Hong Kong Reforms May Have Limited Appeal

1/25/1998 7:00 PM Eastern

Hong Kong -- Hong Kong's push to abolish restrictions
on foreign ownership of satellite TV broadcasting companies based in the Special
Administrative Region is unlikely to draw back companies that have bypassed it or already

'I do not see any company that left here that will
return as a result of this, although it will be an advantage when it comes to attracting
newcomers to the region,' said a senior staffer with a Hong Kong-based channel

Added an executive with a Singapore-based platform,
'It's good for Hong Kong, but it will not make us move back there. Companies
invest too much in their base and, in these difficult economic times, it makes no sense to

Earlier this month, broadcasting, culture and sport
secretary Chau Tak-hay announced that the 49 percent cap on foreign ownership of companies
permitted to uplink from Hong Kong will be removed.

Hong Kong-based foreign-TV-channel providers have had to go
through Hongkong Telecom's earth station to send their signals to a satellite for
redistribution throughout Asia.

Chau said the measure would 'facilitate the further
development of Hong Kong as a regional broadcasting hub.' Other measures that he
announced included a flexible length of license, lasting as little as a year and up to 12
years in duration, and a standard license application regardless of the type of
programming. The government also scrapped the rule that the majority of a satellite TV
company's directors had to live in Hong Kong.

The moves were made to stem the stream of companies that
have either relocated their base to Singapore from the SAR, such as ESPN Asia and
Discovery Channel Asia, or that bypassed Hong Kong completely, including The Walt Disney
Co., HBO Asia and MTV Asia.

Singapore has been able to attract a number of
international broadcasters to locate there because of its liberal uplinking regulations,
tax holidays and assistance with moving and finding premises. However, Chau ruled out the
SAR offering any tax incentives for companies interested in locating in Hong Kong.

S.K. Fung, president of NBC Asia as well as of the Cable
and Satellite Broadcasters Association of Asia, welcomed the liberalization, But, he
added, 'this is long overdue. It should have been done years ago because up to now,
the effect of the cap has been to exclude foreign media companies.'

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