XN000022-1995-07-19 — Page 29

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Mr President, we are also aware that there is still potential for growth in Hong Kong's broadcasting industry, especially in the subscription TV market. Let me remind Members that it is our declared policy to deregulate the subscription TV market in Hong Kong after Wharf Cable's exclusivity ends on 31 May 1996. However, we do not want just to throw open the market to all. To do so would be acting irresponsibly as it is likely to create confusion and chaos. We should first assess what impact deregulation of the subscription TV market would have on the Hong Kong broadcasting industry as a whole and then decide how best the market should be deregulated in a structured and orderly manner, with minimal impact on both existing and potential broadcasters.

To do this, we have decided to carry out a major review with the help of an independent consultant. We expect this review to be completed in early 1996, in time for us to license new subscription TV broadcasters once Wharf Cable's exclusivity runs out. The important policy issues to be examined in the review include the following:

(a)

whether new subscription TV licences should be issued and if so how many should be issued and at what pace;

(b)

whether district based subscription TV licences within Hong Kong should be issued, and if so at what pace;

(c)

whether the existing cross ownership restrictions should be relaxed to permit existing TV licensees to branch out in the subscription TV business and vice versa;

(d)

what restrictions, if any, on a review of the foreign ownership should be imposed on existing and prospective broadcasting licensees;

(e)

whether SMATV operators should be allowed to provide subscription TV services;

+

(1)

whether the advertising ban on Wharf Cable should be lifted or only permitted on terms, and if so, on what terms;

(g)

whether new subscription TV licensees should be allowed to carry advertisements or only permitted on terms, and if so, on what terms;

(h)

what potential financial impact, if any, the de-regulation of subscription TV will have on existing broadcasters; and