'Free riders' drama plays out on the box

PUBLISHED : Tuesday, 19 July, 2005, 12:00am
UPDATED : Tuesday, 19 July, 2005, 12:00am

When Ricky Wong Wai-kay, the chairman of the Hong Kong Broadband Network (HKBN), invited reporters to his home on The Peak a year ago to preview his internet telephony services, he sparked a fierce debate that rages to this day.

The issue: whether telecoms operators have the right to offer services over the broadband networks of others.

PCCW, which has a legacy fixed-line business to protect, complained furiously about HKBN using the company's Netvigator network for voice services, saying this 'free ride' would diminish investment incentives.

The dominant operator may soon find itself once again frustrated as rivals line up to offer pay-TV services that could be accessed via Netvigator, competing with its own NOW Broadband television offering.

One such service is Akimbo, which offers users a US$200 set-top box and a collection of channels such as Adult Swim, National Geographic and Cartoon Network.

But PCCW could face competition closer to home from the likes of HKBN.

When Mr Wong demonstrated internet telephony a year ago, he also showed reporters how he was able to watch his own pay-TV services using Netvigator. He was using PCCW because HKBN's broadband network did not reach The Peak.

HKBN has not yet decided whether to offer pay-television services to Netvigator customers, but last week Mr Wong said he might consider doing so if PCCW could offer download speeds of at least 10 megabits per second.

Mr Wong's interview for Ben Kwok's 14 Minutes with Lai See programme will be available on www.scmp.com later today.

PCCW plans to ramp up its Netvigator service to 8Mbps later this year and 25Mbps eventually as it prepares to further enhance its NOW offering with high-definition and interactive content. NOW has so far attracted more than 400,000 subscribers.

The upgrades could attract 'free riders', and a repeat of the internet telephony debate might be in the offing.

On one side will be companies like PCCW and Hutchison Global Communications, which is carrying the recently launched SuperSun pay-TV services from TVB's Galaxy Satellite Broadcasting; on the other will be firms like Akimbo, which is based in the United States, and HKBN, should it decide to take pay-TV to a wider audience. While Akimbo is unlikely to get PCCW's goat, Mr Wong's entry probably would.

How this plays out is yet to be seen, but consumers should hope it follows the path of the internet telephony debate.

The telecoms regulator ruled that consumers have already paid for their Netvigator connection.

As such, they do not have to pay again when subscribing to HKBN's voice services over PCCW's network.