The Hong Kong government will referee the battle between Star TV and the Wharf Cable network over Star’s right to have seven channels aired on the newly launched cable net.Wharf Cable launched over the weekend without airing the Star TV channels supposedly required under the terms of Hong Kong’s first cable TV license. “My office is now mediating between the two companies and we hope to have the matter resolved within days,” said James So, secretary of the Recreation and Culture Dept. “Clearly they don’t want to enter into a cutthroat competition and we don’t want them to enter into a cutthroat competition because it would not benefit the consumer.” He said his department would have to examine a number of technical issues before deciding whether to impose a penalty. So said if Star could prove it was ready to launch a satellite pay TV service , Wharf must carry it or face the consequences. The government license allows for a maximum penalty of forfeiture of the $ HK 50 million ($ 6.5 million) performance bond. “The crucial part is that Star TV has the capability of sending the signals up in encrypted form,” So said. Star TV has said it advised Wharf that the launch of its pay-TV service was ready and the new channels’ debut could coincide with the launch of Wharf’s own service. However, Wharf declined to run Star’s BBC, Prime Sport and MTV channels (free to air services of Star’s basic package) and the four pay channels (English movies, Asian movies, children’s channel and Asian news and business channel). Star quashed the latest whisper that part of the problem was caused by a shortage of transponders. “This is not a transponder issue,” Star corporate communications manager Douglas Gautier said.