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Following is a speech (English only) by Secretary for Information Technology and Broadcasting, Mr K C Kwong, at the Opening Address of the Asia Pacific Electronics Symposium 1999 and Intelligent Transportation Technologies Forum today (Wednesday):

Mr Sze, distinguished guests, ladies and gentlemen,

I am honoured to be invited to speak at the "Asia Pacific Electronics Symposium 1999 and Intelligent Transport Technologies Forum". It is indeed encouraging to see so many industry representatives, professionals and academics participating in today's forum to exchange views and share experience in the application of digital broadcasting, electronic commerce and intelligent transport technologies.

The rapid advancement and wide adoption of digital technology has led to great changes in the past decade. These changes affect not only the field of electronics and computing industry. They are changes which affect our daily lives, including how we communicate with each other, how we receive information and how we run business. While these changes have posed immense challenges to the industry and regulators, they are at the same time opening up unprecedented business opportunities for information, entertainment, education and commerce.

Hong Kong is well positioned to benefit from the opportunities of the digital age. We have a world-class telecommunications infrastructure. We have creative content providers in the broadcasting, information technology, publishing and advertising fields. Above all, we have a favourable pro-business environment which promotes investment and technology transfer.

We must build on our strengths to stay competitive in the digital world of tomorrow. Against this background, the Government has formulated the "Digital 21" Information Technology Strategy, which sets out our vision and initiatives of how Government, business, industry and academia can work together to make Hong Kong a leading digital city in a globally connected world of the 21st century.

Let me focus on those initiatives which relate to the theme of this Symposium, that is, digital broadcasting and electronic commerce.

The application of digital technology in broadcasting would benefit both the industry and the consumers. For the industry, more spectrum capacity will be available for the introduction of new, innovative services. For example, interactive multi-media services on television and radio is one of the many commercial possibilities which the industry may explore with this new technology. For consumers, spectrum will no longer be a constraint to consumer choice. With the introduction of digital transmission technology and supported by our open market policy, we look forward to having an even more vibrant broadcasting market with a wider choice of quality services. Digital television and radio will also provide much improved sound and picture quality. The reception problem associated with analogue transmission will be overcome with the introduction of digital broadcasting.

In recognition of these benefits, countries all over the world are at various stages of testing or launching digital broadcast services. Hong Kong is no exception and we are making good progress towards paving the way for the early introduction of such services.

Since the end of last year, the three local radio broadcasters have been conducting a technical trial of digital audio broadcasting (DAB) with a view to establishing the feasibility of territory-wide coverage of DAB signals. The technical trial has just been completed and the results are, in general, positive and assuring. Apart from examining the technical aspects, the Government has in the mean time commissioned a consultancy study to examine the market and regulatory issues concerning the introduction of DAB in Hong Kong. Amongst others, we are looking at the market position of DAB in the multi-media information world. With the benefit of and taking into account the findings of the technical trial and the consultancy study, the Government would formulate policy proposals on DAB for consultation with the industry and the community early next year. When DAB should be introduced as well as how DAB services should be licensed and regulated are some of the policy issues that will be addressed in this forthcoming consultation.

Turning to digital television broadcasting, on completion of the 1998 Television Policy Review, the Government has made the decision to proceed with a technical trial of digital terrestrial television (DTT) with a view to determining the most suitable DTT standard for adoption in Hong Kong. We have since established a government-industry steering committee to coordinate the technical trial. We have so far conducted tests on two of the three prevailing DTT standards and we expect that the whole trial would be completed in early 2000.

Like the formulation of DAB policy, the Government will, having regard to the outcome of the technical trial, formulate policy and regulatory proposals on DTT for consultation with the industry and the community. Our target is to commence DTT broadcast within two years, on satisfactory completion of the trial. We will allow simulcast of analogue and digital television broadcast in Hong Kong in the initial stage.

The promotion of electronic commerce is another major initiative in our Digital 21 IT Strategy. The emergence of electronic transactions over the Internet is the most significant development affecting businesses in the Information Age. Electronic commerce has become the key tool in enhancing corporate competitiveness. Some even see electronic commerce as the only means of survival for business in the longer term. Whichever the school of thought, electronic commerce certainly allows business to reach new markets and operate more efficiently by improving their management of the entire value chain.

The Government fully recognises the importance of electronic commerce to our future economic growth. To encourage the wider adoption of electronic commerce by local business, the Government will play a leading role through the launching of the Electronic Service Delivery (ESD) Scheme. ESD will make it possible for the public to obtain Government services on-line, in a seamless manner, 24 hours a day and 7 days a week. We are about to award the contract for phase one of ESD and we expect the Scheme to be up and running in the latter half of 2000. Services to be covered include submission of tax returns, renewal of driving and vehicle licences, registration as a voter, search for jobs and payment of Government fees, etc. Apart from providing better services to the public, ESD will act as a catalyst to pump-prime the development of electronic commerce in the private sector.

We will also strengthen public confidence in electronic commerce by establishing a local public key infrastructure supported by certification authorities. Through the use of private/public key cryptographic technology and digital signatures, participants in electronic transactions will be able to confirm the identity of the parties to the transactions, ensure the integrity and confidentiality of electronic messages exchanged and safeguard against the repudiation of the transactions. The Government will take the lead in the establishment of the public key infrastructure. Hongkong Post aims to provide the public certification services by the end of the year. But it will not be given exclusivity in the provision of such services. We welcome the establishment of competing services by the private sector.

Also, to strengthen the legal certainty of electronic transactions, we have introduced an Electronic Transactions Bill into the Legislative Council. The Bill aims to give electronic records and digital signatures the same legal status as that of their paper-based counterparts. The Bill will also seek to establish a clear framework to support and facilitate the operation of certification authorities in Hong Kong.

Through these initiatives, we seek to create a favourable environment for electronic commerce to take hold and flourish in Hong Kong.

The development of digital broadcasting services and promotion of electronic commerce in Hong Kong will depend very much on market and consumer demand. It is Government's long-established policy that the introduction of new services should be market-led, with the Government providing a facilitating environment in support of their development. This Symposium will give us valuable insights into the market development in digital broadcasting services and electronic commerce as well as useful input to our formulation of related policies. I wish the Hong Kong Institution of Engineers and every participant a rewarding experience in the discussions.

Thank you.

END/Wednesday, October 13, 1999

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