Ofta targets IDD fee cheats

PUBLISHED : Saturday, 12 June, 2004, 12:00am
UPDATED : Saturday, 12 June, 2004, 12:00am

Watchdog considers bolstering the law to deter providers of illegal call services

The telecommunications watchdog is considering tougher penalties on providers of illegal international direct dialling (IDD) services that circumvent local access charges - a fee that generates about $500 million a year for fixed-line operators.

Office of the Telecommunications Authority (Ofta) assistant director Ha Yung-kuen said the number of illegal IDD providers had increased significantly this year, but the complex prosecution procedures and low level of fines made it difficult to stop the activity.

In the first four months of this year, Ofta raided and terminated 2,833 lines offering such services, compared with 2,268 lines last year.

Unlicensed persons providing illegal IDD services are liable to a maximum fine of $100,000 and five years' jail.

Last year, Ofta successfully prosecuted just four cases, with fines imposed by courts totalling $20,000.

Ofta is reviewing the issue and is in talks with the Justice Department on whether the government should impose heavier fines on people who break the law.

However, Mr Ha said it would be more effective if operators worked with Ofta in using administrative measures to block calls from illegal IDD operators rather than going through the courts.

Only licensed external telecommunications service providers are allowed to provide IDD services. They must pay 12.1 cents per minute for a local access charge and 0.6 cent per minute for a universal services charge to local fixed-line operators for connecting international calls. These charges make up 50 per cent of their costs to popular destinations such as Britain, the United States and Australia.

With suitable equipment, unlicensed IDD operators disguise international calls as local calls by connecting them to leased lines, routing the traffic via the internet, wireless networks or even self-laid cables linked to local networks.

This helps illegal IDD providers save the 12.7 cents per minute in call deliveries.

Society of Hong Kong External Telecommunications Service Providers chairman Kam Poon said it would be easier to deter illegal IDD providers if local fixed-line operators lowered the 'over-priced' local access charge.

'People are tempted to circumvent the local access charge because they can save a huge portion of their costs. If the fixed-line carriers lowered the charge, it would make it commercially unviable for them to do so,' Mr Kam said.