that we witnessed the unprecedented growth in both the broadcasting and telecommunications industries in the history of Hong Kong. But my story will not be complete if no reference is made to the broadcasting scene that predates it.
Until 1991, Hong Kong's broadcasting scene was simple. We had just two television stations, and two radio stations. Everybody watched or listened to the same things. Because of that, these television and radio stations were held to be immensely influential. The emphasis of broadcasting regulation then was on control, to ensure that this influence was not misused. Indeed, it was not until the early 70's that licensees were allowed to broadcast their own news programmes. And control was easy, given the small number of broadcasters.
In just seven years, the number of domestic television channels in Hong Kong has grown from four to over 40. Many more satellite channels are receivable in Hong Kong and the way in which people get their television is changing too. People now get their television from terrestrial, satellite and cable broadcasters. And with the introduction of the world's first commercial video-on-demand (VOD) programme service in Hong Kong in February 1998, television programmes can now come through the telephone lines. Even computer users are downloading television programmes via the Internet, and soon able to watch them live, making web TV a reality.
What about the telecommunications front? Development is, if I may say so, equally exciting and perhaps the pace even more rapid. Three competitors to Hong Kong Telephone Co. were licensed in mid-95 giving us now a choice of four fixed telecommunications network services. As for mobile telecommunications, the 1994 review conducted by the Government has led to the issue of six Personal Communication Services (PCS) licences to broaden competition to the existing five cellular mobile services licences.
With the development of advanced technologies and the upgrading of broadband networks, the ability and capacity of the broadcasting, telecommunications and computing networks to transmit information have been greatly expanded and enhanced. The most significant development in the information and communications sectors in the past few years is the phenomenon of "convergence". "Convergence" is an on-going process and it is happening on many levels. At the technological level where convergence began, digitisation has led to a convergence in the ability of different communications networks (that is, broadcasting, telecommunications and computing) to transmit all types of information, that is, voice, data and video in the form of "bits" which are effectively indistinguishable technically. A telecommunications network now has the ability to transmit broadcast services (and vice versa) and audio and visual products can now be delivered electronically by a variety of transmission channels (twisted pair copper wires , coaxial cable, optical fibre and radio spectrum). Technological convergence has also made convergence at the service and market levels possible and feasible. For example, since the Fixed Telecommunications Network Services (FTNS) market was opened up in 1995, the telecommunications sector in Hong Kong is witnessing a radical shift from the monopoly provision of voice services to open competition across a full range of telecommunications services and even video-on-demand (VOD) services.
Technologies converge but convergence is not just about technologies. Convergence is rapidly creating an interactive multimedia market where new services and products which integrate voice, data, video, graphics and animations are communicated to viewers and customers and which empower users to interact through various distribution media.
What does this mean for regulators and policy makers?
In April 1992, when I took over as the Commissioner for Television & Entertainment Licensing, one of the first thing that caught my immediate attention and which I was determined to change as soon as I could was the practice of monitoring television programmes live! It had never occurred to me that my staff worked on shifts to watch TV to see if the stations had breached any programme standards and codes. And, it did not take me long to replace it by recorded selective monitoring. At its peak, TELA, the acronym for the Department was monitoring an average of 1,076 hours or 8.4 per cent of total programmes broadcast on 31 TV channels a month. Last month, 678 hours of monitoring was recorded and in percentage terms 1.8 per cent of the total programmes broadcast but this time on 60 TV channels, a clear indication that a progressive complaint-driven mode is at work.
This is not to say I relish shredding work or responsibilities. I know fully and also believe that it is a legitimate and rightful duty of the Government to protect the young and vulnerable, and to ensure that programmes broadcast do not offend the taste and standards of the community. Denial of the need for some degree of content control would be disingenuous. Afterall, broadcasters' business is built on its ability to influence. But for a number of reasons, I believe that when governments do touch on content regulation, this touch ought to be as light as possible and that any guidelines or restrictions set should preserve the principles of free expression and artistic development.
As I have outlined earlier, the advent and convergence of technologies are destined to lead to more proliferation and diversification of multi-media services. For sure, the number of channels will increase and not only that, soon it will no longer be meaningful to talk about "channels" as such. Traditionally, television and radio have been synonymous with broadcasting. That concept has already been eroded by the emergence of pay-per-view services and more recently point-to-point VOD programme series. Viewers can now decide when and what to watch instead of passively receiving the programmes chosen and fixed at a certain time for them. Narrowcasting is going to overtake broadcasting as the trend. In such an environment, and when access to information and entertainment becomes so personal, what claims do we have and on what grounds can we justify policing the content watched?
Another new challenge is the Internet. The beauty of the Internet is in its openness. There are no intermediaries, no editors, no borders and above all no censors. Although broadcasting on the Internet is yet to come, very soon with improved speed and picture quality brought about by new technologies, this will be made a reality. The boundary between telecommunication and broadcasting will become more blurred and the sheer volume of the net traffic will beat any attempts to surf it all let alone regulate it.
If my forgoing remarks led you to think that I advocate deregulation only just because we are unable to regulate, then I should hasten to explain why it is not the case. The people of Hong Kong have worked hard to make Hong Kong what it is today: a free and open society and a successful city by any standards. Hong Kong already leads in a number of areas, the commercial application of VOD is just one. Last year, in the Chief Executive's first Policy Address for the Hong Kong Special Administrative Region, he underlined the importance of keeping the HKSAR in the forefront of technological development and that we should work to be a leader, not a follower in the information world of tomorrow.
To achieve this objective, we need to define a regulatory vision for the future which supports market-led developments in a converged environment on the one hand and to unshackle the existing restrictions that stifle innovation, discourage investment, choke new enterprises and undermine established players on the other. A fresh approach to regulation at both the facility and service provision levels is called for to ensure that new enterprises and established players will be allowed the freedom to harness the converging technologies in an environment where applications and infrastructures can develop and flourish. An open, common interface information infrastructure, accessible throughout the SAR, needs to be established and obstacles to interconnections between networks removed. The forces of convergence cannot and should not be held back especially when we know the industries stand ready to embrace the tremendous opportunities that lie ahead. Only by so doing will we be able to maintain our position as a leading international hub for info-communications industries.
If industry takes an active role in resolving some of the possible problems raised by the content of on-line or broadcasting services and parents are more ready to exercise guidance on their children, Government policy need not be interventionist. This result will probably have to be earned, rather than conferred. The Government and the community would unlikely accept an industry which took no responsibility for content especially problematic material which raises social and ethical questions.
On the other hand, the business community and individuals who value their right to freedom of expression will not accept controls that infringe on commerce or stifle individual creativity and self-expression.
A middle ground must be found in policy terms and industry should do its part with the Government and the community to find it.
End/ Monday, June 29, 1998
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