TNAG-2079-FCO40-2959-Hong-Kong-press-coverage-and-reports-1990 — Page 44

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7.4.2

Provision of Alternative Service by Cable

In HutchVision's view, the alternative service provided by the cable operator as a result of exercising the first right of refusal should, as in the UK, be "similar or superior" to that proposed by the independent SMATV applicant, and should be offered at a price that is no higher than that proposed by the independent SMATV appli- cant. This condition would require the cable operator to include in its proposed service package all of the individual programming services specified in the applica- tion submitted by the independent SMATV applicant. It would also require the cable operator to offer its subscribers a tier of cable service which would, at a minimum, include all of these specified services at a price no higher than that proposed in the independent SMATV application. Subsequent increases in the price of such a tier should be limited to increases in the con- sumer price index until such time as cable became avail- able. The cable operator would, of course, be free to tier or package its cable services in any way provided that this condition was met. The condition would protect the quality and value of service provided to subscribers as a result of the exercise of the first right of refusal.

7.4.3 Conversion of SMATV to Cable

In accordance with the UK rule, the construction of a SMATV system by the cable operator as a result of exer- cising its first right of refusal would not in any way absolve the operator from the obligation to provide cable service throughout the franchise area on the terms and conditions agreed with government. The timetable for constructing the cable network and providing cable ser- vice would remain in effect and the in-building part of the SMATV system would be connected to the cable network when the "horizontal" or underground part of the cable system reached the SMATV location. The right of the cable operator to provide SMATV service would therefore terminate at the date at which completion of the cable network in that area was anticipated.

Accordingly, and again as required in the UK, where the cable operator is licensed to provide the alternative service, the SMATV system should be constructed such that it is capable of being connected to the broadband network without further internal wiring. This would ensure that the residents of buildings with SMATV service provided by the cable operator would not suffer delays in gaining access to cable service in virtue of that fact.