Chief Executive Donald Tsang Yam-kuen's close ties with tycoons and the fact that he appears to have rented a luxury Shenzhen apartment from a mainland tycoon who is a shareholder of the Digital Broadcasting Corporation (DBC) has captured the media spotlight.
The developer of the luxury complex, Wong Cho-bau, is a delegate of the Chinese People's Political Consultative Conference and has extensive business interests in Shenzhen. Because of his close ties to Tsang, there have been allegations of a transfer of benefits, after Tsang awarded the digital broadcasting licence to DBC. In addition, former education chief Arthur Li Kwok-cheung's appointment as chairman of DBC - approved by the Chief Executive in Council last month - was also suspected of involving a possible conflict of interest.
The apartment issue was a personal matter between Tsang and Wong and has nothing to do with DBC. There has been no transfer of benefits regarding the awarding of the licence to DBC. The reason is simple: if the digital broadcasting industry is such a profitable business, the bidding process for the licence would have been far more intense. The fact that the market leader, Commercial Radio, did not apply shows that it's not a lucrative business investment.
As a major shareholder and founder of DBC, as well as a former legislator who also sat on the information technology and broadcasting panel, I have always supported opening up the airwaves and the development of digital broadcasting services in Hong Kong.
I took the lead and set up Wave Media Limited, the predecessor of DBC, a few years ago and applied for an AM licence. Due to fierce opposition from Peng Chau residents, Wave Media abandoned plans to build a transmission station on the island. The government subsequently granted a digital broadcasting licence and, as a result, Wave Media was reorganised and DBC was born.
In fact, there are still two AM radio channels available for interested parties, plus another Band 3 multiplex for audio broadcasting which is still open for applications. So there is definitely no monopoly of the airwaves.
Bidding for a broadcasting licence is a highly complex, time-consuming and cumbersome process: from the drafting of the investment blueprint and the submission of the application, to the physical set-up of the station and co-ordination with other industry players. It took seven years before the digital licence was formally granted in March last year.
During the entire process, the Broadcasting Authority had the sole responsibility to screen and review applications. The eventual granting of the licence by the Chief Executive in Council was just a procedural and routine matter, rather than a significant decision-making action.
Developing digital broadcasting is a risky business investment, as proved by numerous overseas experiences over the years. Many industry players are not very optimistic about the development of digital broadcasting. The harsh reality is that there are more obstacles than benefits in it all.
Albert Cheng King-hon is a political commentator and founder of DBC Radio. email@example.com