Competition law urged in wake of breach of licence
The $50,000 fine imposed on Hongkong Telecom last week for breaches of its licence underlines the need for speedy implementation of a competition law covering the sector, according to a specialist telecommunications lawyer.
The Office of the Telecommunications Authority (Ofta) fined Hongkong Telecom for charging lower fees than allowed to corporate customers.
The fact that the company seemingly ignored an earlier directive from Ofta and carried on offering unauthorised discounts showed the need for strong proactive statutory regulation, Bird & Bird partner Richard Fawcett said.
Currently, Hongkong Telecom is governed by competition safeguards built into its licence conditions.
The Government's Information Technology and Broadcasting Bureau is working on upgrading these licence conditions and folding them into a statutory framework within the Telecommunication Ordinance.
Unusually among developed markets, Hong Kong has never had competition laws before in any sector, which may slow down the process.
'The question is, in the absence of a general competition law framework and associated precedent decisions, how will the new law be interpreted and how will it develop?' Mr Fawcett said.
As part of the process of framing these laws, the Government has proposed much larger fines and the ability to speed up the process of investigating potential abuses.
The Government hopes to introduce the amendments during the current legislative session but there are fears any law may not be enacted until next year.
Hongkong Telecom's second punishment (it was fined $20,000 last year) for licence breaches appears to show the increasing need for legislation.
'In the early stages of liberalisation, the market needs strong and proactive regulation,' Mr Fawcett said.
