48
The Administration does not consider it necessary to inform or to consult the Chinese on the liberalisation of the industry and the granting of franchise(s) in 1995 as these are matters which fall within the internal administration of Hong Kong. Any initiative to consult the Chinese could jeopardise Our general position on the granting of franchises/contracts extending beyond 30 June 1997 as set out in paragraph 10 of XCX (88)37. However the PRC Government will be consulted if this Government were to commit the Special Administrative Region Government before 1997 to an extension of the CWHK franchise beyond 2006.
Public Reaction
49
the
There is likely
likely to
to be considerable public interest in the proposals to prohibit Telco from providing the cable television network and to limit HK Telecom's interest in the cable television licensee(s). The business community is expected to support
Government's underlying pro-competition stance, although there may be criticism that Government is being overly restrictive with respect to Telco and HK Telecom. The general public will welcome assurances that tariffs will not be exposed to the risks posed by the cable television .venture. Concerns will remain as to the possible extra disruption from the installation of a non-Telco cable television network.
television network. Some informed members of
the public may press for publication of the consultancy
report.
Publicity
50
If Members endorse the recommendations, a press release will be issued stating that following consideration of the consultancy report by the Executive Council, the Government has decided to exclude Telco from providing the cable television network in order to diversify the ownership of local networks, encourage competition in network provision and non-franchised services, and protect telephone tariffs arising from the risks involved in the cable television venture. The proposed prohibition on HK Telecom group's ownership of the cable television licensee(s) will also be explained. The press release will emphasize the consultants' finding that the extra disruption arising from the installation of a non-Telco cable television would be insignificant. Regarding the Telco and CWHK franchises, the press release will make it clear that Government does not intend to terminate these franchises before their due date, but the Administration will keep under review the need and scope for further liberalization of telecommunications services having regard to
to its contractual
contractual obligations. In accordance with the terms of the local franchise, a review will be conducted with HK Telecom in 1990 to determine the future of the basic voice telephone franchise.
CONFIDENTIAL