TNAG-2550-FCO40-3725-Hong-Kong-Asia-Satellite-Telecommunications-Company-Limited--1992 — Page 9

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CONFIDENTIAL

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CONFIDENTIAL

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PRIORITY

FM FCO

TO PRIORITY HONG KONG

TELNO

OF 161657Z DEC 92

INFO INFO ROUTINE PEKING, UKREP JLG HONG KONG

YOUR TELNO 2524:

3

PROPOSAL FOR THE ESTABLISHMENT OF AN AUTONOMOUS

HONG KONG SATELLITE LICENSING REGIME

1.

THANK YOU FOR TUR AND FOR YOUR FURTHER THOUGHTS ON POSSIBLE

LICENSING ARRANGEMENTS FOR SATELLITES IN HONG KONG BEFORE 1997.

2. YOU PROPOSE THAT AN AUTONOMOUS HONG KONG SATELLITE LICENSING

AUTHORITY BE ESTABLISHED WHICH WOULD EMPLOY ITS OWN CONSULTANTS

TO ENSURE THAT SATELLITE OPERATORS (AND HENCE HKG AND HMG) WERE

FULLY INSURED AGAINST LIABILITIES ARISING FROM THEIR SATELLITE

OPERATIONS. OUR INITIAL REACTION TO THIS PROPOSAL IS FAVOURABLE.

EVIDENTLY, HOWEVER, WE WOULD NEED TO BE FULLY SATISFIED WITH THE

PROPOSED INDEMNITY ARRANGEMENT AND WITH THE PROPOSED LICENSING

REGIME BEFORE ANY SUCH ARRANGEMENT COULD BE PUT IN PLACE.

3. WE AGREE THAT GREATER AUTONOMY FOR HONG KONG IN THIS FIELD IS

A WORTHWHILE OBJECTIVE: IT WILL ENABLE HONG KONG TO GAIN

EXPERIENCE AND TO ESTABLISH ITS OWN SOURCES OF EXPERTISE BEFORE

THE LONGER ESTABLISHED THE AUTONOMOUS LICENSING REGIME,

1997.

HKD

J MARSHALL

THE

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CONFIDENTIAL

PRIORITY

THE MORE LIKELY IT WILL BE THAT THE CHINESE WILL FOLLOW GENERAL

PRECEDENT AND ACCEPT THE CONTINUATION OF THIS REGIME AFTER THE

HANDOVER. BUT OUR IMMEDIATE CONCERN MUST BE THAT A HONG KONG

LICENSING REGIME SHOULD BE CONSTRUCTED ON A SOUND LEGAL AND

ADMINISTRATIVE BASIS.

4. THE PRINCIPAL CONCERN OF THE BNSC IS TO ENSURE THAT ALL

SATELLITE OPERATIONS BY COMPANIES INCORPORATED IN THE UK AND ITS

DEPENDENT TERRITORIES ARE FULLY INSURED SO AS TO PROTECT HMG

AGAINST LIABILITIES ARISING FROM THOSE OPERATIONS. THE BNSC WILL

THEREFORE NEED TO BE SATISFIED WITH THE LICENSING AUTHORITY AND

WITH THE INDEMNITY ARRANGEMENT. FIRSTLY, THE LICENSING REGIME

WILL NEED TO HAVE ACCESS TO CONSULTANTS WITH THE RIGHT LEVELS OF

LEGAL, TECHNICAL AND INSURANCE EXPERTISE TO CHECK THAT SATELLITE

OPERATORS ARE PROPERLY INSURED BEFORE LICENSES ARE ISSUED. THE

BNSC WILL NOT WANT TO VET INDIVIDUAL LICENSE APPLICATIONS BUT

WILL WANT TO BE CONFIDENT FROM THE OUTSET IN THE TECHNICAL

COMPETENCE OF THE LICENSING REGIME. SECONDLY, THE NEGOTIATED

INDEMNITY ARRANGEMENT WILL HAVE TO BE COMPREHENSIVE AND ACCEPTED

BY FCO AND BNSC LEGAL ADVISERS AS A SOUND LEGAL BASIS FOR AN

AUTONOMOUS LICENSING REGIME IN HONG KONG.

5. THE NEXT LICENCE TO BE ISSUED IN HONG KONG WILL BE FOR EPSTAR

ONE, SCHEDULED FOR LAUNCH IN MID 1994. WE AGREE THAT IT WOULD BE

HELPFUL IF NEW ARRANGEMENTS COULD BE IN PLACE BY THEN. HOWEVER

THIS CANNOT BE GUARANTEED DUE TO THE LEGAL PROBLEMS WHICH

COULD ARISE IF IT IS DECIDED TO GO AHEAD.

WE AND THE BNSC ARE CONSULTING OUR LEGAL ADVISERS ABOUT THIS

PROPOSAL. IT WOULD BE HELPFUL IF YOU COULD NOW PRODUCE A FORMAL

PROPOSAL FOR OUR DETAILED CONSIDERATION.

6.

HURD

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