TNAG-0350-FCO40-386-Future-of-broadcasting-in-Hong-Kong-1972 — Page 117

XCC(72) 24

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(i)

CONFIDENTIAL

- 2.

that no public announcement on Government's policy with regard to the future of wireless television be made pending the action con- templated in (h) above, which should be as soon as possible.

Memorandum XCC(72)14 proposed acceptance of all the remaining recommendations made by the working party with the exception of those concerned with wired television, royalty and television weather broadcasts. Certain of these remaining recommendations require modi- fication following Council's decision recorded in paragraph 1 above and only these recommendations, other recommendations which may be considered controversial or of particular importance and those con- cerned with royalty are discussed in this memorandum. With the exception of recommendations relating to television weather broadcasts and wired television, which will be considered in a further memorandum, it is proposed that all the remaining recommendations not specifically mentioned in this memorandum should be adopted..

RECOMMENDATIONS REQUIRING MODIFICATION

Advertising

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Council's decision that permitted advertising times be increased from seven minutes to ten minutes in any one hour is noted in paragraph 1(e) above. Consideration is now given to the date on which the new condition should be brought into force.

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The working party's recommendation concerning the relaxation of permitted advertising times was made in the expectation that a second wireless television licensee would commence broad- casting shortly after the expiry of TVB's monopoly on 18th November 1972. However, a recent appraisal of the procedures that need to be completed before the next wireless television licensee commences broadcasting indicates that, following a tender procedure for both the second and the third wireless television licences, a reasonable date on which the next wireless television licensee could be expected to begin operations (assuming for the moment that Rediffusion will be one of the successful tenderers) would be about the middle of 1974.If, how- ever, Rediffusion should not be successful it is possible that there would not be a wireless television competitor for TVB before the latter half of 1975.

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qbierowo sami dua

This time-table indicates that TVB's statutory monopoly of wireless television which ends on the renewal of the company's licence on 19th November 1972 will, in practical terms, be extended for at least a further 11⁄2 years. If TVB's permitted advertising times were to be increased with effect from the renewal of its licence the financial advantages that would flow from this concession coupled with the exten- sion of its monopoly would put TVB in a strong position which it could use to advantage in negotiating forward contracts for advertising, the supply of programmes and performers. Such action on the part of TVB would affect the competitiveness of future wireless television licensees and undermine the fundamental principle of free competition which underlies the policy for the future of television.

CONFIDENTIAL