TNAG-1990-FCO40-2823-Broadcasting-in-Hong-Kong-1989 — Page 8

satellite television signals. The gross revenue from this source is currently about $5 million per annum. At the current rate of royalty, this yields $450,000, compared with a total royalty payment in 1987 by CWHK of $171.3 million (at the then prevailing rate of royalty of 7%).

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There are no other financial or staffing implications.

Consultation

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CWHK has been consulted оп the possibility of deregulating the use of TVRO dishes. The Company supports the proposal for exemption from licensing for the reception of satellite television signals intended for

for direct reception by the public, although it has expressed its preference to retain its exclusive right to receive television signals intended for resale. The Company has given two main reasons in support of its case. The first is that its investment in recent years in television related facilities has been HK$7 million. The second is that the Company considers that compliance with the terms of the INTELSAT Agreement would be more straighforward if CWHK remains the only

only entity authorised to receive INTELSAT signals in Hong Kong.

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It has been

represents

stated in paragraph 19 that the transmission and reception of television signals only a small part of CWHK's total turnover. Also, consultation with the present terrestrial television broadcasters indicates that while they would like the option to provide their Own satellite facilities, they wish to retain the option of continuing to use the facilities provided by CWHK. It appears, therefore, that provided the Company offers a good competitive service it could expect to retain a portion of this minor part of its business. For these reasons, the fact that CWHK has made significant investment is not considered sufficient to justify continued monopoly provision of these facilities.

The Administration does not accept the Company's argument concerning the INTELSAT Agreement. There are several precedents for more than one company in a country to be authorised to transmit and receive INTELSAT signals. An example is the UK where both British Telecom International and Mercury use INTELSAT facilities.

Public Reaction

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The eventual implementation of the recommendation in paragraph 3 above is likely to be favourably received by the public as a sensible response to the developments that have taken place with respect to TVRO satellite dishes and the increasing availability of satellite television programmes.