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The following is issued on behalf of the Broadcasting Authority:
At its meeting today (January 26), the Broadcasting Authority (BA) accepted the application of Asia Plus Broadcasting Limited (Asia Plus) to surrender its non-domestic television programme service licence, with effect from the same day. The BA noted that the surrender of licence was purely a commercial decision of Asia Plus.
At the same meeting, the BA also approved the application by MATV Limited (MATV), a non-domestic television programme service licensee, to withdraw its plan to provide a subscription service in Hong Kong. The BA noted that the withdrawal was based on the commercial consideration of MATV and would not affect the service currently provided by MATV to the Asia-Pacific region under its non-domestic television programme service licence. As the service did not primarily target Hong Kong, the impact on local viewers was minimal.
A competition complaint against Hong Kong Cable Television Limited (HKCTV) for engaging in anti-competitive conduct in the television market and breaching section 14 of the Broadcasting Ordinance (BO) (Cap.562) was also considered at the meeting. The complaint concerned HKCTV's provision of Channel A at a low subscription fee to housing estates. After conducting a preliminary enquiry in accordance with its investigation procedures, the BA concluded that HKCTV had not breached section 14 of the BO. Details of the above complaint are set out in the background note at Annex.
The BA also considered three complaint cases substantiated. The first case was about the television advertisement "McDonald's New Food Excitement Promotion ¡ª Grilled Chicken Burger & Potato Wedges" broadcast on the Home channel of Asia Television Limited (ATV) on October 14, 2005 at 8:15pm; and on the Jade channel of Television Broadcasts Limited (TVB) on October 11, 2005 at 7:12pm. The BA considered that the portrayal of a man hanging in the air in the advertisement was dangerous as children viewers might imitate the act portrayed in the advertisement which was broadcast within the family viewing hours when there might be children watching television without parental guidance. As such, the BA considered that the advertisement was unsuitable for broadcast within the family viewing hours when a large number of children were expected to be watching television. ATV and TVB were advised to observe more closely the relevant provisions in the Television Programme Codes on family viewing policy and the portrayal of dangerous behaviour easily imitated by children.
The second case was about the radio programme "He She Hit" broadcast on the CR2 channel of Hong Kong Commercial Broadcasting Company Limited (CR) on October 13, 2005 from 12:00 midnight to 2:00am. The BA considered the two expressions used in the programme offensive, which were unacceptable for broadcast on radio at all times. The BA noted that the expressions were uttered by a guest in the programme but was of the view that CR had the obligation to brief its guests and remind them of the need to comply with the Radio Programme Code. CR was strongly advised to observe more closely the relevant provisions governing the use of offensive expressions.
The third case was about the television programme "Dragon Loaded" broadcast on the Jade channel of TVB on October 29, 2005 from 8:30pm to 10:30pm. The BA considered that the use of an expression, which was a pun on a Cantonese foul expression and uttered out of context, was unacceptable for broadcast in television programmes. TVB was advised to observe more closely the relevant provision in the Television Programme Code on the use of downright offensive expressions.
The BA noted that in December 2005, the Commissioner for Television and Entertainment Licensing dealt with 75 cases (1,697 complaints) under her delegated authority, of which 6 cases (6 complaints) were classified as minor breaches, and 53 cases (63 complaints) as unsubstantiated, under section 11 of the Broadcasting Authority Ordinance; and 16 cases (1,628 complaints) were outside section 11 of the Ordinance. Please refer to the BA website: www.hkba.hk for details of the complaints.
Annex:
Background Note on Preliminary Enquiry into the Competition Complaint against HKCTV for engaging in Anti-competitive Conduct
The Broadcasting Ordinance (BO) (Cap.562) contains provisions governing anti-competitive conduct and abuse of dominance to safeguard fair competition in the television programme service market. Specifically, section 14 prohibits a licensee in a dominant position from abusing that position by engaging in conduct which has the purpose or effect of preventing, distorting or substantially restricting competition in a television programme service market.
The Complaint
In November 2005, the BA received a complaint lodged by a member of the public against HKCTV about the provision of Channel A to housing estates. The complainant alleged that:
(a) HKCTV's charge of a low subscription fee under the collective subscription scheme targeting housing estates amounted to predatory and discriminatory pricing; and
(b) the conduct of HKCTV constituted an abuse of a dominant position and a breach of the prohibition on abuse of dominance under section 14 of the BO.
Having carefully considered the submissions from the contending parties and the analysis prepared by the competition expert, the BA concluded that HKCTV's conduct did not have the purpose or effect of preventing, distorting or substantially restricting competition in the television programme service market thereby amounting to an abuse of a dominant position. The main reasons for the BA's decision are:
(a) In general, the low subscription fee charged for a television service could widen consumers' choices. In this case, the programmes in Channel A were duplicates of those in HKCTV's basic service and the cost of Channel A would be correspondingly lower than that for an "ordinary" channel. Further, the low subscription fee was collectively offered to a housing estate. It amounted to a volume discount which could be justified in cost terms and was not predatory or discriminatory pricing.
(b) Channel A was considered by HKCTV as a promotion channel, allowing viewers to experience the range of programmes offered by HKCTV at a low cost before deciding whether to sign up the service. Such a market strategy was not unique in the pay television market.
(c) The agreements entered into between the housing estates and HKCTV were not of exclusive nature and the duration of the agreements was not excessive. Competitors were not excluded from acquiring customers in the housing estates. The collective subscription scheme targeting housing estates was unlikely to have a substantial foreclosing effect against competition.
(d) There was no evidence that competition in the television market has been adversely affected by the promotional package.
The investigation report on this unsubstantiated competition complaint is available on BA's website: http://www.hkba.hk/en/tv/competition/complaint _cases.html.
Ends/Thursday, January 26, 2006
Issued at HKT 19:12
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