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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 49th meeting in January 2016:
Joint request by China Mobile Hong Kong Limited
(CMHK) and Hong Kong Telecommunications (HKT)
Limited (HKT) to swap part of their assigned
frequency spectrum in 2600 MHz band
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The CA approved the joint request of CMHK and HKT to swap with each other the following frequency blocks of 2 x 5 MHz each (Proposed Swap).
(a) 2550 - 2555 MHz paired with 2670 - 2675 MHz (2 x 5 MHz) currently assigned to HKT; and
(b) 2530 - 2535 MHz paired with 2650 - 2655 MHz (2 x 5 MHz) currently assigned to CMHK.
Following the swap, the mobile network operators (MNOs) would each have a contiguous frequency block of 2 x 20 MHz in the 2600 MHz band.
Currently HKT has a single contiguous frequency block of 2 x 20 MHz while CMHK has two separate frequency blocks of 2 x 15 MHz and 2 x 5 MHz respectively in the 2600 MHz band. CMHK and HKT submitted a joint request for the Proposed Swap to the CA in order to remove the fragmentation of CMHK's assigned spectrum in the 2600 MHz band with a view to achieving the technical benefits including increased spectral efficiency and therefore also improve service quality.
Having considered the detailed assessment of the Office of the Communications Authority (OFCA), the CA is of the view that the Proposed Swap will result in more efficient use of the radio spectrum, a scarce public resource, and should be encouraged. Consumers will also benefit from improved service quality, and a choice of another competitive Fourth Generation MNO. The CA therefore decided to grant its approval subject to a number of conditions imposed, including that there should be no monetary exchange between the two MNOs in effecting the Proposed Swap. 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/351/ca_statements20160114_en.pdf) today (January 19).
Approval for HK Television Entertainment Company
Limited (HKTVE) for using spectrum as an
additional transmission means and a unified
carrier licence (UCL) for the transmission of
its spectrum-based free TV service
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The CA approved, pursuant to Conditions 10.2 and 30 of the domestic free television programme service (free TV) licence of HKTVE, HKTVE's application for using spectrum, on top of fixed network, as an additional means of transmission for the delivery of its licensed free TV service. The CA also approved HKTVE's application for a UCL under the Telecommunications Ordinance (Cap. 106) (TO) for the transmission of its spectrum-based free TV service.
In April 2015, the Government granted a free TV licence to HKTVE to provide free TV service in Hong Kong by using a fixed network as its transmission means as per the proposal in its licence application. HKTVE is required to launch its licensed free TV service by a fixed network by March 31, 2016. Following the grant of its licence, HKTVE applied to the CA in accordance with Conditions 10.2 and 30 of its free TV licence to use spectrum, on top of its fixed network, to transmit its licensed free TV service.
The CA announced on July 31, 2015 that it was prepared to approve HKTVE's application for using spectrum as an additional transmission means assigned to HKTVE, subject to the agreement of HKTVE to comply with all the additional conditions the CA imposed which were pertinent to spectrum assignment for the provision of licensed free TV services, and to assign to HKTVE half of the transmission capacity of a Multiple Frequency Network (MFN) multiplex to be withdrawn from Asia Television Limited (ATV) with effect from April 2, 2016, for the provision by HKTVE of its licensed free TV service. The spectrum assignee of the other half of the MFN multiplex is Television Broadcasts Limited (TVB), for the provision of its spectrum-based free TV services. The CA considered that it would be in the viewers' interest for spectrum to be assigned to HKTVE so that it might achieve the same level of coverage as TVB, the only spectrum-based free TV licensee, more readily following service launch by March 31, 2016, hence providing more programming choices more expeditiously to many more Hong Kong households. To effect the aforementioned spectrum assignment, HKTVE was invited to submit an application for a UCL. In response, HKTVE submitted its UCL application on September 22, 2015.
Having carefully considered the submissions of HKTVE, including its agreement to comply with all the additional conditions the CA imposed, the CA decided to approve HKTVE's application for using spectrum as an additional transmission means on the condition that:
(a) HKTVE would be subject to largely the same set of programme requirements including the positive programme and subtitling requirements (www.coms-auth.hk/filemanager/en/content_713/appx_20160119a_en.pdf) that currently apply to the spectrum-based free TV licensees (Note 1) when the proposed transmission arrangement comes into effect;
(b) HKTVE would comply with an updated investment plan of $1,532 million for 2015 to 2021 (Note 2) when the proposed transmission arrangement comes into effect; and
(c) on top of the bond sum of $7 million in respect of service coverage specific to network-based transmission stipulated under its free TV licence, HKTVE would provide an additional performance bond of $3 million in respect of the service coverage specific to HKTVE's spectrum-based transmission, which would be incorporated into its UCL to be granted by the CA under the TO.
The additional conditions imposed by the CA are to ensure that HKTVE, upon using spectrum as an additional transmission means, would operate in more or less a level playing field as the spectrum-based incumbent free TV licensees. This approval granted by the CA, with additional conditions imposed in relation to spectrum assignment, would not obviate HKTVE's responsibility to fulfil the obligations and commitments currently applicable to it in connection with the use of a fixed network to transmit free TV service under its free TV licence.
In respect of HKTVE's application for a UCL for the transmission of its spectrum-based free TV service, the CA has examined the technical and financial information submitted by HKTVE and decided to issue to HKTVE a UCL to effect the concerned spectrum assignment, subject to its payment of the relevant licence fees and submission of a performance bond of $3 million in respect of the service coverage specific to HKTVE's spectrum-based transmission as mentioned above. The validity period of the UCL shall be 15 years from the date on which it is issued, while the assignment of the broadcasting spectrum shall be from the date when the broadcasting spectrum to be withdrawn from ATV becomes available to the end of the term of HKTVE's free TV licence on March 31, 2027.
Since HKTVE would be sharing the use of the MFN multiplex with TVB from April 2, 2016, OFCA has maintained contact with the two free TV licensees, encouraging them to expedite their discussions on the interconnection and facility sharing arrangements with a view to ensuring timely preparation for their shared use of the MFN multiplex to deliver their respective licensed free TV service immediately after the withdrawal of the concerned spectrum from ATV.
Non-payment of licence fees of the free TV licence
and fixed carrier licence (FCL) by ATV
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The CA considered a case of non-compliance of ATV with the relevant statutory and licence requirements arising from its failure to pay the fixed fee of its free TV licence for the period from December 1, 2015 to April 1, 2016 and the annual fee of its FCL for the licence year 2015/2016 in accordance with the stipulated deadlines.
Under the Broadcasting (Licence Fees) Regulation (Cap. 562A) (Broadcasting Regulation), ATV shall pay to the CA the fixed fee of its free TV licence not later than 14 days after the commencement of the licence year (i.e. by December 15, 2015). Under the Telecommunications (Carrier Licences) Regulation (Cap. 106V) (Telecommunications Regulation), ATV shall pay the annual fee of its FCL on the anniversary of the issue of the licence (i.e. on December 1, 2015). ATV failed to settle the above-mentioned fees by the deadlines stipulated in the relevant Regulations. Despite the issue of reminders by OFCA to ATV, to date, ATV still has not made payment for the outstanding licence fees.
Having considered the circumstances of the case and the representations of ATV, the CA considered that ATV's failure to settle the licence fees by the deadlines stipulated in the relevant Regulations was a clear breach of the statutory and licence requirements on licence fee payment. The CA took a serious view over the contravention of ATV, as payment of licence fee was a fundamental duty of a licensee and this had already been the third breach of ATV of the same provisions in a space of four years. In view of the severity, repeated nature and duration of the contraventions, the CA decided that:
(a) a financial penalty of $100,000 should be imposed on ATV for its breach of Condition 14.1 of ATV's free TV licence, section 13(1) of Schedule 4 to the Broadcasting Ordinance (BO) (Cap. 562) and section 3(1) of Schedule 1 to the Broadcasting Regulation; and
(b) a financial penalty of $100,000 should be imposed on ATV for its breach of General Condition 4.1 of ATV's FCL and sections 1 and 3 of Part 1 of Schedule 3 to the Telecommunications Regulation.
The CA also decided to reject ATV's applications dated December 3 and 15, 2015 for paying the outstanding licence fees by instalments. Taking into account its representations, the CA directed ATV to settle the outstanding licence fees together with the interests incurred in two instalments, by February 18 and March 18, 2016 respectively. The CA has put ATV on notice that any failure of ATV to comply with the said directions to pay the outstanding licence fees and interests according to the specified timeframe may result in the CA imposing stiffer sanctions on ATV, including invoking the licence suspension procedure under section 31 of the BO.
Non-compliance with statutory requirement on
advertising time limit by TVB
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The CA decided that TVB was in breach of section 11(1) of Schedule 4 to the BO in exceeding the statutory advertising time limit of 10 minutes per clock hour by 84 seconds and 16 seconds respectively in the clock hours of 5pm to 6pm and 6pm to 7pm on August 8, 2015 on I News Channel. The CA noted that the lapse was caused by the long duration of a live programme which pre-empted the advertising break originally scheduled and resulted in a postponement of the advertising materials that followed. Having regard to TVB's submission that the lapse was unintentional, and that TVB had taken the initiative to report the lapse and undertook to make its best efforts to observe the relevant requirement, the CA decided that TVB should be advised to observe more closely the relevant requirement.
Broadcast Complaints
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The CA also considered a complaint case against the television programmes "News Report" and "News at 6:30" broadcast on the Jade and I News Channels of TVB and on the TVBN Channel of TVB Network Vision Limited (TVBNV) on October 24, 2015. The CA decided that both TVB and TVBNV should be warned to observe more closely the relevant provisions in the Generic Code of Practice on Television Programme Standards. Details of the case are at: www.coms-auth.hk/filemanager/en/content_713/appx_20160119b_en.pdf .
Note 1: The conditions of HKTVE's current free TV licence are premised upon the use of a fixed network as its transmission means. Specifically, the programme requirements imposed on HKTVE (such as the positive programme and subtitling requirements) are the same as those that applied to the spectrum-based free TV licensees before the mid-term review of their licences in 2010. Such requirements are less onerous than those currently apply to the incumbent free TV licensees which employ spectrum as a means of transmission.
Note 2: The original investment plan of HKTVE for the same period amounts to $1,393 million.
Ends/Tuesday, January 19, 2016
Issued at HKT 18:53
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