For the tens of thousands of Internet users in Hong Kong, June 1, 1996 was a day of victory. That was the day the long-controversial PNETS surcharge on Internet usage was cut by more than half. Internet users, who formerly paid $5.40 per hour to Hongkong Telecom to write e-mail or surf the World-Wide Web, now enjoy a rate of $2.52 per hour. These charges are in addition to rates charged by an individual Internet service provider (ISP). The rate change was effective immediately, although users will not immediately notice it on their bill. Hongkong Telecom says it will be two to three months before the billing and metering system is ready. Users will be compensated when the changes to the billing system are finally complete. But for a day that should have been full of rejoicing, reaction was muted. Cutting PNETS was very 'welcome', Lee Wai-kit, chairman of HKNet, a local ISP, said. 'We hope that they will lower PNETS even more in the future.' The apparent indifference was particularly strange considering that last March, a number of ISP heads were being thrown into jail for defiantly refusing to pay PNETS charges. More recently, ISPs complained PNETS was guilty of monopolistic practice because Hongkong Telecom - with its Netvigator ISP, was now a telephone service provider and a direct competitor for dial-up users and leased-line accounts. This, according to one ISP marketing executive, was grossly anti-competitive. 'PNETS is just going from one pocket to another,' she said, charging that Hongkong Telecom can lose money in one division - Hongkong Telecom IMS - because it is collected by another wholly owned subsidiary - Hongkong Telephone. Hongkong Telecom has denied this charge. Continued dissatisfaction with PNETS and other issues have led a number of local ISPs - Star Internet, ABCNet and AsiaNet - to form a coalition to address their particular grievances. And some of the 75 existing Internet service providers licensed in Hong Kong are showing their dissatisfaction by switching their local dial-up telephone providers to New T&T. The Office of the Telecommunications Authority's (Ofta) low profile on the PNETS cut also kept things quiet. Most Internet users probably were not even aware at the time that the PNETS rate had been lowered. There was no public announcement except for a small posting on the Ofta home page ( http://www . ofta.gov.hk) dated June 1. Ofta is also vowing to review the PNETS charges every year. A separate review will be conducted within the next 12 months to determine the most appropriate telephone pricing structure, which may make PNETS obsolete. And some Internet users were suggesting pressuring Hongkong Telecom for monetary compensation for previous PNETS charges. Audacious and unsupportable was Ofta director, Alex Arena's resposne. 'There's no question that the old tariff was legal,' he said, adding that there were no grounds for compensation. But with the overall telephone pricing structure under review, PNETS could be relegated to a minor footnote in the history of telecommunications regulation in Hong Kong. Of four pricing schemes proposed for the local market, the most noticed - usage-based prices based on time - would make PNETS redundant. Everyone would have to pay for using their local telephone service, no matter whether it was a voice or data call. Yet, Ofta has said this scheme has been the least popular, as most residential users say they prefer flat-rate charges. Nevertheless, observers such as HKNet's Mr Lee acknowledge that putting too much pressure on Ofta and Telecom could backfire, leading to the introduction of a time-based pricing scheme for all types of phone calls.