recognize that we must address the wider implications of satellite television, including how to exercise some control over advertising, programme content etc. for what is effectively television without frontiers. We must examine the possibilities for control of uplinking from Hong Kong in consider controls
systems. and
the ways indicated in paragraph 23 (c) above. We must carefully under exactly what conditions and with what we would be willing eventually to deregulate SMATV We must explore all the possibilities for regional international co-operation that look likely to lead to the formulation of a workable common approach to these problems. This we will do but the issue that is the subject matter of this paper is
an immediate one that must be resolved promptly. If speedy action is not taken, situations that we may not welcome are likely to be forced on us through default.
FINANCIAL IMPLICATIONS
25
There is a potential major loss to General Revenue if the cable television project founders and the royalty payments required under the terms of the franchise are therefore not forthcoming. At the time of the awarding of the franchise, it was estimated that over the franchise period of fifteen years, royalty payments could amount to $6.9 billion. In addition, there would be losses to General Revenue from the royalty payments by the wireless TV operators if their advertising are substantially affected by unregulated SMATV/satellite competition. SMATV systems and satellite TV operators are, of course, not required to make royalty or other similar payments.
revenues
But
Overtaken
by events
ECONOMIC IMPLICATIONS
channels.
26
We do not consider it would be in Hong Kong's long term economic interests if the cable TV and second telecommunications network project were to be allowed to fail.
The desirability of cable television was one of the conclusions reached in the 1986 report of the Broadcasting Review Board. Members accepted the Board's recommendation in favour
of cable television on the basis that it was the best means of catering for minority interests, which were being more or less ignored by the mass appeal off-air television For technical reasons, no other form of broadcasting can match cable television in terms of channel capacity, particularly in the Hong Kong environment, so cable television is the best means of delivering programming to minority ethnic and interest groups. HKCC in full operation will directly employ more than 2,000 Hong Kong people, creating in effect a new industry in Hong Kong and one which will make use of the most up to date fibre optic and other technology and should provide a new impetus to the creative aspects of broadcast programming.