Issues must be resolved before convergence crosses the line

Some exciting changes are taking place in the telecommunications industry. Chief among them is the concept of 'fixed-mobile convergence', the idea that one day soon users will be able to seamlessly roam between fixed and mobile networks. Already, handset makers such as Motorola and chip suppliers such as Royal Philips Electronics are working on gear that will allow mobile-phone users to effortlessly switch between Wi-fi and traditional mobile networks. A key step towards the fixed-mobile convergence trend is broadband wireless access (BWA) technology, such as the much-hyped WiMAX - Wi-fi's big brother - but also others available today from companies such as IPWireless, which supplies a cousin of 3G technology to PCCW in Britain. Hong Kong's regulator, the Office of the Telecommunications Authority (Ofta), is preparing for this new era with promises to begin a consultation on the introduction of a unified licensing regime by year-end. With unified licensing, the final barriers between the city's five fixed-line and six mobile operators will be torn down. Ofta has also vowed to review spectrum policy, which could see the introduction of spectrum trading or permit licence holders to use spectrum for purposes other than originally intended. A 3G licence holder might instead choose to deploy WiMAX gear for its allotted frequency. But these important policy reviews will come later as Ofta is now preoccupied with the issuance of BWA licences. Industry players welcome the chance to gain access to BWA spectrum. However, they argue Ofta should get its regulatory ducks in a row: Wouldn't it be better to resolve the issues surrounding unified licensing and spectrum liberalisation before handing out BWA permits? Ofta has proposed allocating BWA spectrum solely to fixed-line licence holders (mobile operators can still apply, but they need to get a fixed-line permit first) and restricting mobile applications, at least initially. It says full mobility for BWA is not yet ready, and for WiMAX this is true. But other technologies, such as equipment from IPWireless, already offer full mobility. Ofta's initial stance has riled the mobile operators, who see it as unfairly benefiting the fixed-line companies ahead of the review on unified licensing. It is unusual that the regulator is requiring bidders to hold a fixed licence as a condition for participating. When 3G licences were put out for bid, the auction was not limited to 2G operators. Mobile operators also believe Ofta has narrowly defined BWA as a fixed-line technology, when it is actually at the crossroads of fixed and mobile convergence. As 3G operator CSL put it: 'BWA is as much a mobile technology as it is a fixed technology and should be treated as such ... From CSL's perspective, a unified licensing scheme is both necessary and overdue.' It said Ofta needed to handle these policy issues in the correct order. To do otherwise raises the risk that policy decisions made on BWA today will need to be unwound when unified licensing is tackled later. The regulator is not unaware of these concerns. In these pages on March 15, Ofta director-general Au Man-ho wrote that delaying decisions on BWA was undesirable because consumers could benefit from the services today. In particular, 'nomadic' BWA services could fill the void left by 3G. Mr Au also said regulation needed to keep evolving as markets and technologies developed. But as PCCW points out, no one is asking for regulation to stop evolving. What they desire is for the issues to be tackled in a comprehensive manner. In any case, the mobile operators do not wish to see licensing on BWA delayed. They want policy-making - encompassing BWA, unified licensing and spectrum liberalisation - greatly accelerated. Sunday Communications put the challenge thus: 'Sunday urges the telecommunications authority to expedite the spectrum policy review and fixed-mobile convergence policy formulation.' CSL wanted Ofta to explain why the reviews could not be started today. PCCW and SmarTone Telecommunications said BWA services should not be introduced until the issues of spectrum policy and unified licensing were handled. What is clear is Ofta will have a hard time making a decision on BWA without affecting the course of debate later. When technologies converge, so do the regulatory implications. As CSL said: 'To merely focus on BWA in isolation will fail to recognise that convergence is a reality of the telecommunications environment.'