(For Immediate Release) April 13, 1998

HKISPA proposes reforms to foster broadband competition

The Hong Kong Internet Service Providers Association today unveiled a position paper to advocate for reforms in the development of the broadband and Internet markets in Hong Kong.

The position paper, entitled, “An Environment for Competitive Broadband and Internet Development in Hong Kong,” lists out 10 recommendations (Appendix 1) for the SAR Government and the Telecommunications Authority (TA).

In particular the Association urges the Government to immediately investigate alleged predatory pricing in the broadband market by the local fixed network dominator, and ensure equal treatment for all Internet service providers (ISPs) interested in providing broadband services over both the fixed telecommunications and cable networks.

In order to create a fair competitive environment for ISPs, the Association also urges the Government to enable ISPs to negotiate with fixed networks on a carrier-to-carrier basis, similar to the situation in other advanced telecommunications regimes like the U.S. and the U.K.

In order for Hong Kong to realize its goal to become the Asia Pacific Internet center, a competitive environment for broadband services is an absolute necessity. That is why we propose the Government to conduct an urgent review of its broadband related policies,” comments Mr Charles Mok, Chairman of the Association.

The broadband Internet market is dominated 100% by one single service provider affiliated with the dominant local fixed network,” adds Mr Lee Kheng-Joo, Vice Chairman of the Association. “The Government must ensure all ISPs have equal means to offer broadband services at reasonable rates.”

Furthermore, the Association expresses concerns over recent decisions by the TA over alleged anti-competitive incidents that are inconsistent with previous decisions involving possible cross-subsidies between affiliates of the dominant fixed network, and also recent major circuit failure of the fixed network for ISPs.

Notes to editors:

HKISPA is the only independent and non-profit Internet Service Providers Association in Hong Kong. Its primary objective is to represent and develop the ISP industry in Hong Kong. HKISPA has a membership over 50 firms, including local and international Internet-related companies.

For enquires: Ms Ayesha Ma, 21103966, [email protected]

Appendix 1 Recommendations of HKISPA on the Development of a Competitive Broadband Internet Environment in Hong Kong

The Association urges that the Telecommunications Authority immediately investigates into the anti-competitive effects of the predatory pricing practices of the broadband Internet service by HKT (to its ISP clients) and HKTIMS (to endusers) on both the broadband and narrowband markets. [Recommendation 1]

The Association urges the Telecommunications Authority to reconsider its policy toward type 2 broadband interconnection to encourage more competition in the market, and consult and consider the interest of the user community, including ISPs, in its decision-making process. [Recommendation 2]

The Association urges the Government to consider the granting of the status of “exchange carriers” to ISPs and the legislative provisions to enable ISPs to negotiate with carriers on a “carrier-to-carrier” basis over interconnection issues. [Recommendation 3]

The Association urges the Telecommunications Authority to consider legislative provisions requiring the fixed network providers to adopt “line sharing” in order to assure fairer competition between ISPs trying to provide broadband services and the phone company-affiliated ISPs. [Recommendation 4]

The Association urges the Telecommunications Authority to consider more stringent regulatory conditions over the separation of the dominator fixed network and its affiliate advanced service provider, in particular to allow more transparency and public scrutiny. [Recommendation 5]

The Association urges the Government to clarify its legislative direction as well as its timing concerning the sharing of the cable network, and also to enforce the sharing of advance information and the availability of testing of cable modem services to all interested ISPs. [Recommendation 6]

The Association urges the Government to conduct an urgent consultative exercise into the broadband regulatory regime. [Recommendation 7]

The Association urges the Government to announce the full liberalization of both the local fixed network and the facilities-based external telecommunications services market as soon as possible. [Recommendation 8]

The Association urges the Telecommunications Authority to reconsider the anti-competitive complaints over HKTIMS’s dedicated leased line offer, and make a ruling that would be truly pro-competition. [Recommendation 9]

The Association urges the Telecommunications Authority to carry out a full investigation into the recent circuit failure causing major outage of a large number of ISPs, and consider if the fixed network provider violated any service guarantees pursuant to its fixed network license. [Recommendation 10]