Pccw Media Ltd v. The Broadcasting Authority and Another
Read the full judgment text of HCAL 97/2005 on BabelCite. This High Court CFI judgment was delivered on 26 January 2006.
1. PCCW and Galaxy are competitors in the domestic pay TV market.
Cited by 1 case
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HCAL 97/2005 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO. 97 OF 2005 ______________________ BETWEEN
______________________ Before : Hon Reyes J in Court Date of Hearing : 26 January 2006 Date of Judgment : 26 January 2006 ______________________ J U D G M E N T ______________________ I. Introduction 1.PCCW and Galaxy are competitors in the domestic pay TV market. 2.Both hold Domestic Pay TV Programme Service Licences issued under the Broadcasting Ordinance (Cap. 562) (BO). Galaxy's licence entitles it to transmit TV programmes by satellite. PCCW's licence entitles it to transmit TV programmes via a broadband fixed line network. 3.In accordance with condition 32 of its licence, Galaxy applied to the Government to extend the scope of its licence to permit transmission of TV programmes through the broadband network of Hutchison Global Communications (HGC). In support of its application, Galaxy provided various materials to the Authority. 4.Concerned about Galaxy's application, PCCW wrote some 7 letters to the Authority between January and April 2005 requesting disclosure of the materials provided in support of that application. 5.PCCW contends that the public in general and (as a competitor) PCCW in particular should have an opportunity to make representations to the Government on whether Galaxy's application should be granted. PCCW maintains, however, that it cannot make meaningful representations unless it can study Galaxy's materials and obtain some clearer understanding of Galaxy's proposals. PCCW says that it does not mind if materials are supplied to it with commercially sensitive details blacked out. 6.By a letter dated 29 April 2005 to PCCW, the Authority replied that it would not disclose Galaxy's materials. In a document (the Annex) attached to the letter, the Authority gave reasons for its decision. 7.By these proceedings, PCCW seeks judicial review of the Authority's decision refusing disclosure of Galaxy's materials. PCCW submits that in refusing disclosure the Authority erred in the following ways:
8.Although only communicated on 29 April 2005, the Authority arrived at its decision not to make disclosure at a meeting on 16 April 2005. At the same meeting, after deciding that disclosure to PCCW was not warranted, the Authority approved Galaxy's application to transmit TV programmes over HGC's broadband network. PCCW has appealed to the Chief Executive-in-Council against both the refusal to disclose Galaxy's materials and the granting of Galaxy's application. PCCW has done this pursuant to BO s.34. Both administrative appeals have been stayed pending the outcome of this judicial review. II. Discussion A. Issue 1: Whether error in relation to BO s.27 9.BO s.27 provides as follows:
10.There is no doubt that Galaxy's materials were provided to the Authority in confidence. The Authority inquired whether Galaxy was prepared to have the materials disclosed to PCCW. Galaxy refused. 11.In the Annex the Authority took the view that Galaxy's materials could only be divulged if justified in the public interest under BO s. 27(2)(d). The Annex then explains the Authority's refusal to make disclosure as follows:
12.Mr. Beresford (appearing for PCCW) submits that the Authority's reasoning is wrong in law. BO s. 27(2)(d) (Mr. Beresford say) is unqualified in its terms. It does not only apply when a new licence is being sought or a licence is being varied in some material way. The provision (Mr. Beresford suggest) covers any materials provided to the Authority in confidence. 13.In my judgment, Mr. Beresford's construction of BO s. 27(2)(d) is correct. The ambit of the section is unrestricted. But it does not follow from this that the reasoning in the Annex was invalid and the Authority's refusal to disclose must be quashed. 14.In my view, Mr. Beresford reads the Annex too narrowly and out of context. 15.By its evidence filed in these proceedings, the Authority has pointed out that, following the publication in 1998 of a consultation paper entitled "The 1998 Review of Television Policy" and at least since the BO's enactment in 2000, the Government has pursued a more permissive, "technology neutral" broadcasting regime. This means that the Government has focused on regulating the content of TV broadcasts as opposed to the "technology" or means by which that content is broadcast. 16.The Government's intent is to enable licensees to provide TV programmes through multiple modes of transmission. The Government hopes that such policy will encourage the development of a variety of forms of TV coverage and distribution in Hong Kong. 17.Given that policy, where a licensee applies to add to the modes by which his TV programmes are transmitted, the Authority might reasonably form the view that no significant variation of that licensee's existing broadcast license is being sought. The whole point of the policy, after all, is to encourage licensees to explore various modes of transmitting their programmes. 18.In those premises, the Authority might also reasonably form the view that, in general, it would usually only be when some person seeks to enter the market by applying for a broadcast licence, or when an existing licensee wants to vary the nature or content of his broadcasts, that a substantial public interest arises. In those specific circumstances, the possibility of a significant change to the existing market may impose a duty on the Authority to consult the public (including competitors) on whether the proposed change sought should be allowed. 19.I think that is all that the Authority meant by its Annex §3. It did not mean to say that, as a matter of law, BO s. 27(2)(d) only concerns particular types of applications. What it simply meant was that, given the operative policy, in practice it was hard to envisage the discretion in the public interest under BO s. 27(2)(d) being exercised in favour of disclosure except in particular types of application (of which Galaxy's proposal was not one). 20.The contrast between a mere addition to the means of transmission already permitted to Galaxy and a more fundamental variation to Galaxy's license was plainly in the Authority's mind when it wrote the Annex. This is apparent from 2 pieces of evidence. 21.First, there is the express reference in Annex §4 to Galaxy's application being essentially a matter of "licence administration" in the Authority’s view. 22.Second, the Authority has itself more fully explained its position in the 2nd Affirmation of Pui-Leong Po filed in these proceedings. In that Affirmation, Mr. Po (the Authority's Secretary) states:
23.Accordingly, on Mr. Po's evidence, the Authority did not simply dismiss PCCW's request for disclosure on the basis that BO s. 27(2)(d) was inapplicable in law. The Authority instead considered PCCW's request on its merits and decided that in all the circumstances the public interest did not call for disclosure. 24.It follows that PCCW fails on Issue 1. B. Issue 2: Whether Authority's decision irrational 25.Mr. Beresford's submissions on irrationality appear to be as follows:
26.I am not persuaded by Mr. Beresford's argument. 27.In relation to proposition (1), Galaxy's application (if approved) may lead to increased competition between PCCW and Galaxy. That may or may not be detrimental to PCCW's interest. But I do not think that the Authority is required to equate PCCW's interest with that of the public at large in considering whether or not to make disclosure under BO s.27(2)(d). No doubt PCCW is a member of the public at large. But that does not mean that PCCW's interests are equivalent to those of the public. 28.Proposition (2) is highly speculative. 29.As the Authority is at pains to stress, there has been no reduction in Galaxy's capital commitments under its licence. The investment milestones which Galaxy is required to meet as a licensee remain the same as before. The only change sought by Galaxy has been of an additional mode of transmission. 30.The newspapers and other media may speculate about changes to Galaxy's business plan in the future, but such remain pure guesses. 31.Mr. Beresford infers that there has been a change in the fundamental nature of Galaxy's licence from statements such as the following:
32.I am unable to see how the press release or Mr. Yuen's affirmation assist Mr. Beresford's case. The statements are a tenuous ground from which to deduce any intention on Galaxy's part to shy away from the contractually binding milestone events found in its licence. The investment milestones remain as conditions. 33.Mr. Beresford suggests that the statements just quoted suggest that Galaxy will not be investing as much as it originally proposed to invest in the development of a satellite network. Galaxy may or may not be minded so to conduct itself. Galaxy may or may not be entitled so to act. The evidence is far from compelling one way or the other. But, even if Mr. Beresford is right, that would seem to be a mere consequence of the "technology neutral" environment being fostered by Government policy. There is no suggestion in PCCW's Notice for judicial review that such policy is under challenge as irrational. 34.There is simply no substantive basis for PCCW to contend that implicit in Galaxy's application are changes of such a radical nature that the proposal to transmit through HGC's network constitutes an application for a new licence. 35.Nor is there any basis to suggest that Galaxy's proposal will result in the entry into the broadcasting market of HGC as a new operator. HGC is simply making its broadband network available for Galaxy to broadcast its TV programmes. 36.Proposition (3) is equally speculative. 37.A condition of the grant of a licence to Galaxy was that TVB divest itself of its former controlling interest in Galaxy. TVB has done so. 38.On 21 April 2005 TVB agreed to sell 49% and 2% of its previous 100% interest in Galaxy to Enjoy Profits Limited and Dr. Charles Chan respectively. In that circumstance, I do not see how granting Galaxy's application for an additional mode of transmission can by itself alone lead to TVB gaining dominance of the domestic TV market. 39.Nor do I see how the fact that complaints have been made about alleged preferential treatment of Galaxy by TVB can be relevant at all to this judicial review. As far as I can see, the subject of the complaints (the wrongful airing of TVB programmes by Galaxy) has no bearing on the issues here. 40.Now assume that propositions (1), (2) and (3) have some significant evidential foundation and assume that it is in the public interest that such matters be investigated. That is not the end of the story. Proposition (4) does not take the analysis very far and so is of little help. 41.What the Authority does under BO s.27(2)(d) is to weigh Galaxy's entitlement to confidentiality with the competing demands of the public interest. The Authority takes a view whether disclosure of the materials provided by Galaxy would or would not advance investigations in the public interest under propositions (1), (2) and (3). Here the Authority conducted a balancing exercise and concluded that the public interest (if any) raised by propositions (1), (2) and (3) would not be significantly furthered by a disclosure of Galaxy's materials. 42.Apart from vague suggestions and alarmist scenarios raised by PCCW, I have seen nothing in the evidence to suggest that the Authority's balancing exercise was irrational. 43.It is not enough for PCCW to allege that propositions (1), (2) and (3) give rise to a public interest. Almost by definition, just about any matter connected with broadcasting will have a public element. The burden is on PCCW to establish some unreasonableness in the way that the Authority has balanced the competing interests of Galaxy and the public at large. 44.Proposition (5) is difficult to follow. 45.It cannot be a valid ground of judicial review that PCCW believes it cannot make proper submissions to the Authority because it does not have access to material which it is in any event not entitled to see. PCCW's argument is circular. 46.It follows from my rejection of propositions (1) to (5) that the conclusion in proposition (6) is invalid. As Mr Po states in his affirmation, the Authority considered the public interest but did not believe it mandated the disclosure sought here. PCCW has failed to discharge its burden of establishing irrationality. C. Issue 3: Whether Authority's procedure unfair 47.Mr. Beresford claims that the refusal to disclose Galaxy's materials has prevented PCCW from making informed submissions as to whether Galaxy's application should be granted. 48.This is essentially the same point as Issue 2. On that, I concluded that, regardless of whether PCCW's claim to be affected by the outcome of Galaxy's application was or was not valid, the Authority could reasonably conclude that the public interest mentioned in BO s.27(2)(d) did not call for disclosure in the present case. 49.Conventionally, when an applicant for judicial review claims that an unfair procedure has been followed, he means that a government officer did not give him a reasonable opportunity to be heard before coming to a decision. That, however, is not PCCW's complaint here. 50.On the evidence, before the Authority's 16 April 2005 decision refusing disclosure, PCCW was given ample opportunity to make representations (both orally and in writing) to the Authority on why Galaxy's materials should be disclosed. Mr Beresford accepted this much in submission. 51.In the exercise of its discretion, the Authority came to a different conclusion from that advocated by PCCW. Unless that decision can somehow be characterised as irrational, PCCW has no basis of complaint. PCCW's case on Issue 3 therefore fails. D. Issue 4: Whether irrational because Galaxy's application not treated as a new application of an application for variation 52.BO s. 8(1) empowers the Chief Executive in Council to grant domestic pay TV programme licences. 53.Applications for such licences (among others) are to be submitted to the Authority (BO s. 9(1)) which will consider them and make recommendations for their approval or disapproval to the Chief Executive in Council. 54.BO s. 9(3) further specifies that applications for domestic pay TV programme licences (among others) shall be gazetted and interested members of the public shall be permitted to make representations on the proposals. 55.Under BO ss. 10(1) and (3) the Chief Executive in Council may impose "such conditions as he thinks fit" on the grant of domestic pay TV programme licences (among others). BO ss. 10(4)-(6) further stipulate as follows:
56.Reference has previously been made to condition 32 of Galaxy's licence. That provides as follows:
57.There is a similar provision in PCCW's domestic pay TV programme licence. 58.PCCW's Notice of Application for Judicial Review does not challenge the validity of condition 32. 59.Mr. Beresford argues that the Authority should either have treated Galaxy's application for an additional mode of transmission as an application for a new licence or a major variation of an existing licence. 60.If the Authority had done so, Mr. Beresford submits that either the details of Galaxy's application would have to be fully gazetted under BO s. 9(3) or PCCW should have had an opportunity to make representations about the variation fo the licence under BO s. 10(4). On one or other hypothesis, PCCW (Mr. Beresford argues) would have been entitled to see Galaxy's material as an affected party, regardless of any public interest considerations. 61.Galaxy's application (Mr. Beresford says) should have been treated as one for a new licence or as a major variation, because it implicitly entails a large reduction of Galaxy's capital commitments under its existing licence or involves a new party (HGC) as an operator. The application (Mr. Beresford suggests) "discloses a wholesale change to [Galaxy's] business model" and "must involve inevitable change to Galaxy's mode of operation, business plan and marketing and sales strategy". 62.In my view, there is no substance to PCCW's submission. 63.First, I have already dismissed the suggestion that Galaxy's application implies a change in its investment milestone commitments. Nor does it entail the entry of new operator. Galaxy's proposal does not amount to a new application. I do not think then that BO s. 9(3) comes into the picture. 64.Second, the fact is that the Authority treated Galaxy's application as a variation to its existing licence, albeit a minor one. 65.In the Authority's view that minor variation could be considered under condition 32 of Galaxy's licence. By that condition, the Chief Executive (exercising his power to impose such conditions on a licence as he sees fit) authorised the Authority to evaluate mere changes to the mode of transmission allowed by a licence. 66.As I pointed out, there is no challenge by PCCW in its Notice for judicial review to the vires of condition 32. It is too late now for PCCW to challenge condition 32 in these proceedings, if that is what it is now minded to do. 67.Third, even supposing (without deciding) that by condition 32 the Authority was only authorised to make recommendations to the Chief Executive in Council, PCCW's case on disclosure would still not be advanced. 68.In cases of variation, BO s.10(4) requires the Authority to give the licensee seeking a variation (as opposed to any other licensee) with an opportunity to make representations. Since it is not the licensee seeking variation in this case, PCCW would not be within the terms of BO s. 10(4). 69.Mr. Beresford says that nonetheless BO s. 10(4) refers to the "public interest" so that PCCW (as a member of the public and as a competitor) should be allowed a fair chance to make representations on Galaxy’s variation. To do this (Mr. Beresford stresses) PCCW needs to have sight of Galaxy's materials. 70.This last ground effectively repeats the arguments on Issues 2 and 3. Those have not succeeded for the reasons set out above. III. Conclusion 71.PCCW's judicial review fails. PCCW's application is dismissed. I shall hear the parties on costs and any consequential orders.
Mr. Roger Beresford, instructed by Messrs. Richards Butler, for the Applicant. Mr. Russell Coleman, instructed by Messrs. Wilkinson & Grist, for the 1st Respondent. Mr. Barrie Barlow, instructed by Messrs. Minter Ellison, for the 2nd Respondent. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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