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The following is issued on behalf of the Broadcasting Authority:
At its meeting in October 2008, the Broadcasting Authority (BA) completed its preliminary enquiry into the complaint about Hong Kong Cable Television Limited (HKCTV) engaging in anti-competitive conduct in the pay TV market through its service termination practices in 2007. Having processed the case in accordance with its investigation procedures and taking into account the competition analysis of an independent consultant, the BA concluded that HKCTV had not breached sections 13 and 14 of the Broadcasting Ordinance (Cap. 562). Nonetheless, the BA noted that there was dissatisfaction with customer services of pay TV operators, and has conveyed such concerns to the senior management of the relevant licensees where circumstances warrant. The licensees generally took note of the concerns seriously. The BA will closely monitor the market situation. Details of the above case are set out in the background note at Appendix A.
The BA approved the application by Real Global Broadcasting Private Limited for a non-domestic television programme service licence. The period of validity of the licence is 12 years, from October 18, 2008, to October 17, 2020 (both dates inclusive). There are now altogether 17 non-domestic television programme service licensees in Hong Kong providing 195 satellite television channels targeting viewers in the Asia Pacific region. Forty-seven of these channels are available for reception also in Hong Kong.
In October 2008, the BA considered one public complaint against the series of television advertisements, entitled "IT達人Talk" broadcast on various channels of HKCTV from May 30 to June 30, 2008. HKCTV was given an advice to observe closely the relevant provisions in the Generic Code of Practice on Television Advertising Standards. Please see Appendix B for details.
The BA notes that in September 2008 the Commissioner for Television and Entertainment Licensing (CTEL) dealt with 70 cases (425 complaints) under her delegated authority, of which 10 cases (11 complaints) were classified as minor breaches and 48 cases (174 complaints) as unsubstantiated. Twelve cases (240 complaints) were held to be outside the ambit of the Broadcasting Authority Ordinance. The monthly complaint figures dealt with by CTEL since January 2008 are shown in Figure 1. A chart showing the nature of the unsubstantiated complaints in September 2008 is at Figure 2. Please refer to the BA website, www.hkba.hk, for details of the complaints.
Appendix A
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Background Note on the BA's decision on the Complaint against HKCTV for engaging in Anti-competitive Conduct
In May 2008, the BA received a complaint lodged by PCCW Media Limited, alleging that HKCTV acted to prevent, distort or substantially restrict competition in the relevant television programme service market by hindering or inhibiting the ability of its Barclays Premier League (BPL) subscribers to terminate their service arrangements with HKCTV in 2007 (the Conduct). The complainant submitted that the Conduct involved the customer service hotlines and service termination procedures of HKCTV which affected subscribers who wanted to switch to PCCW Media's "now TV" service and had the purpose or effect of preventing, distorting or substantially restricting competition in the relevant television programme service market by limiting customer choice and delaying or preventing customer transfers in contravention of sections 13 and/or 14 of the Broadcasting Ordinance.
Having carefully considered the submissions and the competition analyses prepared by an independent consultant, the BA noted that:
(a) HKCTV faces a strong pay TV rival in the market. In June 2007, HKCTV and PCCW Media had similar market shares in terms of subscription.
(b) The trend of HKCTV's market share over time shows that its rivals are able to compete in the market as effective competitors.
(c) The increase in subscriber numbers of HKCTV's rivals in 2007 shows that barriers to expansion are not so great as to prevent them from increasing their subscriber numbers. Besides, HKCTV's rivals have a service coverage at least as wide as HKCTV. This suggests they are able to compete for as many customers as HKCTV.
(d) There appears to be no evidence to suggest that the purpose of the Conduct was to harm competition. HKCTV had attributed the difficulties in reaching customer services hotlines to technical problems during the start of a new call centre in Guangzhou and had apparently taken measures to improve its handling of termination practices.
(e) There appears to be no evidence to suggest that the effect of the Conduct was to harm competition. The increase in subscriber numbers of PCCW Media during the relevant period shows that in effect, customers were able to switch service.
Based on the above, the BA is of the opinion that there is insufficient evidence to suggest that HKCTV's rivals are unable to compete in the relevant market and to support the allegation that the Conduct had the purpose or effect of preventing, distorting or substantially restricting competition in a television programme service market. The BA concludes that HKCTV has not contravened sections 13 and 14 of the BO.
The complaint is unsubstantiated. The investigation report on this complaint is available on the BA's website: www.hkba.hk/en/tv/competition/complaint_cases.html.
Appendix B
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Case - The Series of Television Advertisements "IT 達人Talk" broadcast on Cable No.1, Cable Finance Info, Cable News, Entertainment Channel, Entertainment News, Hollywood Movie and Movie Channel 1 of Hong Kong Cable Television Limited from May 30, 2008, to June 30, 2008.
A member of the public complained that the series of television advertisements "IT 達人Talk" could be considered political which was prohibited under the Broadcasting Ordinance. The advertisements did not feature any products, services or commercial promotion but had strong emphasis on the profile, image, reputation and popularity in the Information Technology (IT) sector of a candidate in the 2008 Legislative Council Election (IT Functional Constituency).
The BA noted that (i) the series of eight advertisements with the same host were about the lifestyle of IT personnel. A flipcard showing the profile of the host was found and credits giving acknowledgement to various organisations and companies were displayed at the end of each version. There was no reference to any political party or election matter; (ii) the advertisements concerned were not considered election advertisements; and (iii) the advertisements adopted a programme style which was not clearly identifiable as advertisements.
The BA considered that an advertisement would constitute "an advertisement of a political nature" if it sought to further the interests of a particular political party or person.
The BA considered that although it was obvious that the advertisements were intended to enhance the popularity of the host in question and build up his strong connection with the IT field, they were not "advertisements of a political nature" as: (1) they did not contain materials which promoted the interests of any political grouping or person; and (2) they were not election-related. The advertisements were not in breach of section 12 of Schedule 4 of the Broadcasting Ordinance which prohibits the inclusion of advertisements of a political nature in domestic pay television programme services.
Nevertheless, the BA considered that the advertisements adopted a programme style which was not clearly identifiable as advertisements and had not been flagged as such. The advertisements were in breach of paragraphs 4 and 5 of Chapter 3 of the Generic Code of Practice on Television Advertising Standards (TV Advertising Code) which stipulated that advertising material should be clearly identifiable and that an advertisement adopting a programme style had to be flagged in a clearly legible manner.
Hong Kong Cable Television Limited was given an advice to observe closely the relevant provisions in the TV Advertising Code.
Ends/Monday, October 27, 2008
Issued at HKT 18:48
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