CABLE NETWORK CONNECTIONS (Payment by residents of private houses)

Mr Heng Chiang Meng asked the Minister for Information and the Arts why residents of private houses are required to pay for cable network connections whereas Housing and Development Board flat residents obtain their connections free when the network is intended to be the platform for IT2000, a national programme.

The Minister for Information and the Arts (BG George Yong-Boon Yeo): Mr Speaker, Sir, funding for cable TV wiring for both HDB and private residential estates is based on the principle of cost-sharing negotiated between the cable operator and home owners. Much of the cost of installing the cable network in HDB estates is shared between HDB as lessor and SCV. Residents are also required to pay a small installation fee if they wish to subscribe to cable TV and additional TV services. Under the agreement between SCV and HDB, SCV takes over and upgrades the existing central antenna system in all HDB estates and is responsible for their maintenance.

SCV will apply the same principle of cost-sharing for private housing estates. It is prepared to meet the owners, developers or management corporations of such estates to discuss equitable cost-sharing formulas.

The HDB-SCV cost sharing formula is probably not appropriate as a model for private estates. HDB estates are a special group. They have a common lessor, are generally consistent in design and have high unit concentrations. There are therefore economies of scale in installation. Private estates are less straightforward. SCV will have to customize installation for each of them.

Mr Heng Chiang Meng (Cheng San GRC): Sir, may I ask the Minister whether it is true that cable TV will also be a platform for IT2000 and whether the Singapore Broadcasting Authority has the intention to link it to every home so that every household can take part in the national programme? May I ask what the Government will do in cases where the private households just cannot afford the link-up?

BG George Yong-Boon Yeo: For new developments, we will require the installation to be done. For existing developments, this will have to be phased in gradually and I do not see a problem for most private estates because the cost involved is not huge. If management corporations find it difficult to foot out a high upfront cost, SCV is prepared to negotiate a low upfront installation cost but recover the cost back later in higher subscription costs. But the objective is eventually to have all the households in Singapore wired onto the information highway.

Mr Heng Chiang Meng: Sir, my point is what if some private households cannot afford or will not do it on the principle that the Government is paying for HDB households? So why should it not pay for private houses since HDB actually shares the cost with Singapore CableVision? When HDB has a deficit, the Government actually gives HDB a grant for covering the deficit which means that in actual fact, in the end, the cable links to HDB flats are being paid for by the Government. In such a case, why should the Government not pay for private houses?

BG George Yong-Boon Yeo: Mr Speaker, Sir, in general, HDB is not paying more than it would have to pay to maintain the existing cable system, which we call the MATV system, as opposed to the new cable ready central antennae system which we call the CATV system. For new flats which are already wired for cable television, the full cost is recovered from the buyers. For old flats where MATV systems are due for replacement, HDB will pay what it would have to pay anyway for the MATV system and the rest will be topped up by SCV. For flats which already have the MATV system and are not yet due for replacement, HDB will cough up an amount roughly in between zero and what it would have cost them to completely replace the system. So it is not as if the laying of IT infrastructure for HDB estates requires additional funding by HDB. In general, they are paying what they would have to pay anyway.

I think Mr Heng's question concerns what happens if private housing estates voluntarily opt out from the cable TV system and whether we would require them by law to install such a system. I think this is a bridge we will cross when we come to it. Let us try it out on a voluntary basis first, find out the extent of their problem before deciding whether legislation is necessary.

Mr Heng Chiang Meng: Sir, I think the Minister has missed my point. My point is that the HDB's link-up is being paid for by the Government because, although HDB pays for it as a landlord, one must remember that HDB's yearly operating deficit is being funded by the Government through a grant to HDB. If HDB had not paid for this cost, HDB's deficit would be smaller and the Government therefore grants a smaller amount. In this sense, although it is being paid by HDB, it is actually being paid by the Government. And I am saying that if it is being paid for by the Government, then the people of Singapore living in private estates should also get the same benefit.

BG George Yong-Boon Yeo: I do not think that logic applies. HDB estates are generally subsidised. They are not being additionally subsidised for cable television. HDB is paying what it would have to pay anyway for the MATV system. In fact, HDB would have to pay less in the future because the future maintenance of the CATV system would be undertaken by SCV, and not by HDB.

Mr Heng Chiang Meng: Sir, does the Minister deny that the HDB actually gets a grant from the Government to cover its operating deficit on an annual basis?

BG George Yong-Boon Yeo: Yes, of course, HDB does get such a grant. And it would require less when SCV takes over the central antennae system because the maintenance of that system would then be done by SCV instead of HDB.

Mr Heng Chiang Meng: Sir, therefore, in such cases, if the HDB dwellers co-pay for the linking up of this cable television network, then the HDB's deficit would be much smaller and the grant would also be smaller. But because HDB now pays the share of the cost and the residents do not have to pay, the grant is bigger.

BG George Yong-Boon Yeo: Those living in housing estates and who subscribe to SCV would have to pay an installation charge and, in addition, they have to pay a monthly subscription charge.