More UPDATES on the Free TV License Issue…

For those who are still interested in the free TV licensing issue (or should I say ‘debacle’), here are a few recent articles from SCMP that provides some good updates on the issue.

At this point, looks like the only ‘hope’ there is of a possible turnaround to this issue will be on 11/6, when the full Legislature convenes for their meeting and 2 motions related to the licensing issue will be put on the table for voting (one is the motion to use LegCo’s special powers to force an investigation into the licensing decision, which would also include publicly releasing some of the documents involved and the other is the petition signed by 34 lawmakers pressing the government to issue a license to HKTV).  If both of these motions fail, then it’s pretty much a ‘done deal’ – meaning that the HKTV staff might as well find other jobs because there’s pretty much no way that HKTV is going to get a license (they won’t get the ‘explanation’ that they’re seeking either).

Probably the only ‘good’ news I’ve read so far related to this issue is that the popularity ratings for both C.Y. Leung as well as ExCo have dropped pretty significantly the past few days (undoubtedly due to all the negative press surrounding the licensing decision).  When I say that this is ‘good’ news, I’m definitely NOT trying to be facetious – I know it won’t help the issue much, especially since CY Leung and his cronies don’t seem to give a damn about the HK public anyway, but it’s good to know that the public isn’t taking his ‘attitude’ and ‘lack of respect’ lightly either.

Anyway….two articles that I definitely recommend reading are the ‘mini-bio’ on Ricky Wong (gives a good summary of why he is both ‘loved’ and ‘hated’ by people) as well as the editorial written by Mike Rowse on why the government’s assertion that the market can’t sustain 5 TV stations is flawed.  Both are very interesting reads that provide some good insight into the issue.

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Article 1:

Liberals join with pan-democrats to back HKTV

Source:  SCMP

In a rare gesture, Liberal Party legislators and two other pro-establishment lawmakers have linked hands with pan-democrats to sign a petition pressing the government to give HKTV a free-to-air television licence.

The news came as Chinese University announced on Monday that Leung’s score in its popularity index fell to its lowest-ever – 41.7, down 4.2 marks. His cabinet also scored a record low of 42.1, down 3.5 points.

The Liberals signed their names alongside those of 27 pan-democrats under a statement calling on Chief Executive Leung Chun-ying and the Executive Council to revise their decision to grant licences to just two of the three applicants – i-Cable’s Fantastic TV and PCCW’s HK Television Entertainment Company.

Two other pro-government lawmakers may yet sign up, according to pan-democrat co-ordinator Frederick Fung Kin-kee.

The Liberals’ five legislators and non-affiliated Paul Tse Wai-chun also pledged to back the pan-democrats’ second attempt to invoke Legislative Council powers to investigate the decision. The motion will be put to the full council on November 6.

The decision snubbing HKTV saw an estimated 80,000 people attend a protest rally, followed by a week-long sit-in at government headquarters as staff from the station called for an explanation.

Commerce secretary Greg So Kam-leung said on Monday that he had written to HKTV staff on Saturday to “explain the rationale” behind the decision. But a source familiar with the situation said the letter repeated the government’s vague line that “a number of factors had been considered”.

Meanwhile, Philip Li Koi-hop, of political fringe group the People’s Opposition Party, withdrew his application for a judicial review in a bid to corner the government, which has claimed one of the reasons it cannot explain its decision was because judicial proceedings were ongoing.

Although HKTV chief Ricky Wong Wai-kay has said he plans to seek a judicial review, he has yet to file an application, and the station announced an explanation might prevent legal action.

Liberal leader James Tien Pei-chun said: “Granting three licences is the easiest way to defuse this political bomb as requests for a judicial review and Legco inquiry will be withdrawn.”

With TVB and ATV already holding free-to-air licences, Tien added: “From a business perspective, with greater competition, the advertising revenue of the free-TV market is expected to exceed the current figure of HK$3.9 billion. It can accommodate five players.”

Tien brushed aside the Liberals’ failure to support Mok’s first attempt to invoke Legco’s powers in last Friday’s House Committee meeting, saying it was a matter that should be put to the full house. It will only be passed if it wins majority support in both the 35-seat geographical and functional constituencies.

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Article 2: 

Profile: Ricky Wong, the media upstart making a splash

Source:  SCMP

Ricky Wong Wai-kay is, in his own words, the type of person who earns himself more enemies than friends due to his straightforwardness.

But in a matter of days, the popularity of the former HKTV chairman has surged with the public, due to the same characteristics. His fiery quotes about the government's rejection of his free-to-air TV-licence application have been far more entertaining than the repetitive statements of government ministers.

"Who rules Hong Kong: the law, the policies, or the chief executive?" asked the 51-year-old, right after Chief Executive Leung Chun-ying refused to spill the beans about how he and the Executive Council decide to oust HKTV.

Wong said that the public were angry - more than 80,000 of them took to the streets last Sunday - not because they were unhappy about the loss of HKTV in particular, but because of this government failure to explain itself.

"Let's put all the political theories behind us, and stop debates on whether citizens should have the right to elect the chief executive. But are you meddling with my choice of entertainment or TV station? Must we all buy the type of toilet paper designated by the government?"

In the eyes of his peers in the telecoms and media industries, Wong, who has two children, is a very smart man who loves challenging the status quo.

"He is full of confidence. As for whether he is arrogant, I would say: not really. He just says no to nonsense," IT lawmaker Charles Mok said.

Media veteran and political commentator Stephen Shiu Yeuk-yuen also has a high regard for the man, describing him as among the "top 10 business heroes of Hong Kong".

"He created two miracles - one in long-distance calls and another in broadband business."

The two successful licence applicants, PCCW's Hong Kong Television Entertainment Company and i-Cable's Fantastic TV, are both backed by top businesses. Wong built his billion-dollar empire from scratch.

Beijing loyalist Ng Hong-mun said Wong was an example of the "Lion Rock spirit": you work hard to succeed.

Wong finished Form Five at Munsang College in 1979, and then partnered with two classmates to open a tutorial school in Mong Kok. The three each contributed HK$1,000 in capital, and earned HK$40,000 by attracting 400 students to the school.

Entering the department of electronic engineering at Chinese University, he figured out another way to earn extra cash: selling textbooks to his classmates. The books were quite expensive in Hong Kong shops, so Wong flew to Taiwan to source them.

IBM gave him a job as a management trainee once he graduated. In 1989, Wong migrated to Canada and started a computer trading company with his cousin, specialising in offering long-distance calls on the cheap.

Noting the business potential in Hong Kong, Wong moved back home, and then founded City Telecom.

City Telecom (CTI) leased capacity from US telecoms companies to benefit from the lower rates on calls originating from that country. This introduction of callback technology broke the monopoly of Hongkong Telecom in long-distance calls.

"Before CTI's participation in the market, long-distance calls used to cost more than HK$10 a minute in the 1990s. Now a call to Canada can cost less than HK$1, and only a few dollars more for other countries," lawmaker Mok said.

A series of commercials promoting its IDD service earned Wong praise as a "marketing genius", but not without controversy. One ad that featured a sexy woman and a narrative saying "get as much as you want" became infamous.

CTI also started offering internet broadband services under Hong Kong Broadband Network in 2000.

But it was in 2008 that Wong became a household name.

He was with Asia Television for just 12 days, making him the shortest-lived CEO at the station. Wong's management style, and his contention that "ATV shouldn't be CCTV on channel 10" proved too much for the station to handle.

But his TV dream did not end there.

After filing an application for a licence in 2009, CTI sold all its telecommunications-related businesses in April. The company was renamed HKTV, signalling Wong's full devotion to the TV business.

"Doing telecommunications was no longer challenging for me," Wong told an audience of 3,000 at a Hong Kong public forum last week.

"I couldn't take it anymore. Several million dollars would fall into my pocket if I simply sat there and did nothing.

"I want to do something I like, a job that will make me want to go to work everyday."

Wong symbolises a green light for change. The respect for him did not waver after his decision to fire 320 staff members in the wake of the licence rejection.

HKTV actress Rain Lau Yuk-chui said: "A silly man dumping so much money into the TV business - such a chance is hard to come by. It is vital to have such a person to foster growth for the industry.

"Mr Wong loves challenges," she added.

The station's chief director of drama productions, So Man-chung, went further, comparing Wong to late Apple founder Steve Jobs and HKTV to Disney entertainment pioneer Pixar.

"Ricky is always humble when asking questions. He wants to learn every technique, and he respects the work of everyone, even drivers. He uses his actions to show his sincerity, and anyone can talk to him one on one."

Now Wong faces the biggest obstacle of his career. Some friends have suggested that he turn to local politics. But he has decided against taking that step for the moment.

Wong thinks he can do more good for Hong Kong doing business than by organising social movements
.

"I'm not a democracy fighter. I'm a bit leftist," said the member of the Zhejiang committee of the Chinese People's Political Consultative Conference.

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Ricky Wong Wai-kay

Age: 51
Education:
Munsang College
BSc in electrical engineering, Chinese University
Career
1985: Worked at IBM as management trainee
1989: Migrated to Canada where he started a computer trading company with his cousin Paul Cheung Chi-kin, focusing on long-distance calls
1992: Started City Telecom in Hong Kong
2000: Hong Kong Broadband Network, a subsidiary of City Telecom, obtained the local wireless Fixed Telecommunications Network Services licence
2003: Hong Kong Broadband Network launched pay-TV service
2009: Application lodged for free-to-air TV licence
2013: The government announces it has rejected HKTV's free-to-air licence bid

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Article 3:

Why granting a licence to HKTV would be good for the market

Source:  SCMP (Editorial/Opinion piece)

It took an act of divine intervention to deny Hong Kong Television (HKTV) a free-to-air licence in the recent government exercise, I can exclusively reveal.

Consider the circumstances: there are four existing players in the TV market, two with free-to-air licences (TVB and ATV) and two with cable operations (Now TV owned by PCCW, and i-Cable owned by Wharf). There were three applicants for new free-to-air licences: the two cable operators, and HKTV, owned by maverick media personality Ricky Wong Wai-kay.

The government had previously indicated that there was no limit to the number of additional licences that could be issued. The Broadcasting Authority, the principal advisory body, had supported all three applications.

In the circumstances, the decision by the Chief Executive in Council, after more than two years of consideration within the administration, came as something of a surprise: there would after all be a limit on the number of new licences issued, the successful ones were those by the incumbent cable operators and the sole new bidder would be the only applicant to miss out.

Does this result ring any bells? Regular churchgoers will have spotted the parallel immediately. The Gospel according to Saint Matthew, Chapter 13, Verse 12: "For whosoever hath, to him shall be given, and he shall have more abundance…"

Enough frivolity, we must blow away some of the froth and focus on key issues.

Let us deal with the froth first. Of course, final authority rests with the Chief Executive in Council and of course the contents of its deliberations must remain confidential. And there is absolutely no way a previous minister would or could have promised HKTV that a licence would be granted. Bearing in mind all the hoops to jump through, it is simply not in the minister's gift. The most anyone could have said is that interested parties were free to apply if they felt they met the conditions.

All that said, given the political storm fast erupting, it is essential that the government give a much more detailed explanation for its thinking.

The main angle that needs to be addressed is the administration's commitment to open competition. It is sometimes overlooked that the minister responsible for broadcasting issues - the secretary for commerce and economic development - is also responsible for competition policy.

One explanation for the decision to approve only two licences is a consultant's report, which suggested the market could only support a total of four free-to-air licences.

But that report presumably does not tell us which four, and the traditional Hong Kong way of settling an issue like this is to let the market decide: give all qualified applicants a licence and see who survives.

The consultant could be wrong: it might be only three, it could be all five. But the government should not be taking the decision on the public's behalf; it should be made by consumer choice.

If we set the purest option on one side for a moment, and accept that the market should be expanded "step by step", then the question arises who should get the first new licences.

From the perspective of competition policy, priority should surely be given to new applicants not already present in the market, provided they meet the minimum conditions.

Since all three applications were endorsed by the Broadcasting Authority, we can assume that HKTV did meet the conditions.

The logic here is that a new entrant is starting from scratch and needs time and space to build up market share. Existing operators would still be able to join in later because they have a base from which to grow, whereas the new guy would find it very difficult to start out when there were already four free-to-air licencees out there.

So, there you have it, even if HKTV were judged to be the weakest of the new applicants (and we do not know for sure that was the case), provided it met minimum conditions, the company should still have got the first new licence to be issued, on competition policy grounds.

Before closing, I should finish the quote from Mathew which I began above "…but whosoever hath not, from him shall be taken away even that he hath."

Poor Ricky. We should all remember him in our prayers.

Mike Rowse is managing director of Stanton Chase International and an adjunct professor at the Chinese University of Hong Kong. 

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Article 4:  

Exco’s HKTV deliberations are confidential, says Leung Chun-ying

Source:  SCMP

Chief Executive Leung Chun-ying on Tuesday once again refused to explain why his government had snubbed Hong Kong Television Network’s application for a free-to-air television licences, maintaining that Executive Council deliberations had to be kept confidential.

Leung had previously refused calls to reveal the rationale behind the government’s rejection of HKTV’s bid by citing the fact that judicial proceedings were ongoing. But, on Monday, Philip Li Koi-hop of the political fringe group People’s Opposition Party withdrew his application for a judicial review.

Asked on Tuesday if it was now time to explain the decision, Leung said on Tuesday before an Exco meeting, “It does not matter if there is a judicial review or not, the government does things in accordance with the established mechanism.”

“As we all know, Exco has long operated on the basis of confidentiality and collective responsibility. It was the same before the 1997 handover,” Leung said. “We must stick to this system”.

HKTV, the most high-profile of three licence applicants, and most anticipated by viewers, was left out when the government announced it would grant licences only to the two other applicants– i-Cable’s Fantastic TV and PCCW’s HK Television Entertainment Company.

The decision not to grant HKTV a licence drew an 80,000-strong march 10 days ago, followed by a week-long protest outside the government headquarters. Thirty-four lawmakers – including pan-democrats and some from the pro-establishment camp – have signed a petition pressing his administration to give HKTV a licence.

As the controversy continues, Leung’s score in a popularity survey by Chinese University has fallen to its lowest-ever level.