XN000022-1996-07-02 — Page 5

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Those on-line information and multi-media services which do not constitute television programmes will not be regulated under the Television Ordinance.

Mr Chau also disclosed that following careful consideration of the points made by ATV and TVB, the Government was prepared to reduce the rate of royalties charged on advertising revenue to the two companies from 10 per cent to nine per cent, with adjustments to the marginal bands that will be particularly beneficial to ATV.

"On this basis, TVB's 1995-96 royalty payments would have been reduced by almost $20 million, while those of ATV would have fallen by about $45 million," Mr Chau said.

"The proposals will be put to the Legislative Council as part of a package, including the re-introduction of full-cost fees, immediately after the reduced royalties come into force."

As regards the restrictions on the ownership and control of licensees under the Television Ordinance, including VOD programme service licensees, the Secretary said these would remain basically unchanged.

The present categories of "disqualified persons" under the Television Ordinance will be retained, although companies transmitting sound or television material will be allowed to apply for any licence under the ordinance, provided they are not otherwise disqualified.

This will allow telecommunications companies and regional satellite broadcasters to bid for licences; by the same token, domestic licensees will no longer be excluded from exercising control of regional satellite broadcasters.

Mr Chau also said the specific restriction on Hong Kong Telecom holding a pay TV licence would be lifted, but it would not be allowed to gain control of the existing pay TV licensee.

Newspaper owners will be added to the list of disqualified persons, although those who would become disqualified in respect of shareholdings as at March 26 (when the Government's proposals were published) will be exempted from this restriction, provided that they have not increased their holdings after that date.

Both the initial pay TV licensee and any future pay TV licensees would be permitted to carry advertising, and would pay royalty on advertising revenue, Mr Chau added.

End