XN000022-1996-07-02 — Page 4

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Proposal to issue two VOD licences approved

The Governor-in-Council has endorsed proposals to issue two video on demand (VOD) programme service licences, but not to issue any additional pay television licences pending a review of the TV environment in 1998.

The proposals were made by the Broadcasting, Culture and Sport Branch following public consultation earlier in the year on the regulation of VOD and the deregulation of the pay TV market.

Announcing the endorsement today (Tuesday), the Secretary for Broadcasting, Culture and Sport, Mr Chau Tak-hay, said the Government's preference would have been to deregulate the television market as soon and as thoroughly as possible.

"But we felt constrained to take account of the present circumstances of the television market," he said.

"Allowing additional pay TV operations could render the present licensee financially unviable, and that would not be in the best interests of Hong Kong in general, or subscribers in particular."

The two VOD programme service licences will be offered once the Television Ordinance has been amended to provide a framework for television services using VOD technology. The Government aims to introduce an amendment bill to the Legislative Council in the next session.

Mr Chau believed that it was fair to regulate this new means of delivering television service in the same way as other television services, that was, they would be subject to the same restrictions on ownership and control, and they would also pay royalties in respect of subscription and advertising revenues.

The Broadcasting Authority will devise new codes of practice for VOD programme services which can be more flexible than other codes, where this is warranted.

The Telecommunications Authority will be empowered to determine the terms and conditions of interconnection between VOD programme service licensees and the networks of fixed telecommunication network licensees.