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Focus: Hong Kong to establish new Communications Authority in the next move towards convergence review

31 August 2011

In brief: Hong Kong will establish a new Communications Authority as a unified regulator for both the telecommunications and broadcasting sectors, marking the next stage in the Government's long-awaited review and consolidation of the regulatory regime governing the converging telecommunications and broadcasting industries. Partner David Wenger (view CV), Senior Associate Adrian Fisher and Trainee Lawyer Ryan Ho report.

How does it affect you?

  • The current Broadcasting Authority and Telecommunications Authority will be dissolved, and their functions transferred to the new Communications Authority, which will be formally established in the coming months.
  • If you conduct business in the broadcasting, media or communications industries, the Communications Authority will be the new regulator of your core business activities.
  • The Hong Kong Government and the Communications Authority are to review the existing Telecommunications Ordinance and the Broadcasting Ordinance, with the aim of rationalising regulation of these industries through one consolidated ordinance.

Background

The responsibility for supervising the broadcasting and telecommunications sectors in Hong Kong currently rests with two separate regulators:

  • the Broadcasting Authority, which administers the Broadcasting Ordinance and parts of the Telecommunications Ordinance, and has the power to issue and enforce broadcasting licences, deal with complaints and censorship issues, and enforce fair competition in the broadcasting market; and
  • the Telecommunications Authority, which administers the Telecommunications Ordinance and the Unsolicited Electronic Messages Ordinance, and has the power to issue and enforce telecommunications licences (including carrier and facilities licences), manages radio frequency spectrum allocation and enforces fair competition in the telecommunications market.

The Broadcasting Authority is supported by its executive arm, the Broadcasting Division of the Television and Entertainment Licensing Authority (the TELA). The Telecommunications Authority is supported by its executive arm, the Office of the Telecommunications Authority (the OFTA).

For several years, the Hong Kong Government has indicated its intention to move away from regulation on a sector-by-sector basis to a more unified, flexible approach.

In a March 2006 consultation paper on the establishment of the Communications Authority, the Government argued that a single regulator was necessary because technological convergence has blurred (and will continue to blur) the distinction between the telecommunications and broadcasting industries. The application of two sets of regulations by two different regulators to what is increasingly becoming a consolidated industry is unwieldy and inefficient. A unified regulator should (in theory) mean there is more consistency in regulation, as well as greater operational and administrative efficiency.

The establishment of a single unified regulator also follows an international trend (eg the UK Office of Communications was established in 2003 and the Australian Communications and Media Authority in 2005).

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The new Communications Authority

The Communications Authority Bill, which was introduced by the Hong Kong Government in June last year, was passed by the Legislative Council on 30 June 2011. The Communications Authority Ordinance was then gazetted on 7 July 2011. The Government has indicated that the preparatory work required to establish the Communications Authority will take around nine months to complete, after which the Communications Authority will be formally established, and the Telecommunications Authority and Broadcasting Authority dissolved.

The new Communications Authority will administer and enforce the existing Broadcasting Ordinance, the Telecommunications Ordinance, the Broadcasting Authority Ordinance and the Unsolicited Electronic Messages Ordinance. The existing statutory powers and functions of the Telecommunications Authority and the Broadcasting Authority will be transferred to the Communications Authority.

The Communications Authority will comprise a governing board consisting of between five and 10 members, including a chairperson, with appropriate expertise who will be appointed by the Chief Executive of Hong Kong. The Authority will also comprise a public officer and a Director-General of Communications with responsibility for implementing the Communications Authority's decisions.

Further, the Hong Kong Government will transfer the functions of the OFTA and the Broadcasting Division of the TELA to the new Office of the Communications Authority (the OFCA). The OFCA, which, the Government has indicated, will also be established within nine months, will be the executive arm of the Communications Authority and be tasked with supporting the Director-General in the discharge of their functions.

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Next steps

The Hong Kong Government is now seeking approval from the Legislative Council's Establishment Subcommittee and Finance Committee of the organisational structure of the Communications Authority (and the OFCA).

The passing of the Communications Authority Ordinance is only the first stage in the regulatory reforms the Hong Kong Government has foreshadowed. The Government has indicated that it will task the Communications Authority with reviewing the Telecommunications Ordinance and the Broadcasting Ordinance, with a view to creating one unified ordinance that will apply to the broader communications industry. There is likely to be a lengthy review and public consultation process, and it is expected to be some time before any draft legislation is released.

We are monitoring the Hong Kong Government's progress, and will keep you updated as to the formal establishment of the Communications Authority and the Government's continuing review of the telecommunications and broadcasting regulatory environment.

If you have any questions about the new Communications Authority, or the effect it may have on your business, please contact any of the people below.

For further information, please contact:

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