CO537-5142 — Page 57

We learn from Hong Kong's Sav ingram No.461 of 11th June, 1949 (90) and the Governor's letter of 14th June, 1949, to Mr. Sidebotham (92) that he is. concerned about the future of the Government Broad- casting Service. This is a separate issue from the question of using Hong Kong for broadcasting to China, in which the Foreign office is interested. It is a coincidence that it should have arisen at the same time as the external problem and it should be treated independently of that problem.

The reasons for the Governor's concern seem to be, in general, that (a) "the Colony is too small to support two broadcasting organisations" ((90) para.4); (The reference here is to the wire rediffusion service established earlier this year by a comercial company under licence from Government.)

(b)"Since we are going to be very short of money for the next few years what will happen will be that the service given by Rediffusion will get better and better, whilst that given by Government broadcasting will get worse and worse" ((92) para.1); and, in particular, that (c) the latest estimate of the cost of the new Studio premises and equipment, to which the Government is committed, has exceeded earlier expectation and budgetary provision, and is "far more than the Colony can afford to expend at the present juncture".

The extent to which the current estimate exceeds the provision made appears to be $135,000 (about £8,500), plus the cost of Air-conditioning and furnishing the new studios, of which an estimated cost is not specifically given.

The Governor canvasses three alternative remedies:-

(a) reducing the total capital cost of the new studios to the cost $150,000 or £9,500) for which Government can provide;

(b) handing over the broadcasting service to the commercial Company which already conducts the wire rediffusion service;

(c) continuing with the present service and current plans, subject,to the contribution by His Majesty's Government of the difference between the original estimate of $150,000 (about £9,500) and the final capital cost, which is estimated at $285,000 (about £18,000) plus cost of air- conditioning and furnishing, but in any case not exceeding a total contribution of $250,000 (about £15,600).

The Governor does not favour (a), which, he thinks, would give the service no better studios than it has at present. He would be willing to co-operate in (c). But he would prefer (b).

This proposal to hand over the broadcasting service to the commercial company needs to be considered both for its local implications and in the wider setting Colonial broadcasting policy. The Rediffusion Company is a subsidiary of Broadcast Relay Service (Overseas) Ltd., a British 'parent company with subsidiaries in certain other colonies. It could be relied upon, judged by experience elsewhere, to give a technically efficient service and to

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