TNAG-2079-FCO40-2959-Hong-Kong-press-coverage-and-reports-1990 — Page 43

7.4

Licensing of Commercial SMATV

Where an independent SMATV operator wished to operate a sys- tem that did not qualify for exemption, it would be required to apply for a SMATV licence. In this event, HutchVision proposes that the rule in the United Kingdom be adopted, whereby before any such licence is granted, the cable oper- ator is given a right of first refusal to provide similar service to the same buildings on the same basis.

The system would work in precisely the same way as it does in the UK and under the same terms and conditions. The process would be triggered by the submission of a formal application for a SMATV licence from an independent SMATV operator. In its application, the operator would be required to submit specific details of the building or buildings to be served, the programming services to be supplied and the price to be charged to subscribers. An applicant would also express such other details of its service as were pertinent to its anticipated commercial operation.

The cable operator would then be formally notified by gov- ernment that an application for a SMATV licence had been received. The cable operator would be given the option of providing an alternative SMATV service, thereby pre-empting the independent SMATV applicant, under appropriate terms and conditions. HutchVision proposes that the specific terms and conditions be adopted from the UK model as indicated below. Should the cable operator choose not to exercise its right of first refusal, the independent SMATV application would be approved.

7.4.1 Cable's Right of First Refusal

As in the UK, this right of first refusal would subsist provided that the cable operator was not in default of general commitments and undertakings to government, and had not failed to honour a previous commitment to provide an alternative SMATV service elsewhere in the franchise

area.

Furthermore, in order to avoid any delay in the introduc- tion of cable service, HutchVision also proposes that the cable operator would not qualify for the right of first refusal where it had not met key milestones in its cable system build timetable.

As in the UK again, the procedure would involve the qual- ifying cable operator being given 20 working days to offer to provide a service as an alternative to the proposed commercial SMATV system. The cable operator would then have four months in which to have the alterna- tive service fully operational.