TNAG-0350-FCO40-386-Future-of-broadcasting-in-Hong-Kong-1972 — Page 118

CONFIDENTIAL

3

XCC(72)24

6

This situation might be accentuated by the adverse effect on Rediffusion of an increase in TVB's permitted advertising times. The still increasing audience for wireless television is having a serious effect on Rediffusion which has reported a 26% fall in earnings over the period November 1971 - January 1972. This fall in earnings might be accelerated by an increase in TVB's advertising times to the point where Rediffusion might not wish to seek an extension of its existing licence which expires on 30th April 1973. If this should happen TVB would have a monopoly of all television for over one year at least.

7

Under these circumstances it is recommended for the consideration of Honourable Members that the decision in paragraph 1(e) above should not be put into effect until the next wireless television licensee commences broadcasting.

Cost of transmitting facilities

8

In recommendations 35, 38 and 39 the working party proposed that the second wireless television licensee should be required to bear the cost of establishing new facilities on transmitter and trans- lator sites and to reimburse TVB the cost of adapting to these new facilities. Provision was made for the second licensee to recover a proportion of this cost from subsequent licensees. As a result of the decision that tenders should be sought simultaneously for both the second and third licences and that no date should be specified for the commence- ment of operations, it is now necessary to provide that both the second and third licensees should be required to share this cost.

RECOMMENDATIONS REQUIRING SPECIFIC MENTION

9

It is considered that the following recommendations, all of which it is proposed should be adopted, need specific mention:

(a)

(b)

(c)

Shares (recommendation 7) - it is proposed that licensees should be required to have at least 25% of their voting shares listed and quoted on a recognised stock exchange within four years of the commencement of (or in the case of TVB, renewal of) a licence;

Technical considerations (recommendations 32-33) in order to provide for additional wireless television broadcasts a new frequency plan is proposed and as TVB will be required to incur expenditure on transferring to the new frequencies, it is proposed that, subject to the approval of the Finance Committee, TVB should be reimbursed by the Government;

Special services (recommendations 55, 60, 64) - it is recommended that the third licensee could be permitted to offer a specialised ser- vice (whether by pay-television or otherwise) as part of its normal service;

CONFIDENTIAL

wil they anyway