Government ignored advice on TV licences, says regulator

Industry regulators say recommendation that all free-to-air applicants be granted licences was rejected while official communications broke down

PUBLISHED : Saturday, 09 November, 2013, 4:37am
UPDATED : Saturday, 09 November, 2013, 10:38pm

Communications regulators accused the government of ignoring their advice and failing to respond to them before making the controversial decision not to award a free-to-air TV licence to Ricky Wong Wai-kay's Hong Kong Television Network.

The Communications Authority - the statutory body that regulates broadcasting and communications policy - dropped the bombshell as the main protagonists in the row, Wong and commerce minister Greg So Kam-leung, faced off in the Legislative Council yesterday.

In a document submitted to Legco's panel on information technology and broadcasting, the authority said it had recommended that Chief Executive Leung Chun-ying issue free TV licences to all the applicants - newcomer HKTV and PCCW's Hong Kong Television Entertainment Company and iCable's Fantastic Television, both established operators.

The seven-page submission also revealed that the government stopped communicating with the authority in February and said regulators were never asked to consider the now controversial "gradual and orderly approach" to issuing licences, which the government cited as its main defence for rejecting Wong.

Some lawmakers were stunned by the authority's account and said that had it arrived a day earlier, Thursday's failed motion to invoke Legco's special powers to probe the TV licence row might have passed.

Caught off-guard by the authority's intervention, So reiterated previous answers. His deputy, Joe Wong, said the chief executive was not obliged to seek the consent of the regulator before making a decision on behalf of Exco. On Thursday it was revealed that a number of senior officials questioned the wisdom of departing from the long-held policy of issuing three licences.

Civic Party lawmaker Ronny Tong Ka-wah said yesterday that the authority's submission added weight to the legal argument that the government may have made procedural mistakes.

"The contrasting views highlighted by the latest document reinforced the accusation that the authority's recommendations were completely ignored," said Tong, a senior counsel.

According to the submission, all three applicants met the statutory requirements. They also met the four criteria - financial capability, programming investment, programming strategy and capability, and technical soundness - listed by the government when it announced its decision to grant licences to Fantastic TV and HKTVE on October 15.

HKTV chairman Wong revealed a top official rang him to encourage him to apply for a free TV licence in December 2009. After applying, Wong later met the official at the commerce bureau's offices. He said the official assured him he would get a licence. "The official said as long as our company met the requirements, the government had no reason not to issue the licence ... I was not surprised because the official was making an explanation based on an existing policy."

A 2010 study commissioned by the authority suggested that Hong Kong could not sustain five free TV stations, but it recommended licences be issued to all applicants, and let the market decide who survives.

"Sustainability of individual applicants should not be a primary consideration in deciding as to whether a licence should be granted or not," the authority's submission said.

The authority added that it did not have a "duty to protect [TVB and ATV]'s interests by maintaining the status quo". On July 13, 2011, the authority recommended the government grant licences to all three applicants.

This was a stark contrast to the government's earlier explanation. The government stressed the importance of the sustainability of the free TV market, and as a result, a "gradual and orderly approach" was introduced.

However, the government commissioned the same consultant to update its report in early 2012, after the authority made its recommendations.