HKISPA Demands Broadband Reforms, Slams Hongkong Telecom

In a position paper, the Hong Kong Internet Service Provider’s Association (HKISPA) advocated more competitive broadband and Internet markets in Hong Kong and criticized Hongkong Telecom (HKT), the dominant fixed network provider and largest ISP, for monopolistic tactics.

However, the HKISPA stopped short of criticizing the Hong Kong Government for what the harshest critics say is inaction.

The paper, labeled “An Environment for Competitive Broadband and Internet Development,” lists recommended actions for the government and the Office of the Telecommunication Authority (OFTA).

“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,” said Charles Mok, HKISPA chairman and general manager of HKNET Co. Ltd. “That is why we propose the Government to conduct an urgent review of its broadband related policies.”

The association urged the government to investigate HKT’s alleged predatory pricing in the broadband market and ensure that all ISPs had equal access to broadband services whether on fixed telecom or cable networks.

HKT has set its broadband price for ISPs at HK$500 (US$65) per month per customer, according to Mok, while it charges its own broadband customers only HK$298 (US$39) per month.

In the paper, the HKISPA also called for “full liberalization of both the local fixed network and the facilities-based external telecommunications services market” and recommended that, like in the US and the UK, the SAR government enable all ISPs to negotiate with fixed networks on a carrier-to-carrier basis.

The association asked OFTA to investigate a recent circuit failure that caused a large number of ISPs to be down for several hours and whether HKT failed to meet service guarantees as the fixed network provider.

However, Mok did state the HKISPA was very positive about the good dialogue it continues to have with OFTA and the government. He pointed out that the PNET charges (tariffs by HKT) were reduced in the last few years by the government.

The closest that the HKISPA came to criticizing the government was the concern expressed in the paper about recent inconsistencies in OFTA’s policy.

Mok explained that the Telecommunications Authority (TA), the head of OFTA, had come down on HKT last fall for predatory pricing and cross bundling with regard to the dial-up market. The TA later reaffirmed this policy during his December 1998 statement to the press regarding his approval of HKT’s buyout of the next largest rival, Hong Kong Star Internet.

In this statement, the TA assured the press that it would be watching HKT and that predatory pricing, cross bundling and cross subsidies would not be permitted.

Nonetheless, as Mok indicated, the TA recently declined to take action against similar HKT practices in the leased-line market.

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