A controversy is brewing over the proposed establishment of a second Internet exchange which plans to give away free local Internet connectivity to SAR companies.
Local Internet service providers (ISPs) are opposing the establishment of the Hong Kong Commercial Internet Exchange (HKCIX) because they feel it cuts unfairly into their business.
Located on the campus of the Chinese University of Hong Kong, the HKCIX would provide a centre where local companies could plug in their data lines for free, house their network hardware and connect to ISPs offering international bandwidth for a fee.
An existing Hong Kong Internet Exchange (HKIX) is also located on the campus. It provides free interconnection services only for the SAR's 100-odd holders of public non-exclusive telecommunication services licences from the Office of Telecommunications Authority. The licence is required for companies to offer Internet services.
Companies cannot hook up directly to HKIX unless they own a licence. Instead, they must go to a local ISP, which asks Hongkong Telephone to set up a physical data line between the company customer and the ISP. The cost of the physical line varies between $2,400 per month for a 64 kbps line and $7,000 for a T1 (1.5 mbps).
On top of those charges, the ISP then charges the company a monthly fee, which varies, depending on the maximum bandwidth, or speed, of the line.