Communications Authority Press Release (July)


This press release promulgates the decisions of the Communications Authority ("CA") on the respective applications by Hong Kong Mobile Television Network Limited ("HKMTV") and Metro Broadcast Corporation Limited ("Metro"):

CA Approves the Application by HKMTV for Changing its Transmission Standard for the Provision of Broadcast-type Mobile Television Service ("Mobile TV Service")

The CA approved the application of HKMTV for changing its transmission standard to Digital Video Broadcasting – Terrestrial 2 ("DVB-T2") for the provision of its Mobile TV Service.

By way of background, following the judgment handed down by the Court in September 2015 ("Court Judgment") dismissing all the grounds of judicial review brought by HKMTV and Hong Kong Television Network Limited ("HKTV") against the position of the Office of the Communications Authority ("OFCA") in relation to HKMTV’s proposed change of its transmission standard to the Digital Terrestrial Multimedia Broadcast standard, OFCA has been assisting HKTV and HKMTV as regards HKMTV's application to the CA for changing its transmission standard to DVB-T2 ("Application") for the provision of Mobile TV Service in accordance with HKMTV's Unified Carrier Licence No. 041 ("Mobile TV Licence").

After rounds of correspondence exchanges and face to face meeting, HKTV submitted a finalised technical proposal in June 2017, committing to the detailed transmission arrangements, system parameters and the technical specifications set out therein in support of the Application, to ensure that the Mobile TV Service provided by HKMTV will be in strict compliance with the relevant statutory requirements under the Broadcasting Ordinance (Cap. 562) and the Telecommunications Ordinance (Cap. 106) ("TO") and the Court Judgment.

Having carefully reviewed the technical proposal, the CA approved the Application and issued today (13 July 2017) to HKMTV an amended Mobile TV Licence, authorising HKMTV to change its transmission standard to the T2 Lite profile under DVB-T2 standard using the 8 MHz of spectrum assigned and in accordance with the specific technical parameters stipulated in its amended Mobile TV Licence. The amended Mobile TV Licence makes it clear that HKMTV is authorised to provide a Mobile TV Service for reception by such portable or mobile devices as approved by the CA at moving locations in Hong Kong, which does not involve reception by specified premises, whether through an inherent receptive link such as fixed wiring, or physically/technologically linked equipment such as a fixed antenna or an In-Building Coaxial Cable Distribution System.

The amended Mobile TV Licence also incorporates the necessary new/amended licence conditions, imposing on HKMTV the following obligations –

  1. HKMTV shall give written notification to the CA at least one month in advance before commencing the use of the DVB-T2 standard;
  2. HKMTV shall encrypt all television programme signals to ensure that its Mobile TV Service can only be accessed by portable or mobile devices, receivers, receiving devices, etc. which have been approved by the CA for reception of the Mobile TV Service at moving locations ("authorised equipment");
  3. HKMTV shall ensure the security of the encryption system of its Mobile TV Service and shall have a robust, efficient and effective market monitoring and detection scheme to detect and deny unauthorised access to its Mobile TV Service by any equipment other than the authorised equipment;
  4. HKMTV shall be the sole supplier and distributor of all the authorised equipment and ensure all the authorised equipment is properly labelled;
  5. HKMTV shall take all necessary steps to prohibit the supply, distribution and sales of unauthorised equipment, cause the recovery of any such equipment and disable it to prevent its use to access its Mobile TV Service; and
  6. HKMTV shall conduct demonstrations, trials and tests to demonstrate to the satisfaction of the CA or OFCA its compliance with the licence conditions.

The technical proposal of HKMTV as approved by the CA is scheduled to the amended Mobile TV Licence, with which HKMTV is obliged to conform throughout the licence validity.

HKMTV has confirmed in writing its acceptance of all the amendments to the Mobile TV Licence. The Mobile TV Licence as amended is published on the CA's website.

According to the technical proposal of HKMTV, the new transmission standard will be implemented within 12 months upon the CA's approval. Prior to service launch using the new transmission standard, HKMTV is required to conduct a demonstration to the CA of its proposed encryption mechanism, proposed mobile receiving devices, conditional access/parental lock features. HKMTV is also required to conduct transmission tests at specific sites to demonstrate that its transmitting equipment would not interfere with other broadcasting/telecommunications services.

The 8 MHz of spectrum assigned to HKMTV under the Mobile TV Licence will expire on 30 August 2025, and OFCA has reminded HKMTV that there is no legitimate expectation for renewal of the licence or re-assignment of the spectrum upon expiry of the current term. During the remaining validity of the Mobile TV Licence, OFCA will continue to assist HKMTV to ensure the Mobile TV Service will be provided in compliance with the Court Judgment and all the relevant statutory/licence requirements.

CA Approves Changes in Shareholding Structure of Metro

The CA approved on 18 February 2017 the application of Metro for changes in its shareholding structure arising from the issue of voting shares to two new shareholders, viz. Metro Investment 1 Limited ("Metro Investment 1") and Metro Investment 2 Limited ("Metro Investment 2"). Metro Investment 1 and Metro Investment 2 are two Hong Kong incorporated companies jointly owned by Mr Li Ka-shing (50%) and Mr Li Tzar Kuoi, Victor (50%).

The CA was informed by Metro that the changes as approved by the CA were effected on 22 May 2017. Metro Investment 1 and Metro Investment 2 have since each held 25.5% of the voting shares in Metro, whereas the voting shares held by the previous shareholders of Metro, namely Hutchison Commercial Broadcasting Limited and Newton City Limited, have each been reduced from 50% to 24.5%.

Under the analogue sound broadcasting licence of Metro, the CA's prior approval must be sought for any changes in the shareholding structure of the licensee. In considering and approving Metro’s application on 18 February 2017, the CA has carefully examined all the submissions from Metro, including but not limited to its revised Articles of Association, the deed of undertaking provided by Metro and the annual statutory declaration confirming Metro’s compliance with the applicable regulatory requirements.

Taking into account Metro's submissions, statutory declaration and deed of undertaking, the CA was satisfied that Metro would continue to comply with various applicable regulatory requirements under the TO and Metro's analogue sound broadcasting licence after the changes in its shareholding structure. In particular, Metro would remain a company incorporated in Hong Kong and its control and management would continue to be bona fide exercised in Hong Kong. The aggregate of the voting shares in Metro held by "unqualified persons" (or non-ordinarily residents in Hong Kong) would not exceed 49% of the total number of voting shares in Metro. Metro would also continue to comply with the non-subsidiary requirement, and no "disqualified persons" would exercise control of Metro. The CA was also satisfied that Metro would be able to honour the investment and programming commitments it had already made under its licence upon completion of the shareholding changes.

The approval of the CA of Metro's application is subject to inter alia the condition that Metro shall be bound by all the statements, representations, assurances and undertakings made in the application.

Communications Authority
Secretariat

13 July 2017

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