Panel on Broadcasting, Culture and Sport (Minutes) 6 Feb 98

Provisional Legislative Council

PLC Paper No. CB(2)1200
(These minutes have been
seen by the Administration)

Ref : CB2/PL/BCS

Provisional Legislative Council Panel on Broadcasting, Culture and Sport

Minutes of Meeting held on Friday, 6 February 1998 at 10:45 am in Conference Room A of the Legislative Council Building

Members Present :

Hon MOK Ying-fan (Chairman)
Hon MA Fung-kwok (Deputy Chairman)
Hon Henry WU
Hon CHAN Choi-hi
Hon YEUNG Yiu-chung
Hon NGAN Kam-chuen

Members Absent :

Hon David CHU Yu-lin
Prof Hon NG Ching-fai
Hon Mrs Selina CHOW, JP
Hon Howard YOUNG, JP
Hon Ambrose LAU Hon-chuen, JP
Hon Timothy FOK Tsun-ting

Public Officers Attending :

Item II
Mr CHAU Tak-hay: Secretary for Broadcasting, Culture and Sport
Mrs Rita LAU: Deputy Secretary (Broadcasting & Entertainment); Broadcasting, Culture & Sport Bureau
Ms Mimi LEE: Principal Assistant Secretary (Broadcasting); Broadcasting, Culture & Sport Bureau

Clerk in Attendance :

Mrs Justina LAM: Assistant Secretary General 2

Staff in Attendance :

Mr Colin CHUI: Senior Assistant Secretary (2) 2

I. Confirmation of minutes of meeting and matters arising
(PLC Paper No. CB(2)949)

The minutes of meeting held on 2 January 1998 were confirmed.

2. The Chairman said that the item of "Policy on promotion of cultural activities" proposed by Mrs Selina CHOW was originally scheduled for discussion at the meeting. However, as Mrs CHOW was unable to attend, the item would be deferred to the next Panel meeting.

II. Progress of the Review of the Television Environment in 1998
[Paper No. CB(2)933(01)]

3. The Chairman welcomed the Secretary for Broadcasting, Culture and Sport (SBCS) and his staff to the meeting. SBCS said that it was an appropriate time to discuss the matter as the Bureau had just issued a consultation paper - 1998 Review of the Television Environment - to invite the industries concerned to give views by 7 April 1998. A public consultation would then be carried out before recommendations were made to the Broadcasting Authority and the Executive Council. SBCS added that the Bureau's plan was to complete the review within 1998.

4.In reply to a member's question on whether more competition would be introduced, SBCS briefed members on the background leading to Government's decision to conduct a review in 1998. SBCS said that a licence to provide subscription television service was granted to Wharf Cable Limited in 1993. The company had a three-year exclusivity which ended in mid-1996. A review was conducted in early 1996 and the conclusion reached was that the pay TV market could not accommodate many new licensees, and complete deregulation would result in such severe competition that Wharf Cable would be forced out of business and as a result of which viewers' choice would be reduced. Although the Government had no obligation to ensure the business viability of the company, given the substantial capital investment made by the company, it was considered appropriate that the company should be given more time to establish itself before more competition was introduced.

5.SBCS added that the review's conclusion was agreed to by the former Executive Council. The decision not to grant more pay TV licences until after the 1998 Review was controversial as there were public views that Government should issue more licences for subscription television service so as to give television viewers a broader programme choice and enhance the quality of television programmes. The 1998 Review would examine among other things whether more licences for subscription television service should be issued.

6. SBCS further informed members that in 1996, the Government had also formulated a regulatory framework for the provision of video-on-demand (VOD) programme services. The Government took the decision that VOD programme services should be licensed under the Television Ordinance. This was in line with the policy objective of encouraging the exploitation of new technologies and enriching programme choice. Should VOD programme services be licensed in Hong Kong in, say, 1997/98, Hong Kong would be the first place in the world to have such services launched in commercial scale. SBCS added that Government's decision in 1996 was to issue two VOD programme service licences first, and review in 1998 whether the VOD market could be further opened up for more competition.

7. SBCS explained that as the review would be completed in 1998 and that any new licences would not be issued until 1999 the earliest, Wharf Cable Limited would have, by that time, enjoyed another two and a half years of exclusivity. Any decision not to issue more pay TV licences would have to be supported by very strong reasons. SBCS added that a very important factor to consider in the review would be the impact on rapid changes in technology. The development of digital technology, for instance, meant that it was now technically feasible to transmit a vast amount of images, sound and data using a limited spectrum capacity. The traditional definition of "broadcasting" was disintegrating as broadcasting, computing and telecommunications were converging at both technical and service levels. SBCS felt that it would not be appropriate to set artificial limits for the number of players and that it should best be left to market forces and technology to decide.

8. A member said that it was wrong and conservative of Government not to introduce more competition in 1996. He welcomed the review and urged that it be completed as soon as possible and not wait until the end of 1998. SBCS disagreed that the Government's policy back in 1996 was wrong. He explained that the television environment of today and that of 1996 were very different. Government's policy was appropriate given the market situation and technological developments at that time. However in view of the changes in the past two years, particularly in technological developments, he agreed that a new and broader view should be taken in the current review.

9. The Deputy Chairman said it was undesirable for one company to enjoy exclusivity to subscription television service for so long and that competition should be introduced. He also enquired about the state of play regarding the issue of a second licence for VOD programme service. SBCS responded that Government had adopted a prudent approach upon legal advice but the issue of the second licence needed not wait until the outcome of the court case involving Star iTV was known. SBCS informed members that the litigating parties (Star iTV and Future TV) were notified in December 1997 that the Government intended to resume consideration of Star iTV's application within 14 days. The 14-day notice had already expired and the Government had resumed consideration of Star iTV's application. The outcome of Star iTV's application would be publicly announced after the Executive Council had taken a decision.

In reply to the Deputy Chairman, SBCS said that separate licensing of content and carriage was one of the recommendations made in the report on a study of the broadcasting industry conducted by the Consumer Council two years ago. He said that VOD programme services were in fact regulated under separate licensing frameworks, with carriage regulated under the Telecommunications Ordinance and contents under the Television Ordinance. In the 1998 review, the Government would study the practicability of separate licensing of content and carriage in respect of other television services such as terrestrial, satellite and cable television services.

10. In response to the Chairman, Deputy Secretary (Broadcasting & Entertainment) (DS(BE)) responded that the consultative paper was issued to the telecommunication and broadcasting industries including all licensed terrestrial, satellite and cable television broadcasters, and companies which made use of satellite uplinking facilities provided by the Hong Kong Telecom International Limited for regional television broadcasting. The paper was also available on the homepage of the Broadcasting, Culture and Sport Bureau on the Internet. DS(BE) added that as the paper was only issued on 2 February 1998, responses had yet to be received.

11. Responding to a member on why public consultation was not conducted in parallel with the current consultation with industries concerned, SBCS explained that as many of the issues covered in the review were very technical, it would be more appropriate to adopt a step-by-step approach. As the review had been widely publicised and the consultation paper was available on the Internet, views from members of the public were also welcome. SBCS reiterated that comments and suggestions received would be analysed and incorporated in a public consultation document to be issued in summer 1998. Following public consultation, the Government would draw up the final recommendations for consideration by the Broadcasting Authority and the Executive Council.

III. Items for discussion at the next meeting

[Paper No. CB(2)933(03)]

The Chairman invited members' suggestions of items for the next meeting. He advised that in accordance with the Rules of Procedure of the Provisional Legislative Council, Panels would be required to submit reports to the Council. The tentative date for the Panel to table its report in Council was 1 April 1998. The draft Panel report would be included in the agenda for the next meeting scheduled for 13 March 1998.

12.Members agreed that the following items be discussed at the next meeting -

Policy on promotion of cultural activities;
(Item proposed by Mrs Selina CHOW)
Progress of the Arts Policy Review; and
(Item proposed by Mr CHAN Choi-hi)
Draft Panel report to the Council.

13. The meeting ended at 11:20 am.

Provisional Legislative Council Secretariat
12 March 1998