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Following is a question by the Hon Alice Mak and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (May 4):
Question:
Residents from a few dozens of villages in remote areas (including Fuk Hang Tsuen in Tuen Mun, Tam Shui Hang Village and Luk Keng Village in Sha Tau Kok, and Lam Tin Village in Tsing Yi) have complained to me that as there is only one operator providing fixed network broadband Internet access services (broadband services) for their villages, the services provided are of poor quality while the fees are on the high side. In this connection, will the Government inform this Council:
(1) whether it has compiled statistics on the respective current numbers of residential units in the territory which are (i) covered solely by one fixed broadband network (fixed network) and (ii) not covered by any fixed network;
(2) in respect of the residential units mentioned in (1)(i), of the authorities' measures to ensure that the residents concerned may enjoy services with quality commensurate with the prices, given that the broadband services are monopolised by single operators;
(3) whether it will propose that the Competition Commission/ Communications Authority investigate whether the operators have abused their market power when they provide broadband services for residential units covered solely by their fixed networks;
(4) of the number of complaints about broadband services received by the authorities from members of the public in each of the past five years, and among such complaints, the number of those involving single operators;
(5) given that the Government indicated in April this year that at least three operators were actively building fibre networks in rural and remote areas, whether the authorities will consider afresh giving priority to the provision of Government WiFi, free public wireless Internet access service, to villages in remote areas by making use of such newly built networks; if they will, of the details and the timetable; and
(6) of the specific measures put in place by the authorities to encourage more operators to build fixed networks in villages in remote areas; the expected time when every residential unit in the territory will have more than one fixed network operator to choose from?
Reply:
President,
With respect to the Member's questions, a consolidated reply incorporating information from the Commerce and Economic Development Bureau and the Innovation and Technology Bureau is as follows:
As a statutory body overseeing the telecommunications and broadcasting sectors, the Communications Authority (CA) regulates the provision of public telecommunications services pursuant to the powers conferred by the relevant ordinances, including the Telecommunications Ordinance (TO) and Competition Ordinance (CO).
(1) According to the statistics of the Office of the Communications Authority (OFCA), about 87 per cent of the residential households in Hong Kong (about 2.3 million residential flats) enjoy the choice of at least two fixed network operators' (FNOs) local fixed broadband networks as at end March 2015. In other words, about 13 per cent of the residential households in Hong Kong (about 0.3 million residential flats) have only one or no broadband network coverage. However, the OFCA does not have the relevant breakdown statistics.
(2) The Hong Kong local fixed telecommunications service market has been fully liberalised since 2003. The Government adopts a market-driven regulatory framework on telecommunications to encourage competition. There is no pre-set upper limit on the number of licences for local fixed telecommunications services which is completely determined by the market. The TO does not regulate the type and charges of telecommunications services to be provided in the market. FNOs are free to provide different types of fixed telecommunications services, including residential fixed broadband service, in accordance with the conditions of their licences and based on their commercial considerations, operational strategies and the situation of market competition, to meet the demand of the users. The provision of the relevant service, charges, network coverage, the type of technologies adopted and the amount of installed capacities are primarily determined by FNOs based on their commercial considerations and do not require any approval by the CA.
(3) Noting that there was only one network operator in some locations (such as rural areas and some individual buildings), the CA conducted assessment on a number of relevant complaint cases in accordance with the competition provisions of the TO. The CA's conclusion was that, having regard to the full liberalisation of the fixed broadband services market, and that a number of major FNOs were providing fixed broadband services in the market, the fact that other FNOs chose not to provide services in some locations was the result of their commercial decisions, rather than the result of anti-competitive conduct by certain FNO that prevented other FNOs from expanding services to those locations. In regard to service charges, the CA considered that it was not uncommon for FNOs to apply differentiated charges for different customer groups in a highly competitive telecommunications services market. The pricing strategy adopted by the FNO in the cases in question did not constitute anti-competitive conduct.
The CO came into full operation in December 2015. Under the CO, the CA is conferred concurrent jurisdiction with the Competition Commission (Commission) to enforce the CO in respect of the conduct of certain undertakings operating in the telecommunications and broadcasting sectors. Pursuant to the principles set out in the Memorandum of Understanding signed between the CA and the Commission, for cases involving the telecommunications or broadcasting sectors and falling within the concurrent jurisdiction, the CA would ordinarily be the leading authority. As such, if the CA suspects that any FNO engages in anti-competitive conduct, it will conduct investigation pursuant to the CO.
(4) For the past five years, the number of complaints received per annum by the OFCA regarding fixed broadband services, and among which the number of complaints on the problem of coverage by only a single FNO or the lack of choices of fixed broadband network are set out in the table at Annex.
(5) The Government, through the Government Wi-Fi Programme (GovWiFi) provides free public Wi-Fi services at government venues. To ensure cost-effectiveness, GovWiFi mainly provides free Wi-Fi wireless Internet access services at government venues with high patronage for use by the public and visitors. The Government is planning to implement a new "Wi-Fi Connected City" Programme, under which more Wi-Fi service providers will be invited to provide free public Wi-Fi services at more non-governmental venues, including those in remote areas.
(6) With a view to encouraging investment by FNOs in network expansion, the OFCA will continue to introduce facilitating measures in order to speed up the expansion of their network coverage at different locations in Hong Kong, including assisting FNOs in rolling out network infrastructures at public streets, government-owned bridges and tunnels, and explaining to the public about the rights and responsibilities of FNOs in rolling out networks in private land and premises and the benefits to residents. The OFCA would refer enquiries or complaints received from the residents of particular locations to the FNOs concerning unsatisfactory fixed broadband services, and encourage them to consider enhancing their network coverage at the concerned locations to meet the demand of the consumers.
For broadband services in rural and remote areas, we understand that there are currently at least three FNOs actively establishing high speed broadband networks in those areas, with a view to providing higher speed broadband services. Among these FNOs, two are existing FNOs; while the other one is a new FNO who just obtained CA's approval last year to amend its unified carrier licence, such that it is able to use its radio spectrum to provide wireless fixed broadband services in rural and remote areas. The proposed network coverage of this FNO will span across 114 villages in the eastern part of the New Territories, western part of the New Territories, North District and the outlying islands, including some of the rural and remote areas mentioned by individual groups before. It is expected that the quality of the fixed broadband services and the range of choice of FNOs in these areas will be enhanced following the completion of the network expansion or improvement works by the FNOs.
Apart from fixed broadband services, a number of mobile network operators (MNOs) are also providing wireless broadband services in the market in recent years. Consumers at locations within the coverage of the MNOs can make use of the mobile broadband services to get access to the Internet. Residents in rural and remote locations may therefore consider the use of such services as an alternative to the conventional fixed broadband services. With the advancement of technologies, the speed of wireless broadband services provided by MNOs in Hong Kong now reaches as high as 375 Mbps and is comparable with that of the fixed broadband services.
Ends/Wednesday, May 4, 2016
Issued at HKT 15:03
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