LC Paper No. CB(1)426/98-99
(These minutes have been seen
by the Administration)

Ref : CB1/PL/ITB

Legislative Council
Panel on Information Technology and Broadcasting

Minutes of meeting
held on Saturday, 10 October 1998, at 8:30 am
in Conference Room A of the Legislative Council Building

Members present :

Hon SIN Chung-kai (Chairman)
Hon MA Fung-kwok (Deputy Chairman)
Hon Fred LI Wah-ming
Prof Hon NG Ching-fai
Hon James TO Kun-sun
Hon YEUNG Yiu-chung
Hon CHOY So-yuk

Members absent :

Hon Kenneth TING Woo-shou, JP
Hon David CHU Yu-lin
Dr Hon Raymond HO Chung-tai, JP
Hon Eric LI Ka-cheung, JP
Hon Howard YOUNG, JP
Hon Emily LAU Wai-hing, JP
Hon Timothy FOK Tsun-ting, JP
Hon LAW Chi-kwong, JP

Public officers attending :

Secretary for Information Technology and Broadcasting

Mrs Rita LAU
Deputy Secretary for Information Technology and Broadcasting (1)

Mrs Jessie TING
Deputy Secretary for Information Technology and Broadcasting (2)

Mr Eddy CHAN
Commissioner for Television and Entertainment Licensing

Director - General of Telecommunications

Director of Information Technology Services
Clerk in attendance :

Miss Polly YEUNG
Chief Assistant Secretary (1)3
Staff in attendance :

Ms Pauline NG
Assistant Secretary General 1

Ms Sarah YUEN
Senior Assistant Secretary (1)4
I Confirmation of minutes of meeting and matters arising
(LC Paper No. CB(1)244/98-99)

The minutes of the special Panel meeting held on 3 September 1998 were confirmed.

II Date and items for discussion for next meeting

2 Members agreed to discuss the following items at the next meeting to be held on Monday, 9 November 1998, at 2:30 p.m. -

  1. Follow-up to issues raised in the Policy Briefing by the Secretary for Information Technology and Broadcasting;

  2. 1998 Review of Fixed Telecommunications and 1998 Review of Television Policy - the Administration's response to concerns raised by non-government organisations; and

  3. Telephone charges of the Hong Kong Telecom.
3 In relation to 2(b), members noted the Secretary for Information Technology & Broadcasting (S/ITB)'s remark that the Administration would unlikely reach a firm decision on all the major policy issues covered in the two reviews at the time of the November meeting because the relevant consultation exercises had just concluded.

(Post-meeting note: At the request of the Administration and with the concurrence of the Chairman, 2(a) was subsequently replaced by "Film Development Fund", in respect of which a request for funds would be put to the Finance Committee at its meeting on 27 November 1998. Non-Panel Members were invited to join the meeting for discussion of this item.)

4 Members also decided to discuss the Chinese language interface at the Panel's December meeting.

III Briefing by the Administration on the Chief Executive's Policy Address 1998

(The information package on the Chief Executive's Policy Address 1998 circulated before the meeting by general despatch and the set of powerpoint presentation material on Hong Kong's information technology strategy tabled at the meeting and circulated to all Members thereafter vide LC Paper No. CB(1)309/98-99)

5 With the aid of power-point presentation, S/ITB briefed members on the major policy areas of the Information Technology & Broadcasting Bureau.

Broadcasting and film services

Film Development Fund

6 S/ITB and the Commissioner for Television and Entertainment Licensing reported that preparations were under way for the establishment of a $100- million Film Development Fund (the Fund) in 1999 to provide financial support to projects which were beneficial to the development of the local film industry. The Fund would be managed by the Film Services Office of the Television and Entertainment Licensing Authority (TELA). The Administration would consult the Film Services Advisory Committee (the Advisory Committee) comprising LegCo Members and industry representatives on the scope and administration of the proposed Fund. The outcome of consultation would be reported to the Panel before the relevant funding request was put to the Finance Committee.

7 While the Panel in general welcomed the Government's initiative to offer financial support to the local film industry, some members felt the Fund was too small as compared with other funds to be of any significant help. In response, S/ITB explained that the Fund would be used to sponsor worthwhile projects which could upgrade the industry's professional and technological standards and would not be used to subsidise the commercial production of films. The Administration considered the Fund sufficiently provided for to serve its intended purposes.

8 At members' request for details on the Fund such as its scope, application and vetting procedures, S/ITB reiterated the need to consult the industry through the Advisory Committee, which would meet in the following week, before finalising the detailed arrangements. As regards the vetting procedures, members noted the Government's initial thinking that a vetting subcommittee to be chaired by a Government official would be set up under the Advisory Committee to consider applications involving sums below a certain prescribed level. Applications for funds which exceeded the prescribed level would have to be approved by the Finance Committee following endorsement by the Advisory Committee.

Proposed Film Commission

9 As regards the establishment of a film commission advocated by the industry, S/ITB advised that whilst the Administration would welcome the setting up of such a commission by the industry itself, it would not consider setting up a designated commission as the Film Services Office under TELA was already providing support and assistance to the film industry.

The TV market

10 S/ITB reported that as of this date, the Administration had received 43 submissions on the 1998 Review of Television Policy.

11 On concerns about abuse of domination in the TV market by one broadcaster, S/ITB emphasised that although Television Broadcasts Limited was the only TV operator which was making profits, it did not necessarily imply that the company was abusing its dominant market position. He added that before the Administration could contemplate any action, it must be satisfied that claims of anti-competitive acts were substantiated with concrete evidence.

12 As regards the opening of the domestic free TV market, S/ITB pointed out that at present, there was insufficient frequency spectrum for the issue of further terrestrial licences. However, the introduction of a technology-neutral regulatory regime and the development of new technology would enable operators to use other forms of transmission to compete in this market. 13 In relation to competitive safeguards in the TV market, members noted that the Administration was in the process of reviewing the current legislation and would propose the necessary amendments to achieve a fair, open and technology-neutral regulatory framework.

Information technology (IT)

The IT Strategy Plan

14 Where Hong Kong's IT strategy was concerned, S/ITB highlighted that the overall objective was to enable Hong Kong to rise to the challenges posed by two major developments in information technology, namely, a globally connected world and digitalisation of information. Members also noted the IT Strategy Plan (the Plan), which was the Bureau's work schedule drawn up in response to members' request at the Panel meeting on 28 July 1998.

15 In reply to a member's request for elaboration on the Plan, S/ITB referred to one of the targets of "tackling the Year 2000 problem" and pointed out that as reported on a number of occasions, the progress was satisfactory and quarterly reports would be made to the Panel starting from December 1998. As for "development of Hong Kong as an Asia Pacific Internet content and traffic hub", the Government would try its best to provide an environment conducive to advances in the use of IT, as well as to promote understanding of IT and its applications. S/ITB nevertheless pointed out that in achieving some of the targets listed in the Plan, co-operation from the private sector was important.

Electronic service delivery (ESD)

16 Concerning details on the phased programme for the ESD, S/ITB advised that the Government's initial thinking was to co-ordinate and implement the programme by first establishing an information infrastructure with an open common interface through which the public could transact business with the Government via personal computers at home or in their offices, telephone, interactive TV and other access devices. Members noted that the Administration had received 44 submissions from the industry at an earlier expression of interest exercise and that the Administration would invite tenders from potential service operators in late 1998/early 1999. A decision on the choice of service operator would be made in mid-1999 with a view to introducing the first phase of ESD in 2000. With the launch of the first phase, S/ITB said that the public would be able to make on-line application for driving licences, lodge tax returns, effect tax and other payments to Government, and update personal and corporate information. Details on services to be covered in the second and third phases would be worked out after implementation of the first phase.

17 At the Chairman's request for a breakdown of the $173 million earmarked for launching the first phase of ESD, S/ITB explained that the sum was the estimated cost for the implementation of the first phase of ESD for which funding approval would be sought from the Finance Committee. The actual costs required would be ascertainable when the relevant tender was awarded.

Establishment of a Chinese language common interface

18 Regarding Hong Kong's role in liaising with the Mainland and Taiwan for the establishment of a common interface for the use of Chinese in electronic communication and data exchange, members noted that a working group under the International Standards Organisation (ISO) with representatives from the above three places was refining International Standard ISO 10646 with a view to developing a "unified Han" set of logographic characters for Chinese. Further details on the development would be provided for the Panel's December meeting.


An open and competitive market

19 A member queried whether it was appropriate to use the numbers of different service operators as indicators of an open and competitive telecommunications market. In response, S/ITB pointed out that there was a need to quantify progress in a tangible manner and the figures could at least reflect the progress made in opening the market. However, the Administration would welcome suggestions on other indicators.

20 S/ITB reported that a total of 36 submissions on the 1998 Review of Fixed Telecommunications had been received so far. In this connection, a member referred to media reports stating that the three fixed telecommunications network service (FTNS) operators would not make further investment if the Government decided to issue more FTNS licences, and asked the Government to elaborate on its stance in the face of such development. S/ITB emphasised that although the Administration was fully empowered to issue further licences if the three new FTNS operators' performance failed to bring about effective competition, it would nevertheless give due consideration to the proposals and commitments which they would be prepared to make on the roll-out of competitive networks. In this connection, S/ITB added that the operators concerned had to provide performance bonds for fulfilling their commitments. He further assured members that should the Government decide to further open up the market, it would require the new entrant(s) to provide roll-out commitments comparable to the best of the three new FTNS operators.

21 The meeting ended at 9:40 a.m.

Legislative Council Secretariat
9 November 1998