New Policy For Satellite TV Broadcasting Licensing

The Hong Kong Special Administrative Region Government has decided to liberalize the licensing regime for satellite television broadcasting in Hong Kong. The following package of policy changes will take effect from 16 January 1998, and applications for new satellite TV broadcasting licences will be considered accordingly :

1. the existing restrictions on foreign ownership which is currently limited to not more than 49% will be lifted;
   
   
2. the requirement that the majority of directors of a satellite broadcasting company have to be Hong Kong residents will be relaxed;
   
   
3. subsidiary companies will not be prohibited from applying and becoming satellite broadcasting licensees;
   
   
4. the term of the satellite broadcasting licences will not be fixed for a period of 12 years, but may vary according to the needs of individual applicants;
   
   
5. a standard satellite broadcasting licence will be developed and published to make the licensing regime more user-friendly and transparent;
   
   
6. while licence fees will continue to be determined on a full-cost recovery basis, the charging regime will be simplified and efficiency measures will be introduced which will have the effect of reducing costs.

Details of the policy changes are as follows:

1. "Foreign" ownership
   
   The aggregate holding of shares in a satellite broadcasting licensee by persons not ordinarily resident in Hong Kong can be up to 100%.
   
   
2. Majority of directors to be local
   
   The requirement on the majority of directors to be local will be removed, but the licensee will be required to have at least one local principal officer as a contact point for regulatory matters.
   
   
3. Licensee not to be a subsidiary
   
   The licensee can be a subsidiary of another company and the licence will contain appropriate conditions requiring the filing of the particulars of the directors and principal officers. Applicants and persons who control or materially influence the licensee have to satisfy the licensing authority i.e. the Chief Executive-in-Council that they are fit and proper persons. The Chief Executive-in-Council of the Hong Kong Special Administrative Region Government reserves the power to revoke a licence for breach of licence conditions or if the public interest so requires.
   
   
4. Length of licence
   
   The term of licences can vary up to a maximum of 12 years. It will be up to the applicant to propose a licence period in the first instance.
   
   
5. Content control
   
   A licensee has to comply with the programme and advertising standards issued by the Broadcasting Authority. All licensees will be required to undertake to observe the laws and programme standards of the countries and places receiving their services.
   
   
6. Standard licence
   
   A standard satellite broadcasting licence will be developed and made available to interested parties on request. Applications for licences should be submitted to the Information Technology and Broadcasting Bureau of the Hong Kong Special Administrative Region Government. The approving authority for licences is the Chief Executive-in-Council.
   
   
7. Licence fee
   
   Licence fees will be charged on a full-cost recovery basis. The licence fees will comprise three components - a base cost of about HK$50,000, a channel fee of about HK$20,000 for each channel primarily targeting for Hong Kong and an antenna fee of about HK$30,000 per satellite antenna. The fee level will be reviewed every four years.