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Operator seeking $6m in legal costs after interpreting the latest ruling in its favour

PCCW claims it won the latest legal battle with the Office of the Telecommunications Authority (Ofta) over the government's broadband interconnection policy and expects the  watchdog to pay its court costs.

Following last week's ruling, Ofta declared itself the victor after the court upheld its right to mandate interconnections.

However,  the fixed-line operator pointed to language in the ruling which described as 'unlawful' Ofta's May 2002 order forcing PCCW to lease its network to rival Wharf.

PCCW also accused Ofta of mischaracterising the result to lead policymakers and the Executive Council astray.

'I think it's clear if one reads the judgment that PCCW won,' the operator's director of regulatory affairs Stuart Chiron said.

Senior litigation consultant Helen Walker said PCCW would ask for about $6 million in legal costs.

'When we get costs it's obvious that we won,' she said.

PCCW wants Ofta to end its mandatory interconnection policy for broadband and narrowband, known as Type II, arguing there is enough facilities-based competition in the market.

In the dispute over the May 2002 order, the fixed-lined operator attacked on two fronts.

The first was to ask the court whether Ofta had the right to force broadband interconnections.

The second was to obtain a ruling on the legality of the May 2002 order.

A victory on either count would have handed the case to PCCW, Mr Chiron said.

While upholding Ofta's right to force interconnections, Mr Justice Michael Hartmann said the agency's application of that right in May 2002 was 'arbitrary', 'irrational' and 'unlawful' because it did not detail the terms and conditions.

But it is clear PCCW would have liked to have won both parts of the case. A total victory would have undermined Ofta's interconnection policy, which the agency is in the process of rolling back.

Ofta favours a go-slow approach, while PCCW wants an immediate end to the policy with reasonable efforts  to protect existing customers.

Mr Chiron said the fixed-line operator was considering an appeal of the part of the decision favouring Ofta.

In the meantime, the case moves to the remedy stage. The judge had failed to state a remedy, noting this would be difficult as PCCW had complied with Ofta's order for two years.

Ms Walker said PCCW would ask the court to quash the May 2002 order or declare it unlawful.

Another issue to be resolved is the 1,000 Wharf customers connected to PCCW's network.

Ms Walker said they would continue to be serviced by PCCW, but under what terms remains to be discussed.  PCCW preferred a commercial settlement, although in theory Ofta could issue a new interconnection order.



PCCW claims victory in Ofta battle