GALAXY SATELLITE BROADCASTING LIMITED

comments on

1998 REVIEW OF TELEVISION POLICY

CONSULTATION PAPER

dated

3 September 1998



prepared for





LegCo Panel on Information Technology and Broadcasting


21 September 1998

1 Introduction

1.1Galaxy Satellite Broadcasting Limited is pleased herewith to have the opportunity to express to the LegCo Panel on Information Technology and Broadcasting the company views on the policy initiatives proposed by the Hong Kong Government in association with its 1998 Review of Television Policy and as set forth in the Consultation Paper of 3 September 1998.

2 Offering Uplinking Services (Paragraph 6.4)

2.1Galaxy enthusiastically supports the Government proposal to allow satellite broadcasting licensees to provide commercial uplinking and downlinking services to third parties when the Hong Kong Telecom exclusivity expires on 1 January 2000. We anticipate the allowed services will include:

    íP Audio, video and data
    íP Full-time and occasional feeds
    íP Uplinking and downlinking services

2.2We believe this opening and broadening of the market will result in better, more and cheaper services, and an enhanced competitive position for Hong Kong in the region.

3 Pay Television Services [Paragraph 9.5 (b) and (c)]

3.1We believe the Government proposal to deregulate pay television services is the right policy. In order to stimulate industry growth and increase viewers' choices, the Government should allow satellite broadcasters to offer pay television services in Hong Kong based on an impartial evaluation of the merits of the proposed services. This, we believe, will be the quickest, most efficient way to roll out these new subscription services. Satellite broadcasting licensees should be freely allowed to market their pay television services in Hong Kong and to sell, rent and install the reception equipment and decoders required by the viewer.

3.2Installation of hardwire networks for cable and VOD is a laborious, time-consuming and very expensive endeavor. Clearly the preferable way to further open the pay television market in Hong Kong is to rely on the immediate market access satellite technology makes possible. To accomplish this, we believe, the Government should, as they are generally proposing, open up the pay TV market to satellite broadcasters.

4 Direct-to-Home Satellite Television Services (Paragraph 10.1, 10.3 & 10.4)

4.1We welcome the Government's proposals to encourage and open up the develop of direct-to-home television services for Hong Kong. However, the scope of these services should not be limited to just the four broadcasting satellite service (BBS) channels allocated to Hong Kong by the International Telecommunication Union. If only these four channels are licensed for DTH services in Hong Kong, the company obtaining the license to launch and operate the satellite providing these channels will have monopoly power in the marketplace, which will not be in their interests either of DTH programme service providers or consumers. Since satellite transponders that can service Hong Kong are freely available, we believe the Government should let the industry choose from available, freely competing transponder service providers.

4.2If, as stated in the Consultation Paper, it is the Government intention to allow satellite broadcasters to offer pay television services in Hong Kong as it is the most efficient and quickest route for starting new subscription television services", then, by the same logic, we believe existing satellite broadcasting licensees should be freely allowed to operation pay television services by means of DTH satellite broadcasting technology, subject, of course, to the relevant regulatory controls and codes of practice. To ensure that future DTH service providers are able to operate and compete on a level playing field, we believe that all DTH service applicants, including each of the existing satellite broadcasting licensees, should be treated equally in the license application process.

5 Fees and Charges (Part XII)

5.1We agree with the Government's proposal to abolish the existing policy of imposing royalty charges on broadcasting licensees and, instead, apply the full-cost recovery license fee. The Government's proposal in this regard is supported by the fact that the television broadcasting industry in Hong Kong has presently already been deregulated to the extend that no exclusive rights now repose in any one broadcasters. We believe the Government's proposal to abolish royalties will help to create a healthy and more competitive environment for Hong Kong's television industry.