Annex B
7
RESOLVING THE SMATV ISSUE IN HONG KONG
7.1
Introduction
The HutchVision proposal for the introduction of SMATV in Hong Kong seeks to reconcile the interests of the prospec- tive cable and satellite programming service operators in the best interests of the viewing public and of Hong Kong itself. It is therefore based on the premise that both cable and satellite television must be made available in Hong Kong within the shortest practicable time-frame, and that both services must be introduced in such a manner as to ensure that consumer choice is enhanced; the rule of law is respected; industrial and technological benefits to Hong Kong are secured; the territory's image as a competitive market-driven economy is maintained; and its position as an advanced cosmopolitan world centre is reinforced.
The pro- posal seeks to draw upon the experience in Canada and the United Kingdom in dealing with similar issues, in a manner that keeps regulatory distinctions, prohibitions and inter- vention to the absolute minimum. As noted, Canada and the UK are the two countries with the most developed regulatory regimes for SMATV of any in the world.
The HutchVision proposal consists essentially of three basic propositions. The first is that there are only two types of satellite receiving system that need to be recognised for regulatory purposes: one consisting of "private" systems, the other of "commercial" systems. The second is that the former should be exempt from licensing whereas the latter should be licensed. Thirdly, prior to licensing an indepen- dent commercial SMATV system, the cable operator should be granted a right of first refusal to offer the same service as that proposed by the commercial SMATV applicant, on the same terms and conditions. These propositions are discussed in turn.
7.2 "Private" versus "Commercial" SMATV systems
SMATV systems may be defined as systems consisting of an antenna or antennae capable of receiving television program- ming transmitted by satellite and simultaneously redistrib- uting such programming for reception by one or more households. Private SMATV systems may be defined as those which satisfy the criteria for exemption from licensing set out in the next section. Commercial SMATV systems may be defined as those SMATV systems which do not qualify for exemption. Typically, their failure to qualify would be due to their charging a subscription fee for service.
It should be noted that in the definition of private SMATV systems no distinction is drawn between TVRO and SMATV sys- tems. As a legal matter, since current Hong Kong legisla- tion effectively prohibits satellite reception by both TVRO and SMATV systems, it would seem particularly appropriate to legalise the two systems simultaneously. The two are in