TNAG-1779-FCO40-2539-Hong-Kong-international-telecommunications-1988 — Page 29

XCCI (88)46

Page

4

Presentational Implications of Options B and C

Option B

6

Option B has the immediate presentational advantage of allowing the CTHK proposal to use a Telco supplied network to be considered on its own merits. However, it is important that the cable television proposals should at the very least be judged against strong

a

for preference non-Telco cable

cable television network. The CTHK/Telco network proposals, therefore, could be considered handicapped, although they would not be excluded.

Option C

7

telecommunications

a

The fundamental presentational difficulty of Option C is the exclusion of Telco, which could be perceived as being contrary to the spirit of free enterprise and unfair to Telco. In addition, there is the

the claim that Option C jeopardises CTHK's proposals. We recommend that it be stressed

stressed that no monopoly exists at present on non-franchised services other than the de-facto one arising from Telco's

from Telco's ownership of

of the sole physical network. Το achieve diversification of ownership, therefore, Telco must be excluded. Telco is welcome to keep its share in CTHK as a broadcaster.

8

If a defensive position is required on Option C, the following points can be made

(a)

(b)

-

under the dual licensing approach CTHK would not be excluded (paragraph 4 above refers) as it would still be free to proceed with its cable television programming proposals;

the apparent unfairness to Telco of excluding it from competing for the award of a non-exclusive cable television network licence is mitigated by the facts that

<

(i) it would retain its exclusive local

telephone service franchise;

(ii) it may itself have an opportunity

at a

later stage to provide a network for carrying cable television;

(iii) it would in any case be allowed to carry

television signals other

than

for

broadcast cable television (paragraph 16 below refers); and