30 March, 1998
HKISPA Position on ISR Delivery Fee Arrangement
The Hong Kong Internet Service Providers Association (HKISPA) welcomes the Government's recent public statement that no limit would be imposed on the number of International Simple Resale (ISR) license. This will allow international valued-added service providers, including ISPs, to apply for such a license to operate telephony services including, Internet telephony. Furthermore, HKISPA suggests that a cost based delivery fee should be charged to ISR licensees.
The HKISPA is concerned about the Government's proposal in its recent consultation on the "Review of the Delivery Fee Arrangement" in Hong Kong, that a "non-cost based interconnection charge" will be approved by the Telecommunications Authority (TA) for the dominant operators. Such a non-cost based charging scheme may lead to unfair competition, and a cartel in the sense all ISR operators will have to go through the FTNS operators to deliver their services to the end-users.
"We urge the government to charge cost based interconnection fees. After all, ISR operators are direct competitors with the FTNS. If the fee is non-cost based, the level playing field cannot be attained" Mr Daniel Ng, Chairman of HKISPA said.
A non-cost based - hence higher - local access charge is a continuation of the current system and will add to the level of the IDD charges, eradicating the benefits incurred by going to ISR. Instead of promoting facilities-based competition, it will only lead to a potential facilities-based cartel
In order to ensure the $6.7 billion compensation and other incentives to Hongkong Telecom for the termination of its external exclusivity to be worth the taxpayers' money for Hong Kong's citizens, true and full competition must be encouraged.