3. A member was concerned that a video-on-demand (VOD) programme service licensee, by offering scheduled and live programmes, would provide television services similar to those offered by the existing television broadcasters and therefore encroach upon their business.

4. Representatives of the Administration stressed that the regulatory system for television services sought to provide a level playing field facilitating fair competition and offering more choices for television viewers. The Government had consistently made it clear that it considered that VOD services would compete with existing television services. All television services competed with each other for viewers to some extent, regardless of the way the services were transmitted. The key consideration was that each type of licensed television service was clearly distinguished from the others by the mode of transmission. A VOD programme service would be provided by a point-to-point transmission at the request of the viewer and was different from point-to-multipoint transmissions of TV services by existing TV broadcasters. The definition of transmission on a point-to-point basis (Clause 3(2) of the Bill) required that point-to-point transmissions be independent of and separate from one another. Thus, a programme service licensee would not be permitted to provide point-to-multipoint services, and accordingly, it could not infringe the rights enjoyed by other TV broadcasters (not to mention the expiry of Wharf Cables right to exclusivity in May 1996).

5. Some members expressed concern that the proposed VOD programme service, from which live programmes would not be excluded, was different from that put forward in the consultation paper in 1996. The Administration pointed out that the Government saw no reason why the potential of VOD programme services should be limited to protect other broadcasters from legitimate competition. Although real-time (or near real-time) transmissions and simultaneous transmissions by VOD were theoretically possible, no technology was available to make this possible at the moment. Thus, it was unlikely that it could be commercially deployed before the review in 1998.

6. The Administration said that it would draw up obligations of a VOD programme service licensee later and stressed the importance of regulating all television services licensees under the same framework in the Television Ordinance to provide a level playing field to facilitate fair competition.

Timetable for the issue of VOD programme service licence

7. On the question of the number of VOD programme service licence(s) and the timetable for issuing the licence(s), representatives of the Administration said that it was proposed to issue two licences in order to facilitate the development of VOD and introduce competition amongst VOD programme services. The granting of the licence(s) would be subject to an open application procedure. After enactment of the Bill, the Government would issue specifications which would be available to any company intending to bid for the licence(s). Bidders proposals would be examined by the Broadcasting Authority which would forward its recommendations, together with all the proposals, to the Executive Council for a final decision on the granting of the licence(s). The Government aimed to issue the licence(s) before July 1997.

Licence fees for VOD programme service

8. In response to the Deputy Chairmans question, the Administration pointed out that the existing Regulations concerning advertising, programmes, licence fees and royalties in the Television Ordinance were considered to be relevant to the regulation of VOD programme services. The Regulation on advertising also had to be made applicable to subscription television. The draft Regulations (attached at Annex B to the LegCo Brief), when made, would extend these existing provisions to VOD programme service licensees and subscription television licensees, as appropriate. The draft Regulations would be submitted to the Governor for approval once the Bill had been enacted.

Use of fixed telecommunication network for transmission of VOD programme service

9. Representatives of the Administration, in reply to a members enquiry, pointed out that programme service licensees would be obliged to make use of one of the fixed telecommunications networks to transmit their service to subscribers, and any Fixed Telecommunication Network Service (FTNS) licensee transmitting a programme service would be obliged to transmit other programme services on the same terms and conditions.

Scope of the proposed regulatory framework

10. In reply to the question whether VOD programme service included transactional services, representatives of the Administration said that the proposed regulatory framework covered the provision of a programme service, i.e., the provision for transmission of television programmes (essentially the type of programmes that were being broadcast currently by the off-air and pay TV broadcasters) on a point-to-point basis and on the payment of a subscription. Under Schedule 1A of the Bill, transactional services were not considered as programme services and therefore not within the framework.

11. The Deputy Chairman asked the Clerk to furnish the deputations with the Administrations response to the views raised at the last meeting and invite them for further submissions, if any, on the Bill. The Clerk was also requested to provide the Bills Committee with a summary of deputations comments and the Administrations response.

Admin

(Post-meeting note: Letters to the deputations were issued on 29 January 1997 and the summary was circulated to members vide LegCo Paper No. CB(2) 1086/96-97(01).)

III. Dates of subsequent meetings

12. The next two meetings were scheduled as follows -

Date	Time	Venue
28 January 1997	4:30 pm	Conference Room B
18 February 1997	8:30 am	Conference Room B

(Post-meeting note: The meeting on 28 January 1997 was subsequently rescheduled to 30 January 1997 at 4:30 pm in Conference Room B.)

13. The meeting ended at 3:40 pm.

LegCo Secretariat
24 February 1997

Last Updated on 15 October 1997

Bills Committee on Television (Amendment) Bill 1996

Minutes of the 3rd Meeting held on Monday, 20 January 1997 at 2:30 pm in Conference Room B of the Legislative Council Building

I. Confirmation of minutes of meeting held on 19 December 1996

II. Meeting with the Administration

Encroachment on subscription television licences

Timetable for the issue of VOD programme service licence

Licence fees for VOD programme service

Use of fixed telecommunication network for transmission of VOD programme service

Scope of the proposed regulatory framework

III. Dates of subsequent meetings

Minutes of the 3rd Meeting
held on Monday, 20 January 1997 at 2:30 pm
in Conference Room B of the Legislative Council Building

Encroachment on subscription television licences