Television Broadcasts (TVB)

TVB seeks High Court review of recommendation for new TV licences

High Court writ seeks a review of Communications Authority's July recommendation that additional terrestrial television stations be allowed

PUBLISHED : Friday, 04 January, 2013, 12:00am
UPDATED : Friday, 04 January, 2013, 3:30am

TVB yesterday applied for a judicial review of a government agency's decision to recommend the granting of new free-to-air television licences, in an apparent effort to avoid increased competition in the terrestrial television market.

The broadcaster said in court filings that the Communications Authority made an "unlawful" recommendation in July, when it supported the granting of new licences, saying the judgment was replete with both factual and legal errors.

It asked the High Court to stop the Chief Executive in Council, made up of the chief executive and Executive Council, from giving licences to City Telecom-owned Hong Kong Television Network, i-Cable Communications subsidiary Fantastic Television, and HK Television Entertainment Company, a unit of PCCW.

The court move came after ATV, the other free-to-air broadcaster, failed in March to obtain court permission to lodge a judicial challenge.

TVB claimed in court documents that four expert reports commissioned by the authority before it made the recommendation were riddled with "glaring errors of fact".

It also said the authority failed to take into account the important fact that the quality and originality of television programmes would be degraded if the pool of available content producers and artists was spread among five companies. TVB was also unhappy at not being consulted before the authority made the recommendation.

According to the court papers, the four allegedly substandard reports, produced by consultancy Spectrum Value Partners, assessed the potential effects on market sustainability and competition if extra licences were issued.

TVB said the reports inflated advertising revenue generated in the free-television market between 2005 and 2009 threefold. The figure was reported to be HK$36.2 billion but in fact it was HK$12 billion, the broadcaster said.

It pointed out that even with the inflated numbers, the consultants had concluded that the market might not be able to sustain five players. Therefore, it was "irrational" for the authority to make the recommendation with the assertion that market sustainability was not a primary consideration.

The consultants predicted that ATV would be forced out of business if the three applicants were granted licences, TVB added.

TVB was unhappy that it was told of the reports only after the recommendation was made to the Chief Executive in Council.

Moreover, the station was supplied with only heavily redacted versions of the reports and was therefore asking for the full versions, it said.

In a separate statement, the station said: "TVB reiterates that it is not blindly objecting to the issuance of new free-to-air TV licences and that it is not afraid of competition."

ATV said it "understands and supports TVB seeking a legitimate judicial review", adding that its position has always been clear - that it opposes the granting of additional licences.

HKTV, which applied for a licence three years ago, questioned TVB's action, saying the application had been made too late.

City Telecom chairman Ricky Wong Wai-kay urged the government to issue new licences as quickly as possible for the sake of the public interest.