Hong Kong proposed as most liberal TV market in Asia

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HONG KONG -- The Hong Kong government has proposed a total overhaul of the territory's broadcasting and telecommunications regulations, including abolishing a 9% royalty on the ad revenues of the two terrestrial broadcast networks.

Results of the 1998 Review of Television Policy were announced September 3 by the Hong Kong Special Administrative Region's secretary for information technology and broadcasting, K.C. Kwong.

The changes in the advertising and subscription royalty structure for TV program service licensees will put about $25 million a year back into the pockets of dominant broadcaster, Television Broadcasts Ltd (TVB).

According to TVB, the royalty payment in 1997 was $27 million. In 1996, this was $26.3 million.

In return, broadcasters will be asked to pay the full cost of license fee administration and regulation. This amounts to about $1.2 million a year for TVB alone, according to Stephen Chan, TVB's controller (program and external affairs division).

The 35 government proposals include lifting Wharf Cable TV's five-year monopoly on pay-television services; allowing fixed telecommunication network license holders to offer TV program services, including pay-TV and video-on-demand; allowing satellite broadcasters to begin offering pay-TV packages; allowing cable TV to offer telecommunications services; and licensing the territory's first direct-to-home satellite platform.

Other changes include relaxing ownership and investment restrictions on TV licenses, and replacing the existing transmission-based licensing and regulatory regime with a technology- and transmission-neutral structure. The four new categories proposed are: domestic free TV, domestic pay-TV, non-domestic and other licensable TV program services.

Apart from Wharf Cable TV, which declined to comment, broadcasters across the board welcomed the government's newly liberal attitude. Star TV's deputy chief executive officer Bruce Churchill said in a statement that the company "sees this as a move towards the right direction, bringing in more competition to the industry and more choice to the viewer."

The assistant general manager of TVB, Raymond Wong, called the government's proposals "encouraging".

If the government's recommendations are adopted, Hong Kong could become the most liberalized television market in Asia. This follows years of criticism over piece-meal ordinances and ad hoc regulations that characterized the broadcast environment.

The announcement will be followed by a public comment period until October 3. The long-awaited omnibus broadcasting bill is scheduled to be tabled before the territory's Legislative Council in 1999.

Copyright September 1998, Crain Communications Inc.

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