Free pay-TV exposes outdated media law

PUBLISHED : Saturday, 23 October, 2010, 12:00am
UPDATED : Saturday, 23 October, 2010, 12:00am

Not much comes free these days, but some pay-TV channels do - thanks to a Broadcasting Ordinance so outdated it doesn't even define the internet, and thanks to an oversight system where the left hand doesn't know what the right hand is doing.

The freebies emerge when subscribers terminate contracts for PCCW's Now TV and Netvigator broadband services. While PCCW cuts the service, the set-top box is not taken away and the subscribers are told they can still watch certain channels for free - Now Hong Kong and Now News, which are priced at HK$15 each when bundled into a 12-month pay-TV contract.

But here's the rub: Under the Broadcasting Ordinance and terms of its pay-TV licence, Now TV is not allowed to provide free-to-air television. Operators who do so must have a different licence.

People familiar with the sector suspect PCCW may be allowing former paying subscribers to watch for free to maintain subscriber numbers, artificially maintaining market share, ratings and advertising rates at a time when it has lost its top drawcard, the English Premier League.

'I wouldn't be surprised if [the former subscribers viewing for free] are being counted as subscribers or part of the TV ratings,' Cheuk Pak-tong, head of Baptist University's Academy of Film, said. 'These figures are never transparent and always hard to verify. PCCW might also be paving the way for its future free-TV operation,' Cheuk said, as PCCW is one of three groups bidding for a new free-to-air TV licence.

The Broadcasting Authority, which regulates both free and pay-TV licensees, said free and pay services were governed by separate licences under the Broadcasting Ordinance, which was enacted a decade ago and has been overtaken by rapid changes in technology.

But people familiar with the sector say a pay-TV broadcaster can get around the free-pay division through murky internal deals that make certain channels appear to be paid for.

In 2004, a complaint was made to the authority that PCCW was breaching its pay-TV licence by offering six channels to customers as a free basic service. The authority found against the complaint because PCCW IMS, which operates the broadband internet system Netvigator through which Now TV is delivered, had paid Now TV a HK$15 one-off membership fee on behalf of each Now TV subscriber. The six free channels were therefore not considered a free TV service.

It is unclear what the situation would be today with subscribers who cut off both Now TV and Netvigator and continue to watch free channels.

Lawmaker Samson Tam Wai-ho, from the information technology sector, said: 'There is a grey area in the law, and the Broadcasting Authority should clarify this.'

Asked about free viewing of Now TV channels, the Broadcasting Authority said only holders of free-TV licences could broadcast free TV services, but it refused to comment specifically on Now TV.

The watchdog said it would 'act in response to complaints', but it would not say whether it would investigate the Now TV situation, and it would 'trust the audited subscription figures submitted by the licencee'.

Now TV said its subscriptions were in line with the law.

Another element of the situation highlights the dysfunctional oversight of the broadcasting sector and the failure of the ordinance to keep up with technology. The regulations do not clearly define whether Now TV can operate as an internet protocol television (IPTV) provider as well as a pay-TV provider.

An IPTV can offer free channels and does not come under the Broadcasting Authority's jurisdiction, according to Televisioners Association vice-president Peter Lam Yuk-wah.

'Hong Kong Broadband (bbTV), for instance, is not subject to the Broadcasting Authority's rule,' Lam said, as it is an IPTV. 'If a pay-TV provider is under the authority's rule but the other is not, it's just unfair to licensees. This really raises the question of whether the current TV licensing system is still relevant.'

And while pay-TV and IPTV providers use the internet to deliver their signals, the internet is not defined in the Broadcasting Ordinance, and regulation of the internet is monitored by the Office of the Telecommunications Authority (Ofta), which does not monitor TV stations.

'The law has a lot of grey areas,' Internet Society chairman Charles Mok said. 'To users, both Now TV and bbTV are more or less the same kind of services, but they are regulated by different bodies, and that raises concerns over issues like consumer protection.'

Tam said: 'That's why we need to merge the Broadcasting Authority and Ofta.'