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Speech by SCIT at IT associations (with photos)

Following is a speech by the Secretary for Commerce, Industry and Technology, Mr Joseph W P Wong, at a luncheon organised by IT associations today (March 3):

Ladies and Gentlemen,

Good afternoon. Thank you for inviting me to this luncheon. I am particularly grateful for your generosity as this luncheon, which is intended to welcome the new Secretary for Commerce, Industry and Technology, is the third of its kind in four years. I assure you that the Government as a whole remains firmly committed to the cause of promoting information and communications technology (ICT) in Hong Kong.

I do not have any technology background or expertise, and my only past working experience in ICT was to promote enthusiastically the learning and application of information technology in schools when I was Secretary for Education and Manpower some years ago.

I make no apology for not being a technologist.  As Secretary for Commerce, Industry and Technology, my job on ICT development in Hong Kong is to set a vision, devise a strategy to fulfil such a vision and implement the necessary measures to deliver the results which will bring both economic as well as social benefits to our society.  The vision enshrined in the Digital 21 Strategy is, and I quote, "to enhance and promote Hong Kong's information infrastructure and services so as to make Hong Kong a leading digital city in the globally connected world of the 21 century". What I want to do is to define more clearly the role of the Government in pursuing this vision.  I see the Government playing an active part in engaging the stakeholders, and all of you here this afternoon are very important stakeholders, developing industry-friendly policies, creating an appropriate regulatory environment conducive to competition and consumer protection, and promoting investment and innovation for the benefit of entrepreneurs, workers, consumers and the economy at large.

We have a strong foundation to develop our ICT industry. I don't need to bore you with statistics. Suffice to say, our mobile phone penetration, broadband coverage, external connectivity capacity, and new wireless or IP based services are among the highest in the world.

And it is a good omen for our industry that in the beginning of the Year of the Dog we were able to sweep six top awards in the Asia-Pacific ICT Awards just two weeks ago. Congratulations and well done!

Very few industries, if any, face so much change brought about by technological developments as the ICT does.  Convergence and "triple play" over a single transmission network of telecommunications, broadcasting and broadband access services is probably the most familiar example. Voice over the Internet Protocol, or VoIP, is just another.

I am very positive about these developments: new technologies provide a platform for business opportunities, new investment and innovation - and most of the time the service innovation, new business models and market competition that they engender are good for the consumer. In this respect, the best response of Government is to pursue a public policy that facilitates these developments and opens up new opportunities while leaving business decisions to the market.

With this introduction, let me tell you more specifically how I see my agenda in the coming 12 months.

First, to meet the impact of convergence, the Government needs to respond positively to make our regulatory regime more efficient and to encourage the exploitation of new opportunities. We will announce later in the afternoon our proposal for the merger of the Broadcasting Authority and the Telecommunications Authority in a public consultation paper. My aim is to introduce the necessary legislation before the end of the year to give effect to the establishment of a unified regulator which we propose to call Communications Authority.

As we all know, technological advancement has been blurring the boundary between telecommunications, broadcasting and information technology. It is only natural that convergence at the technological and market levels be matched by unification at the regulatory level. This is becoming the international trend from the Federal Communications Commission (FCC) in the US and the Canadian Radio-television and Telecommunications Commission (CRTC) in Canada, to the more recent establishment of the Office of Communications (Ofcom) in the UK and the Australian Communications and Media Authority (ACMA) in Australia.  As Hong Kong is probably one of the leaders in the world in convergence and service innovation at the market level, the case for a unified regulator is obvious in terms of regulatory efficiency and consumer benefits.

The proposed Communications Authority will administer and enforce the existing Broadcasting Ordinance and Telecommunications Ordinance.  We propose to transfer to the new authority the existing statutory powers and functions of the Broadcasting Authority and Telecommunications Authority on an "as is" basis.  To enable it to get on with its job quickly, we do not intend to make any changes to the regulatory and licensing arrangements under these two Ordinances at this stage.  However, it is our intention, once the Communications Authority is established, to start examining various provisions in the two Ordinances with a view to maintaining consistency and improving regulatory efficiency and consumer protection.  

The public consultation period will be three months and I am confident that I can count on all of you here to provide us with the informed views of the ICT industry.

Second, it is important that our ICT industry secure as much international presence and prominence as possible.

As you know, Hong Kong will host the ITU TELECOM WORLD 2006 at the end of this year. It is the first time this event is held outside Geneva since its inception in 1971.  With the sterling support of the Central Government, we fought for the privilege to host the event back in 2003 because we thought it would be beneficial to the local ICT industry and also Hong Kong generally. It is an event that is going to put Hong Kong and Hong Kong IT industry on the map and enhance Hong Kong's visibility in the Mainland and the rest of the world.  It will raise the profile of Hong Kong and project Hong Kong's image as the telecommunications and broadcasting hub in the Asia Pacific.  It is going to attract 900 exhibitors and 60,000 visitors and generate some $900 million worth of income for the local hospitality industry. It will also strengthen Hong Kong's credibility as the event capital of Asia.

We have made a good start: 70% of the exhibition space have by now been allocated or reserved. We are intensifying our marketing and fund raising efforts. We are working hard and we aim to make ITU WORLD TELECOM 2006 the most successful telecommunications event ever held. To this end, I know I can count on your support.

Third, this is a critical year for the rollout of digital terrestrial television broadcasting, DTT for short, in Hong Kong. Before the end of the year, the Government will have to decide on the technical standard on which to base future DTT broadcasting. The two incumbents, TVB and ATV, have to start their new digital programmes in 2007 and reach a 75% coverage of Hong Kong with their new digital network by 2008, in time for the 2008 Olympics.

It is a major endeavour in terms of engineering infrastructure, hardware design and manufacture, and high quality production.  TVB and ATV will invest hundreds of millions of dollars in the next few years on DTT.  It will benefit not just the conventional IT sector, but also the creative industries, such as digital entertainment. The consumers will benefit from more diverse and high quality television programme services, including HDTV, and possibly mobile TV and associated value added services such as interactive multimedia features.  I see the Government and the industry working together on various fronts, such as service planning, consumer education, promoting DTT uptake, preparing for in-building reception and hardware design and supply, and so on.

Also on digital transmission, I would wish to take a critical and positive look at the case for introducing digital audio broadcasting (DAB) in Hong Kong given the availability of spectrum and likely market demands.  In fact, digital technologies offer opportunities that go beyond sound broadcasting.  As we have seen the use of 3G technologies for multimedia and broadcasting applications on mobile phones, we are also seeing the adoption of new digital technologies in other places for multimedia and broadcasting services on small handheld mobile display devices.

As these developments give rise to new opportunities in investment and consumer benefits, they also present regulatory challenges.  But the Government's position is clear.  We provide policy support to facilitate technological and business development and we do not interfere with the actual delivery of new services and products other than for consumer protection.

Fourth, technology also has its downsides if used irresponsibly, or worse, exploited with malicious intent.  The spamming problem is a good example.  It is expanding in form, intensity and coverage, from fax, e-mail, SMS to voice messages generated by automatic interactive voice devices as telephone calls.  

We are determined to tackle unsolicited electronic messages.  I am grateful for the support of our ICT industry in this endeavour.  You supported the community and us in the launch of a multifaceted "STEPS" anti-spamming campaign last year.  You have also provided invaluable input and feedbacks to us in response to the first public consultation exercise, and in subsequent informal but focused discussions with CITB.  Your input culminated in the launch of the second public consultation in January this year.  I think our proposals are striking the right balance between protecting the rights of the recipient on the one hand, and allowing some room for the development of e-marketing in Hong Kong on the other.  We will refine our proposals in the light of your further comments, which I am sure you will submit by March 20, if you have not already done so.  I will then introduce an anti-spamming bill into the Legislative Council in the middle of this year.

Fifth, we will address the concerns and key issues facing the ICT industry.  I am aware that OFTA is consulting the telecommunications industry on the introduction of broadband wireless access and the important but complex question of fixed-mobile convergence. And CITB is conducting a spectrum policy review and its consultants are engaging the stakeholders. These are key issues, from a policy, regulatory and technological standpoint, that will underpin future development of the telecommunications market. On the one hand, we need to facilitate the early adoption of innovative technologies, reap their benefits and let the market decide how to go about it. On the other hand, we need to strike the right balance between the aspirations of the parties concerned, namely the Government, the industry, and the consumer. I have no answer today but I know we need to find one quickly.  

Sixth, we are committed to sustaining the momentum of the e-Government initiative. We are also committed to the outsourcing strategy in the implementation of Government IT projects. We have improved our procurement arrangement from the previous framework. I am very glad that a positive dialogue has been going on between our ICT industry and the Office of the Government Chief Information Officer (OGCIO) on improving our procurement arrangements. We will soon launch a pilot programme for three years for contractors to own the intellectual property of Government IT projects, providing them with an incentive to participate in Government IT projects, as well as an asset to apply in the design of other IT projects.  It will also enrich their capability and competitiveness in the market place, inside and outside Hong Kong.

I am grateful for your support for our new e-Government strategy that envisages a One-Stop-Portal for all Government services, at a total capital investment of $260 million, the bulk of which will be disbursed to the contractors, service providers, software developers and business partners of the industry.  I am sure we will get the necessary funding approval from the Finance Committee of our Legislative Council this afternoon to enable the early implementation of the project.

Seventh.  We will continue to work closely with the ICT industry in specific areas of interest.  For example,

* We will work with industry to raise the professional competency and qualification for the ICT industry. I know for example the Hong Kong Computer Society is conducting a study on a qualification certification system.

* We are working with the six major industry organisations concerned to launch the first Hong Kong ICT Awards Scheme, which will give recognition to excellence in the various fields and showcase Hong Kong's achievements in these areas.

* We are exploring with the Wireless Technology Industry Association on how Hong Kong should position itself in anticipation of the introduction of the 3G services on the Mainland, and how we may leverage on the new platform based on the national TD-SCDMA standard to create opportunities for Hong Kong industry.

Eighth, we will continue and if necessary increase our support to the ICT industry in the area of applied research and development.

The R&D centres under the overall supervision of the Innovation and Technology Commission will be up and running very soon.  Two R&D centres, to which Government is committed to investing $2.3 billion, are particularly relevant to our ICT industry. The ICT R&D centre hosted by the Applied Science and Technology Research Institute, or ASTRI, will focus on communications technologies, consumer electronics, IC design and opto-electronics.  It will collaborate with universities and industry partners.  The Logistics and Supply Chain Management Enabling Technologies R&D centre will focus, among other things, on the development and application of RFID technologies, networking and infrastructure technologies, and application and decision support technologies.

Ninth, we will update the Digital 21 Strategy, which was promulgated in 1998, and has since been revised in 2001 and 2004. We will produce a fourth edition of the Strategy in 2007, and we will start public engagement and consultation this year.

It is almost an understatement to say that developments in ICT in the past decade have transformed our society beyond recognition. Just look at the Internet, the development of wireless and mobile technologies, the penetration of broadband to households, the explosive volume of information that is accessible on line, interactive entertainment, and all that. They are transforming nations, businesses, life styles, cultures and human behaviours. We need to take thorough stock of where we are in relation to the rest of the world in a globalised environment.  We need to ask ourselves whether we need a new vision, and a new strategy to ensure that Hong Kong stays as a leading digital city in the world.

I have tasked Howard Dickson to take this forward. I have encouraged him to challenge the fundamentals and be bold. He has assured me that he will engage industry extensively so that the Government and our ICT industry will have collective ownership of the Strategy that emerges in the first quarter of 2007, about a year from now.

Ladies and gentlemen, I have counted nine things we need to do in the coming 12 months.  In Cantonese, nine rhymes with dog which is the symbol of this new lunar year.  It also rhymes with enough.  So I better stop here.  There is nothing political if I end my speech with a quote from one of Chairman Mao Zedong's famous poems, "So many things need to be done, and always urgently. The world rolls on, time passes. Ten thousand years is too long, seize the hour, seize the day."  How apt this is to the technology based business world! I am confident that we can work together to ensure that the ICT industry meets its aspirations and challenges. I know I can count on your support and with this support. I will be able to deal with the nine action items that I have just outlined and create a win-win-win situation for all of us: society, industry and the consumer.

Thank you and thank you for your patience.

Ends/Friday, March 3, 2006
Issued at HKT 15:32


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