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The Office of the Telecommunications Authority (OFTA) published today (October 16) a consultation paper - "Implementation of the Full Liberalization of the Local Fixed Telecommunications Network Services Market from January 1, 2003" - to invite comments on the implementation issues of the licensing of additional local fixed wireline-based networks for operation from January 1, 2003.
"We are committed to the progressive liberalization policy for our telecommunications market. As announced in May 1999, the moratorium on the issue of further local fixed network licences for the construction and operation of new local fixed wireline-based networks will end on December 31, 2002. To press on with our commitment, we would invite new applications in 2001," said Mr Anthony S K Wong, the Director-General of Telecommunications.
The Government's well established principle is that there would be no pre-set limit of number of licences except for physical constraints such as scarcity of spectrum. Accordingly, the Government will not impose any pre-set limit on the number of licences for the operation of additional fixed wireline-based networks. However, applicants must submit evidence on their financial capabilities to ensure that they will fulfill their submitted plans.
"In line with our transparent and fair regulatory regime, we would like to seek input from the industry and interested parties on the implementation issues before finalizing the rules for invitation of applications by end this year," continued Mr Anthony S K Wong.
In the consultation paper, the TA invites comments on the measures to facilitate the roll-out of new local fixed wireline-based network licensees as soon as practicable, the arrangement for granting authorizations under section 14(1) of the Telecommunications Ordinance to the new licensees for the access to space in buildings and for road opening, and the arrangements for existing local wireless fixed network and external facilities operators to operate new local fixed wireline-based networks.
"With the licensing of additional local wireline-based fixed telecommunications networks for operation from January 1, 2003, the local fixed telecommunications market will be fully liberalized. This should attract more investment in network infrastructure, which would in turn further strengthen Hong Kong's competitiveness as a regional telecommunications and Internet hub. Consumers will also benefit from increased choice of quality services at reasonable prices," concluded Mr Anthony S K Wong.
The consultation will last four weeks until November 13, 2001. Subject to finalization of the rules for inviting application after considering views received from the consulted, the Government will invite applications by end 2001 for licences for the operation of additional fixed wireline-based networks from January 1, 2003. The licences for the operation of additional fixed wireline-based networks from January 1, 2003 will be issued as early as possible in 2002, but will be effective only from January 1, 2003.
Details of the consultation paper can be viewed at OFTA's homepage at http://www.ofta.gov.hk.
Background
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The Government has adopted a progressive liberalization policy in liberalizing the local fixed telecommunications market in Hong Kong. After two rounds of extensive consultation in April and September 1998, the Government announced its decision in May 1999. The decisions are to, among others,
(a) issue licences for the operation of local wireless-based local FTNS, and permitted the Hong Kong Cable Television Limited to offer telecommunications services using cable modern technology over its cable network subject to certain binding commitments. Five local wireless-based FTNS licences and a FTNS licence were issued in early 2000. Together with the four incumbent local wireline-based FTNS operators, we now have a total of 10 local FTNS operators.
(b) to extend the moratorium on the issue of further local FTNS licences for the construction of new local fixed wireline-based networks to December 31, 2002, subject to satisfactory commitments from the three existing new FTNS licensees (New T & T Hong Kong Limited, Hutchison Global Crossing Limited and New World Telephone Limited) on further network roll-out by end 2002. The Government shall invite applications in advance for new licences for the construction of competitive networks for operation from January 1, 2003.
To be consistent with the decision on the Moratorium, the Government would require until December 31, 2002 that all external facilities licensees shall use the circuits of local FTNS operators for their backhaul, i.e. circuits linking their cable landing points or satellite earth stations to the international gateways.
The decision to extend the moratorium is a well balanced decision as the quickest way to provide effective competition to the then Hong Kong Telecom. The three existing new FTNS licensees subsequently provided commitments to roll out their network until end 2002, which would enable 50 per cent of the residential line customers to have an alternative choice of local fixed telecommunications services providers.
To implement the announced policy, the Government pledged in 2000 and 2001 Policy Addresses to invite applications by end 2001 for new local wireline-based FTNS licences for operation from January 1, 2003. In line with the well established transparent and fair regulatory regime, the Telecommunications Authority invited inputs from the industry and interested parties on the implementation details before invitation of applications.
End/Tuesday, October 16, 2001
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