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LCQ15: Progress of granting domestic free television programme service licences

     Following is a question by the Hon Frederick Fung and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (October 15):


     In October last year, the Chief Executive in Council approved in principle the applications of two organisations for a domestic free television programme service licence. It has been reported that one of these organisations indicated in August this year that it was still discussing with the Communications Authority the conditions and detailed provisions of the licence, but the progress was unsatisfactory. The organisation also criticised that "the regulatory framework required new operators to be subject to regulation which was far more stringent than that faced by existing licensees, in total disregard of the unparalleled advantages enjoyed by existing operators", thus rendering it difficult for the objective of opening up the free television market to be achieved. In this connection, will the Government inform this Council:

(1) of the latest progress of the authorities' issuance of formal licences to the aforesaid two organisations and the formulation of relevant codes of practice;

(2) given the fact that an existing free television broadcaster is currently dominating the market, whether the authorities will, when formulating the regulatory framework, consider implementing measures or arrangements that will provide a less stringent operating environment for the new operators at the initial stage; if they will not, of the reasons for that, and whether they have considered if this would make it impossible for the new operators to compete fairly with that existing television broadcaster in the short term; and

(3) of the earliest time the authorities expect under the present situation when the two organisations whose applications were granted approval-in-principle can start broadcasting?



     On October 15, 2013, the Government announced that the Chief Executive (CE) in Council had decided to grant approvals-in-principle to the applications for domestic free television programme service (free TV) licences from Fantastic Television Limited (Fantastic TV) and HK Television Entertainment Company Limited (HKTVE), subject to the CE in Council's further review and final determination under the Broadcasting Ordinance (BO) (Cap. 562) at the second stage.

     My reply to the three-part question is as follows:

(1) As understood, the Communications Authority (CA) has immediately proceeded with the follow-up work after the announcement of the aforementioned decision and required Fantastic TV and HKTVE to submit further information on a number of issues as follows:

i. updated free TV licence applications reflecting changes agreed since the first submission;

ii. further information, including statutory declarations, undertakings and legal opinions, for the purpose of verifying the corporate statuses of Fantastic TV and HKTVE after the proposed corporate restructuring; and

iii. confirmations and undertakings for the purpose of implementing other requirements imposed by the CE in Council when approvals-in-principle were granted in last October.

     Over the past few months, with its follow-up work entering into a later stage, the CA has been in more frequent negotiations with the two applicants. Specifically:

i. HKTVE, in response to the CA's request, confirmed with the CA in end of May 2014 that the corporate restructuring proposed in its application had been completed. The CA is now verifying whether HKTVE's corporate status after corporate restructuring can comply with the requirements under the BO that a free TV licensee shall not be a subsidiary of a corporation. Fantastic TV has not commenced the corporate restructuring proposed in its application. It was not until end of July 2014 that Fantastic TV submitted its new restructuring proposal to the CA, which is now following up with Fantastic TV;

ii. the CE in Council's approvals-in-principle were given and the CA's present follow-up work has been carried out on the basis of the application contents as at the time of the grant of the approvals-in-principle, including the proposals to deliver the free TV services via fixed networks. The two applicants, in response to the CA's request, confirmed with the CA in late June that the follow-up work for the applications would continue to be proceeded on the aforesaid basis;

iii. in relation to the confirmations and undertakings necessary for implementing the requirements as imposed by the CE in Council in granting the approval-in-principle last October and agreed by the two applicants, the CA has held several rounds of discussions with the two applicants and will continue to follow up; and

iv. in relation to proposed licence conditions in the draft licences issued to the two applicants on April 1, 2014, the CA has been continuously negotiating with them.

     As for the Codes of Practice, if Fantastic TV and HKTVE are formally granted the licences eventually, they are required to comply with all the Generic Codes of Practice on Television issued by the CA, which clearly set out the standards on programme, advertising and technical matters for free TV licences.

(2) In announcing the grant of approvals-in-principle to Fantastic TV's and HKTVE's applications, the CE in Council has expressed clearly that any new free TV entrants should be subject to more or less the same licence conditions as applicable to the incumbent licensees. However, considering that the potential new free TV licensee(s), unlike the incumbents, would not make use of frequency spectrum to deliver the proposed free TV services, the CA has adopted a more relaxed approach in handling certain licence conditions (for instance, in relation to the positive programme requirements).

(3) I believe that the CA will continue to actively see to the follow-up work with Fantastic TV and HKTVE, with a view to responding to the keen public expectations of an early introduction of new free TV services. Upon receipt of recommendations from the CA, the CE in Council will make the final determination.

Ends/Wednesday, October 15, 2014
Issued at HKT 15:00


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