The Commerce, Industry and Technology Bureau (CITB) has launched a three-month consultation on whether Hong Kong should continue its interconnection policy for local telecommunications operators. CITB is asking the industry about different options governing interconnections, and is also seeking views on charges following the opening up of the telecom market seven years ago. 'It is very timely for the government to conduct an overall policy review on Type 2 interconnection,' CITB said. The review will examine whether Type 2 interconnections - customer links that must be provided by established carriers to non-network operators - remain relevant and necessary to enable effective competition and promote investment in the local market. Former telephone monopoly PCCW provides the most Type 2 interconnections to rivals such as Wharf T&T and New World Telecommunications. Other competitors such as Hutchison Global Communications and City Telecom have built their own networks. Seven years after deregulation, PCCW's four main fixed-line rivals have snapped up 704,730 lines or 18.3 per cent of the market, according to CITB figures. As of the end of last year PCCW had 3.13 million lines out of a total of 3.51 million. In the local data market, PCCW provided 559,422 broadband lines, or 55.3 per cent of the total. Its competitors in this segment, which include i-Cable Communications, have 452,342 data lines. With rivals undercutting each other's prices for fixed-line services, PCCW has suffered from an accelerated line loss over the past two years. While PCCW is undoubtedly hoping for restrictions on the forced sale of interconnections to its rivals, CITB would ultimately have to balance the industry preference against the interests of consumers. PCCW declined to comment on the issue. Wharf T&T vice-president Tony Cheung Tung-lan said: 'We really hope that [CITB] will be open-minded and not to be threatened by pressure from powerful operators.' Mr Cheung said the existing interconnection policy ensured fair competition among operators as well as low-priced options for consumers. But City Telecom chairman Ricky Wong Wai-kay disagreed. He said the Office of the Telecommunications Authority had been misled by competitors who claimed that they could not survive without interconnections. In City Telecom's case, Mr Wong said its bloc wiring technique had enabled it to build a network that already covered 60 per cent of Hong Kong's population without the need for interconnection. Michael Reede, a telecom expert with Paul, Weiss, Rifkind, Wharton & Garrison, said: 'There are no packaged solutions in an area as complex as telecoms and competition regulation. 'The issue is always how the long term interests of consumers are best served. Policy must always be focused on consumer welfare, not competitor welfare.'
