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The following is the speech by Mrs Carrie Yau, Secretary for Information Technology and Broadcasting (designate), to the 4th APEC Ministerial Meeting on the Telecommunications and Information Industry at Cancun, Mexico, on 25 May 2000 :

There is general agreement that convergence is happening at the technological level. The implications of these developments are far reaching. However, convergence is not just about technology. It is about services and new ways of interacting with society and doing business. It is also about responsiveness of policy makers and regulators. The nature of communications platforms today, in particular, the Internet, offers great opportunities for businesses, large, small and medium sized enterprises alike, to reach regional and global markets through the adoption of electronic commerce. The emergence of new services is expected to expand the information markets and enrich the quality of life. Such developments make it possible both for consumers to benefit from wider choice of goods and services on offer and business to benefit from better control of supplies and wider market reach.

In a small but dynamic market like Hong Kong, we see that convergence poses vast opportunities to us. Our responsiveness to the market changes enables us to make use of the technological advancement in convergence to develop services that best meets consumers' demand. Hence, we have the world's first large scale commercial roll-out of Video-on-Demand. One of our operators will, for example, extend the service by offering converged services like digital pay TV, electronic programme guides with interactive capability, broadband internet access and e-commerce portals, all from one set-top box later this year. Our excellent telecommunications infrastructure also provides very good fundamentals for us to sustain development in the information age. Our regulatory regime is one of the most open in the world. It is technology neutral and pro-competition, and we have no foreign ownership restriction in the telecommunications and information technology industries. All these help attract private investment and nourish further advancement in the sectors.

Meeting our challenges

However in this age of "Convergence" which has already begun and is developing rapidly, we will encounter some challenges. If I may share with you some of my thoughts :

* To create an environment which facilitates rather than holds back the process of change is crucial. Year 2000 is a landmark year for us as we have implemented and are implementing several major policy decisions to progressively liberalize our telecommunications and broadcasting market and to establish the legal framework to support e-commerce and benefit consumers. We have :

(i) On-line delivery of multi-media programs - removed restrictions regarding the forms of service which different types of transmission network may carry. Fixed telecommunications networks may carry television programme services; cable TV network and satellite broadcasters may carry telecommunications services.

(ii) Connectivity - enhanced connectivity through liberalization and pro-competition policy. Since February 2000, we have issued 13 new licences for external telecommunications facilities by using satellites and 14 Letters of Intent for external telecommunications facilities by using submarine or overland cables. In January 2000, we issued five new licences for local wireless fixed telecommunications network services and licensed Hong Kong Cable TV to provide telecommunications services over its cable network. We will issue new TV licences by middle 2000. We do not pre-set the maximum number of licences to be issued. The number to be issued is only subject to physical constraints (such as limitations in frequency spectrum).

(iii) Security and Privacy - enacted the Electronic Transaction Ordinance in January 2000 to give legal recognition to electronic records and digital signatures as that of their paper counterparts, and establish a voluntary scheme of recognition for certification authorities operating in Hong Kong, China. The Government has also take the lead to establish a local public certification authority through Hong Kong Post which commenced operation in January 2000. With our public key infrastructure (PKI) in place, this should boost consumers' confidence in e-commerce.

(iv) E-government - announced a Digital 21 Electronic Service Delivery as our E-government initiative. This is consistent with our objective of becoming a leading participant in e-business. By October this year, members of the public in our community will be able to apply for their driving licences, pay government bills, submit tax returns, etc. through electronic means. The benefits of creating a facilitating environment are obvious. Wider market, more business growth, more jobs and more consumer choice. Holding back will leave us in the slower lane of the information superhighway.

* The globalization of services is a new trend. Traditional policy objectives on delivery of services based on specific technology and geographical boundaries are subject to challenge. In the new global environment barriers will have the potential to impact significantly the investment in a region and could cause economic activities to move to elsewhere.

* In the global environment of convergence many of the liberalization measures are still applicable. We wish to see easier market entry. We wish to see fair competition. We also wish to see more people enjoying the services. These are fundamental to the attainment of the APEC leaders' vision of free trade and investment by 2010/2020.

* In the converged environment many new services will be offered and more transactions will be carried out across geographical boundaries. To facilitate such developments more common practices could be a way forward. We have seen the success of the Mutual Recognition Arrangement (MRA) for terminal equipment. Perhaps a similar approach for Certification Authorities on trustworthiness is a candidate for us to study in order to promote cross-border electronic commerce. We suggest that APEC should build on the work underway in the Electronic Authentication Task Group and the Public Key Infrastructure Inter-operability Expert Group and accelerate work on arrangements for cross-border authentication.

Conclusion

To encourage business in the region to adopt e-commerce so as to meet the challenge in the new globalised electronic market place, it is of paramount importance that governments should strive to enhance the awareness and understanding of businesses, especially the small and medium sized enterprises, in electronic commerce and the potential benefits that it can bring to us. As businesses are in the best position to decide the optimal amount of resources that they should deploy in pursuing their own electronic commerce strategies, to ensure that they have the right information to act on would allow the most efficient allocation and utilization of resources.

Mr Chairman, Convergence is an opportunity. It is also a challenge. Let us take on the challenge and enjoy the fast lane of the information superhighway. Thank you.

End/Friday, May 26, 2000 NNNN