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The following is issued on behalf of the Communications Authority:
This press release summarises the Communications Authority (CA)'s decisions following its 24th and 25th meetings in October and November 2013:
Unequal sharing of Multiple Frequency Network for
digital terrestrial television service by Asia
Television Limited and Television Broadcasts Limited
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The CA decided to impose a financial penalty of HK$200,000 each on Asia Television Limited (ATV) and Television Broadcasts Limited (TVB) for failing to share equally the transmission capacity in the Multiple Frequency Network (MFN), which contravened Special Condition 3.2 and Schedule 2(A)(ii) of their fixed carrier licences (FCLs).
ATV and TVB were assigned a total of three digital multiplexes to provide digital terrestrial television (DTT) services to the viewing public. Apart from each being assigned a Single Frequency Network (SFN) multiplex for their sole use, ATV and TVB were required under their FCLs to equally share the transmission capacity of one MFN multiplex for the digital simulcast of programmes in their four analogue free-to-air television channels.
With the CA's approval last year, ATV and TVB changed the video coding standard of the four simulcast channels in the MFN from MPEG-2 to the more efficient H.264 in October 2012. In this connection, TVB upgraded its Pearl and Jade channels from standard definition (SD) format to high definition (HD) format in October 2012 and March 2013 respectively. As evidenced by the monitoring records of the Office of the Communications Authority (OFCA), there has been an unequal use of the MFN transmission capacity between ATV and TVB since early this year, with TVB persistently using more than half of the transmission capacity in the MFN for broadcasting Pearl and Jade channels in HD format, while ATV continued to broadcast its Home and World channels in SD format. Investigation by the OFCA revealed that this arrangement was the subject of a commercial agreement between ATV and TVB without the prior consent of the CA as per the licence requirement.
The CA took a serious view over the unequal sharing of the transmission capacity in the MFN by ATV and TVB without the CA's prior approval. Spectrum is a scarce public resource. The MFN was assigned to ATV and TVB with no spectrum utilisation fee payable for the development of their respective DTT services. The statutory authority to allocate, assign and withdraw radio spectrum rests with the CA. There is as yet no Government policy on allowing spectrum trading in Hong Kong. Yet, ATV and TVB implemented the agreement and put into effect the adjustments to their respective transmission capacity without the authorisation of the CA, the statutory spectrum manager in Hong Kong, with the effect of trading the transmission capacity of the MFN between themselves for commercial benefit. In fact, their FCLs specifically provide for a mechanism whereby the licensees may seek approval from the CA for any changes in their MFN assignment, but ATV and TVB did not use that mechanism.
In view of the nature, severity and duration of the breach, the CA has decided to impose a financial penalty at HK$200,000 each on both ATV and TVB for the contravention. This is the maximum penalty that may be imposed under the relevant provision of the Telecommunications Ordinance (Cap. 106) (TO) on the first occasion of the breach. For details, please refer to the CA's Decision which is published on the CA's website (www.coms-auth.hk/filemanager/statement/en/upload/234/ATV_TVB_FinalDecision_20131112.pdf).
Meanwhile, ATV and TVB have jointly requested the CA to amend the terms of their FCLs so as to formalise their existing arrangement on unequal sharing of MFN. The application is under consideration by the CA separately.
Non-domestic television programme service licences
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The CA approved the applications by China Entertainment Television Broadcast Limited (CETV) and Turner International Asia Pacific Limited (Turner) for renewal of their non-domestic television programme service licences for 12 years, from October 1, 2013 to September 30, 2025 (both dates inclusive).
The CA also approved another application by GlobeCast Hong Kong Limited for renewal of its non-domestic television programme service licence for 12 years, from November 8, 2013 to November 7, 2025 (both dates inclusive).
Including these newly renewed licences, there are 18 non-domestic television programme service licensees in Hong Kong providing more than 200 satellite television channels targeting viewers in the Asia Pacific region.
Other licensable television programme service licence
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The CA approved the application by Swisscom Hospitality Hong Kong Limited for another licensable television programme service licence to provide television programme service to hotel rooms in Hong Kong. The period of validity of the licence is 12 years, from October 7, 2013 to October 6, 2025 (both dates inclusive). Following the issue of this licence, there are 27 other licensable television programme service licensees providing services to more than 90 hotels in Hong Kong.
Breach of licence condition by CETV and Turner
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The CA decided that CETV and Turner were in breach of Condition 10.1 of their respective non-domestic television programme service licences for non-compliance with the Licensee's Proposal regarding their shareholding and ownership structures. CETV and Turner had respectively implemented changes in their shareholding and ownership structures from December 31, 2010 to March 25, 2013 (in the case of CETV) and from December 31, 2011 to June 12, 2013 (in the case of Turner) without the requisite approvals of the CA. Taking into account the licensees' representations and the duration, severity and nature of the breach, the CA decided that CETV and Turner should be strongly advised to observe the relevant licence conditions.
Disruption of telecommunications services
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The CA considered the following two cases regarding disruption of telecommunications services:
(a) the mobile telecommunications services of China Motion Telecom (HK) Limited (China Motion) had two incidents of service outage on March 30 and April 9, 2013 respectively. Customers were not able to use any mobile services of China Motion (including voice services, short message services and data services) for around 13 hours in the first incident and four hours in the second incident. After considering the assessment of OFCA, the CA concluded that China Motion had not complied with General Condition (GC) 5.1 of its licence (i.e. to operate, maintain and provide a good, efficient and continuous service in a manner satisfactory to the CA). The CA decided to impose a financial penalty of HK$80,000 on China Motion. For details, please refer to the CA's Decision which is published on the CA's website (www.coms-auth.hk/filemanager/statement/en/upload/229/ChinaMotion_FinalDecision_20131112.pdf); and
(b) on May 13, 2013, there was a disruption of the telecommunications services of CSL Limited (CSL), which had affected around 20 000 of its mobile customers in the New Territories East for 110 minutes. The OFCA completed an investigation into the incident. After considering the assessment of OFCA, the CA concluded that there had been no breach by CSL of GC 5.1 of its licence which required it to operate, maintain and provide a good, efficient and continuous service in a manner satisfactory to the CA. For details, please refer to the CA's Decision which is published on the CA's website (www.coms-auth.hk/filemanager/statement/en/upload/230/CSL_FinalDecision_20131112.pdf).
Complaint cases
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The CA considered a complaint case against Hutchison Global Communications Limited (HGC) for breaching section 7M of the TO. The complainant alleged that HGC's salesperson had made misleading or deceptive representations in promoting the residential fixed telephone line and broadband Internet access services of HGC. According to the complainant, the salesperson alleged that the only way the complainant could unbundle HGC's telecom service charge from the property management fee was to subscribe to a separate service contract with HGC, but in fact it was not the case. Having considered the findings of the investigation conducted by the OFCA, the CA was of the view that HGC had engaged in misleading or deceptive conduct in breach of section 7M of the TO. The CA concluded that a financial penalty of HK$90,000 imposed on HGC was proportionate and reasonable in relation to the breach concerned. For details, please refer to the CA's Decision which is published on the CA's website (www.coms-auth.hk/filemanager/statement/en/upload/233/CentralParkTowers_FinalDecision_e.pdf).
In addition, the CA considered three public complaints against the television programme "Mark Six<Live>" broadcast on the Home Channel of ATV on June 20, 2013. The CA decided that ATV should be advised to observe more closely the relevant provisions in the Generic Code of Practice on Television Programme Standards (TV Programme Code). Details of the case are at www.coms-auth.hk/filemanager/en/content_713/appx_20131112_en.pdf .
Ends/Tuesday, November 12, 2013
Issued at HKT 16:43
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