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Communications Authority press release
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The following is issued on behalf of the Communications Authority:

     This press release summarises the Communications Authority (CA)'s decisions at its 18th meeting held in April 2013:

Regulatory guidance on charging principles of interconnection between fixed carriers will be withdrawn subject to an 18-month transitional period
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     Following a two-month consultation, the CA concluded a review of the way forward for the regulatory guidance on the charging principles of narrowband interconnection between fixed carriers, and decided to withdraw the regulatory guidance subject to an 18-month transitional period.

     At present, charges of narrowband interconnection between fixed carriers are the only type of carrier-to-carrier local interconnection charges which are still subject to regulatory guidance. For fixed-fixed broadband interconnection charges, mobile-mobile interconnection charges and fixed-mobile interconnection charges, all such charges are not subject to any regulatory guidance at present and are solely determined through commercial negotiations between telecommunications operators.

     The regulatory guidance for narrowband interconnection between fixed carriers was first promulgated in 1995, when the local fixed telecommunications market was liberalised. The regulatory guidance specifies that in general when a customer of a fixed carrier places a call that terminates with another fixed carrier, an interconnection charge will be paid by the originating fixed carrier to the terminating fixed carrier. Taking into account the significant changes and developments in the market and technology over the past two decades and under the long standing market driven policy, regulatory guidance which applies to narrowband interconnection between fixed carriers is increasingly out of place when the equally important broadband interconnection is not subject to similar regulatory guidance.

     In view of the competitive environment in the local fixed telecommunications market and the wide range of service choices available to consumers at affordable prices, the CA considered that the withdrawal of the regulatory guidance, which concerned narrowband interconnection charging arrangements between fixed carriers on a wholesale level, would not have impact upon the retail prices of local fixed services.

     The regulatory guidance will cease to be effective starting from October 16, 2014 after an 18-month transitional period. Fixed carriers are encouraged to make their best endeavours to conclude commercial agreements on interconnection. In the meantime, the CA will ensure that fixed carriers fully observe the any-to-any connectivity requirement, i.e. any customer in any network can have access to any other customer in any interconnecting network, such that services would not be interrupted in case of failure of commercial negotiations between fixed carriers.

     For details, please refer to the CA's Statement, which is published on the CA's website www.coms-auth.hk/filemanager/statement/en/upload/170/ca_statements20130416.pdf.¡@

TVB Network Vision Limited's application for additional means of transmission and allocation of more In-building Coaxial Cable Distribution Systems channels
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     The CA, pursuant to the relevant condition of the domestic pay television programme service licence of TVB Network Vision Limited (TVBNV) (formerly known as TVB Pay Vision Limited), approved TVBNV's application to employ the fixed network provided by Hutchison Global Communications Limited or any other fixed carriers licensed under the Telecommunications Ordinance (Cap. 106) and In-building Coaxial Cable Distribution Systems (IBCCDS) as additional means of transmission to provide its domestic pay television programme service. TVBNV currently provides its pay TV services through satellite and the IP service platforms provided by fixed carriers.

     Having carefully considered the technical feasibility of TVBNV's proposal and whether the employment of the new transmission means would give rise to regulatory issues, the CA granted its approval subject to the condition that TVBNV will continue to provide a locking device to the satisfaction of the CA in accordance with the Broadcasting Ordinance (Cap. 562).

     The CA, pursuant to the relevant conditions of the domestic pay television programme service licence and Fixed Carrier (Restricted) Licence of TVBNV, also decided to allocate to TVBNV a maximum of 10 IBCCDS channels in the UHF band (470-862 MHz) for the delivery of its domestic pay television programme service, comprising 11 new high definition and 49 standard definition television programme channels using the approved means of transmission.

     In allocating the IBCCDS channels to TVBNV, the CA has considered the transmission capacity requirement of TVBNV's pay television service and the supply and potential demand for IBCCDS channels. The approval was subject to the condition that TVBNV started to provide the 11 new high definition and 49 standard definition television programme channels within 12 months after the approval of TVBNV's application. Given that the utilisation status of IBCCDS channels in the UHF band varies amongst buildings, TVBNV will have to liaise directly and reach agreement with the owner of the IBCCDS (normally the owner or the estate management of the building) on the exact channels that it may use in that building.

Compliance of Digital Broadcasting Corporation Hong Kong Limited and Metro Broadcast Corporation Limited with milestones under their Sound Broadcasting Licences
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     The CA also considered the submissions of Digital Broadcasting Corporation Hong Kong Limited (DBC) and Metro Broadcast Corporation Limited (Metro) and was satisfied that DBC and Metro had complied with the milestone under their respective licences to formally commence digital audio broadcasting services within 18 months after granting of the licences (i.e. by September 21, 2012). DBC commenced on September 21, 2012 a formal service comprising seven 24-hour sound broadcasting service channels of specified genres while Metro formally launched services on September 19, 2012, providing one 24-hour sound broadcasting service channel on financial news and information. In accordance with the licence conditions, the $2 million performance bond submitted by each of the licensees to secure compliance with the milestone will be discharged.

Late payment of licence fees of the domestic free television programme service licence and fixed carrier licence for the licence year 2012/2013 by Asia Television Limited:
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     The CA considered a case of non-compliance of Asia Television Limited (ATV) arising from its late payment of the fixed fee of its domestic free television programme service licence (TV Licence) and the fee of its fixed carrier licence (Carrier Licence) for the licence year 2012/2013.

     Under the Broadcasting (Licence Fees) Regulation (Cap. 562A) (Broadcasting Regulation), ATV shall pay to the CA the fixed fee of its TV Licence not later than 14 days after the commencement of the licence year (i.e. December 15, 2012). Under the Telecommunications (Carrier Licences) Regulation (Cap. 106V) (Telecommunications Regulation), ATV shall pay the annual fee of its Carrier Licence on the anniversary of the issue of the licence (i.e. December 1, 2012). ATV failed to settle the above-mentioned fees by the deadlines stipulated in the relevant Regulations. Following the issue of reminders and a warning letter by the CA, ATV finally settled the fees by March 25, 2013.

     Having considered the circumstances of the case and the representations of ATV, the CA considered that ATV's failure to settle the fixed fee of its TV Licence and the annual fee of its Carrier Licence by the deadlines stipulated in the relevant Regulations was a clear breach of the statutory provisions and licence conditions on licence fee payment. In view of the severity, nature and duration of the contraventions, the CA decided that (a) a financial penalty of $50,000 should be imposed on ATV for its breach of Condition 14.1 of ATV's TV Licence, section 13(1) of Schedule 4 to the Broadcasting Ordinance (Cap. 562) and section 3(1) of Schedule 1 to the Broadcasting Regulation; and (b) a financial penalty of $50,000 should be imposed on ATV for its breach of General Condition 4.1 of ATV's Carrier Licence and sections 1 and 3 of Part 1 of Schedule 3 to the Telecommunications Regulation.

Ends/Tuesday, April 16, 2013
Issued at HKT 16:10

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