Speeches and Presentations



SCED's opening remarks at press conference on new domestic free television programme service licences

Following is the opening remarks by the Secretary for Commerce and Economic Development, Mr Gregory So, at the press conference on new domestic free television programme service licences today (October 15):

Now I would like to summarise in English what I have just said.

Today, I would like to share with you the latest development in respect of the free television programme service (free TV) licence applications. Hong Kong Television Network Limited (HKTVN), Fantastic Television Limited (Fantastic TV) and Hong Kong Television Entertainment Company Limited (HKTVE) earlier submitted applications for the domestic free TV licences under the Broadcasting Ordinance (Cap. 562) (BO). The former Broadcasting Authority (now the Communications Authority) (the Authority) processed these applications in accordance with the BO and established procedures.

Having carefully considered an array of relevant factors, including the free TV licence applications submitted by the three applicants, the recommendations of the Authority, statutory requirements under the BO, the assessment criteria in the Authority's "Guidance Note for Those Interested in Applying for Domestic Free Television Programme Service Licences in Hong Kong", the overall sustainability of the free TV market, the consultant's reports on the competition implications of new entrants to the local free TV market (which include an assessment of the relative competitiveness of each applicant), all relevant documents, all representations and responses submitted by the relevant parties, all the relevant latest developments, all public views received and the Government's prevailing broadcasting policy, the Chief Executive (CE) in Council has decided that it would be in the public interest to adopt a prudent approach to introduce new operators into the free TV market in a gradual and orderly manner (the "Gradual and Orderly Approach"). On this basis, the CE in Council has decided today to grant approval-in-principle to Fantastic TV's and HKTVE's free TV licence applications, while not precluding the possibility of allowing more free TV operators as and when appropriate. This decision is not only in line with the Government's established broadcasting policy to introduce competition and increase programme choice and diversity, but at the same time minimises the risk of any possible adverse impact on the free TV market as a whole.

Under the Gradual and Orderly Approach, the CE in Council, in deciding whether to grant approval-in-principle to each of the free TV licence applications, has assessed the free TV licence applications against various objective assessment criteria. These criteria include financial capability, the programming investment, programming strategy and capability and technical soundness of the proposed service. Having regard to these criteria and all relevant factors (including representations from the applicants and public interest), the CE in Council has decided to grant approval-in-principle to Fantastic TV's and HKTVE's free TV licence applications, subject to CE in Council's further review and final determination of the applications at a later stage, whereas HKTVN's free TV licence application is rejected.

According to Fantastic TV's and HKTVE's proposals, they will provide a total of two television channels (i.e. one for each) within 12 months after the grant of licences. Fantastic TV will invest over $1 billion in the initial six years from the launch of the proposed service whereas HKTVE will invest over $600 million in the initial three years from the launch of the proposed service. We believe that Fantastic TV and HKTVE, if formally granted the free TV licences at a later stage, will facilitate the bringing in of additional investments into local programme production. This will not only provide more programme choices for the audience, but also create more job opportunities in the creative industries.

This is the first time in nearly four decades that more competition is introduced to the free TV market. If Fantastic TV and HKTVE are finally granted a free TV licence, the decision made today can enable the number of free TV licensees to double to a total of four. We believe the availability of significantly more programming choices as a result will be welcomed by Hong Kong people.

The draft licences for Fantastic TV and HKTVE will contain general terms and conditions similar to those of the licences held by existing licensees, with specific provisions relevant to the two applicants. As the next step, the draft licences will be prepared, and the relevant parties will be requested to submit necessary information. The Communications Authority will then further review Fantastic TV's and HKTVE's applications and submit to the CE in Council a recommendation on whether a licence should be formally granted under the BO to each of them. The CE in Council has the discretion whether to formally grant a licence to each of Fantastic TV and HKTVE by then.

We are happy to take your questions now.

Tuesday, October 15, 2013