Ofta starts interconnection tariff review

PUBLISHED : Saturday, 05 December, 2009, 12:00am
UPDATED : Saturday, 05 December, 2009, 12:00am

The Office of the Telecommunications Authority (Ofta) yesterday began a public consultation that could pave the way for PCCW to adjust certain fees charged to other operators for connecting to its fixed-line network.

The interconnection tariffs PCCW can charge are governed by Special Condition 3.4, contained in its fixed-carrier licence.

As the long dominant fixed-line telecommunications services provider, PCCW is the only operator with that condition.

The rule provides a rigid pre-approval scheme for any proposed adjustment of interconnection charges. These include connections between value-added services such as dial-up internet access, and the public switched telephone network operated by PCCW, as well as business-focused services such as broadband copper local loop and exchange co-location services, internet protocol virtual private network services, and residential cell relay services.

'We are pleased that Ofta is reviewing the appropriateness of this licence condition left over from 1995, which is unique to PCCW and no longer necessary in a competitive market,' a PCCW spokeswoman said.

PCCW made a request to the regulator on July 16 to review the special condition and applied for it to be removed from its licence.

An Ofta spokesman said the regulator considered it appropriate to conduct a review because of the impending expiry of PCCW's fixed-carrier licence in June next year. It also noted significant changes implemented recently in the domestic telecommunications sector.

The deregulation of fixed-mobile interconnection charges, for example, took effect in April.

This brought an end to a scheme stipulating that mobile-telephone service operators pay as much as HK$600 million annually in interconnection charges to PCCW for traffic to and from its network. That set-up did not require PCCW to pay the mobile-telephone service providers.

Upheld by the Court of Appeals in April, the new regime calls for a two-way payment arranged by commercial agreements for telephony traffic between mobile-telephone service providers and fixed-line network operators.

Ofta has identified two options for the PCCW special condition, the regulator's spokesman said. One is to remove the restriction as the operator requested. The other is to keep the condition but remove individual tariff items on a case-by-case basis.

Stephen Chau Kam-kun, the chief technology officer at mobile network operator SmarTone-Vodafone, said: 'Our preliminary opinion is that this will have a major impact on other operators because PCCW remains the dominant fixed-line network operator and handles plenty of the market's traffic.'

Spokesmen for Hutchison Telecom Hong Kong and Wharf T&T both said they were keen to study Ofta's consultation paper and would submit their views. Ofta expects the public's comments to be submitted on or before February 4 next year.