The law allowed the government the discretion to decide which broadcasting operators would receive free-to-air television licences, and there was no unfairness in refusing the application of Hong Kong Television Network (HKTV), a court heard yesterday.
The Broadcasting Ordinance provided the statutory powers to the Chief Executive in Council to make the final decision on the licensing issue, barrister Benjamin Yu SC, representing the government, said.
There was a need for the Chief Executive in Council to consider the public interest before reaching a decision, Yu said, so it was reasonable for the body to adopt a "gradual and orderly approach" in its final stage of decision-making and rate market sustainability higher than other factors.
"It can't be said that the Chief Executive in Council has wholly unfettered discretion [to the point] that it becomes arbitrary," Yu told the Court of First Instance. "The ultimate decision-maker is the Chief Executive in Council. It is open to them to weigh which factor more than the others."
Yu also denied the government had preset the number of licences, but rather had taken into account the public interest in deciding it should not approve all three applications in one go.
The barrister was countering claims by HKTV on Wednesday that the government had acted unfairly in suddenly introducing a gradual and orderly approach in its licence vetting process.
HKTV boss Ricky Wong Wai-kay was the first to apply for a free-television licence, on December 31, 2009. That was followed by iCable Communications and PCCW subsidiary HK Television Entertainment the following year. But HKTV lost its bid on October 15.
Earlier, the court heard from HKTV lawyer Russell Coleman SC that Secretary for Commerce and Economic Development Greg So Kam-leung had said early last year that the Broadcasting Authority - now part of the Office of the Communications Authority - would recommend approving all three bids.
But in May that year, Chief Executive Leung Chun-ying raised concerns about keen market competition at an Executive Council meeting, Coleman said.
The Chief Executive in Council later introduced the policy of a gradual and orderly approach and rejected HKTV's bid, a move that in reality limited the number of licences, he said.
Coleman said meeting records revealed that Leung indicated "programming strategy and capability" should be given relatively more weight among other criteria, namely, financial ability, investment plan and technology.
That was precisely the only category out of the four in which HKTV ranked last, Coleman said.
He said that since the government was taking a new approach, it should have let HKTV submit further materials to back its application. But Yu said the government did send HKTV a letter that May saying it was considering the new approach. Wong replied, he said, pledging to hire more people and to prove he was financially able to run the business.
The government had given HKTV a chance to show it was better than the other two firms, so the final decision was not unfair and unreasonable, Yu said. The hearing continues before Mr Justice Thomas Au Hing-cheung.