Governments generally give monopolies a hard time rather than a leg up. Hongkong Telecommunications appears the exception to the rule.
Allowing it to jump-start competitors with Hong Kong's first video-on-demand (VOD) service affords a huge advantage.
The local leviathan will inevitably dominate the video highway with its technical expertise and marketing clout. Now, it has a turbo-charged head start. With other licence bidders still bickering, the second operator will struggle to catch up.
Faced with an embarrassing delay in launching VOD, the Government opted for a fudge. Having developed the project, Hongkong Telecom was always going to get a licence. It did not expect a free run at the market.
How to regulate VOD was fumbled from the outset. Initially, Hongkong Telecom was to be subject to programming content oversight. Later, competition issues ruled that licences should be awarded.
After bitter opposition from Wharf Cable, the terms were finally set in August. Potential bidders balked at the line rental cost from Hongkong Telecom. At $500 per subscriber, per month, the likes of New World Telephone and Hutchison Telecom did not even bother.
