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SCMP Reporter

Wharf Cable has the infrastructure to severely threaten telecommunications companies and Internet service providers (ISPs) in the realm of Internet access.

  In the United States, deregulation of the telecommunications industry in February has sparked fierce competition in local area access to the Internet.

  Time Warner and TCI, the two largest cable companies in the US, both introduced commercial cable-modem services last month. Pricing promises to be competitive with ISDN (integrated services digital network).

  However, cable potentially offers a download speed of 10 megabits per second - more than 300 times faster than ISDN.

  Downloads that once took minutes would take microseconds.

  Wharf Cable and most cable companies in the Asia-Pacific share these capabilities but do not have the freedom of their US counterparts. Under its current licence, Wharf Cable cannot provide Internet access.

  According to the Health & Welfare/Broadcasting, Culture and Sport agency, Wharf Cable is only allowed to provide 'subscription TV service and those [services] related to broadcasting', which do not include the Internet.

  K. S. Wong, assistant director of operations at the Office for Telecommunications Authority (Ofta), said technically Wharf Cable could lease its infrastructure to a telecoms company or ISP after licensing.

  He said Hongkong Telecom, which was not allowed to own more than 15 per cent of the territory's first cable company to avoid a concentration of ownership, could legally lease such an infrastructure.

  Wharf has the only cable infrastructure in the territory as the Government will not issue a second cable licence until it reviews the competitive environment in 1998.

  Norris Hickerson, general manager of COL, an out-sourcing and systems integrator specialist, said Wharf Cable had been looking into Internet access possibilities with sister company New T & T for the past year.

  According to a Wharf Cable spokesman, the present technology is 'fraught with difficulties'.

  These include the problem of two-way communications channels. Cable was built on the premise of traffic flow in one direction - video to home. The Internet by nature is interactive, requiring two-way capabilities.

  Cable wires use amplifiers to maintain strong signals downstream. Upstream is another matter, with 'noise' from incoming information and even interference from two-way radios creating poor transfer channels.

  Convergence Systems Inc (CSI), COL's partner in the cable Internet access arena, was founded two years ago to tap the corporate market.

  The consultancy has been involved in major initiatives in the US, with firms such as TCI and Time Warner.

  CSI co-founder Frank Ayre said: 'It was clear to me five or six years ago when I was working in telecommunications that the phone companies are fighting a losing battle for bandwidth.

  'Most cable companies are going to convert to two-way transmission in the next two years. If they don't, they'll be gone in the next 10.'    CSI has trials under way in the Philippines, Taiwan, South Korea and Singapore and is planning to canvas the rest of the Asia-Pacific soon.

   Mr Ayre said one of the main problems in Hong Kong was licensing. 'Wharf Cable has to negotiate with every building owner individually, which is stupid,' he said.

  Mr Hickerson said Wharf nonetheless had a significant number of hook-ups and close to 300,000 subscribers - more than enough to make Internet access profitable.

  He said even with the technical difficulties of two-way traffic, Wharf still had an advantage over US counterparts.

   'Wharf's network is being built as we speak,' he said. 'They will have less problems with conversion because the view taken in building these services was that [Internet access] would be something it would want to do in the future.'   Mr Hickerson said the territory would not see the same type of competition as in the US, but saw potential for new partnerships.

  'Hong Kong is different because for the first time there is competition in the telecommunications market,' he said. 'The new applications for cable to combine with telephony make it a ready-made conglomerate.' 



Cable carries Internet power for Wharf