'The [Telecommunications] Authority will continue to take all necessary actions to enforce rigorously the provisions in the Telecommunications Ordinance safeguarding competition in the market.' Government press release AND IT WAS not only the TA making righteous noises about how no one should take it for granted in the latest Li family shake-up of PCCW. The Broadcasting Authority (BA) and the Securities and Futures Commission (SFC) are in on it, too. Behind the scenes, however, another story is unfolding. It is called fixed-mobile convergence and, if it goes ahead as envisioned, there will be much less to clamour about. Our dominant fixed line operator, already a much shrunken company, stands to shrink further still. The threat is real enough to have induced PCCW not to submit a response to the TA's latest consultation paper on the subject but instead, and with one day to go before the consultation period closed, make an application to the courts for leave to apply for a judicial review on the grounds that the TA 'has improperly and unlawfully predetermined the decision ...' In my view this is purely a delaying tactic and I can assure you that my view is shared by much of the industry. PCCW is fighting desperately to stave off this latest reform. It is actually a quite simple reform. At the moment, when you make a call on a fixed line phone to a fixed line phone on a network run by a different operator the rule is that the calling party pays. The rule for mobile phones is slightly different. When you make a call on a mobile phone to a mobile phone on a different network, each network operator settles its own cost and bills its customer according to its own tariff schedule. The two systems are different but both are still equitable to the network operator on either side. It is not quite so, however, for calls between mobiles and fixed line phones. Call a fixed line from a mobile and the mobile network operator pays the cost. Call a mobile from a fixed line and again the mobile network operator pays. For fixed line operators it is a heads I win, tails you lose game. The anomaly arose because mobiles were originally considered only an adjunct to fixed line phones. The chart will show you that this is so no longer and the TA now wants to end the anomaly. It proposes that fixed and mobile operators be given some time to work out a new arrangement - but it must be an equitable one to both sides. As the dominant fixed line operator in Hong Kong, PCCW obviously stands to lose from the change and doesn't like it. Its subscribers will have to bear costs that they did not bear before and mobile phone operators stand to increase their market share further. This PCCW market share will be under even greater threat if the TA considers the next step in fixed-mobile convergence - operator number portability. This envisages that you will be able to exchange the fixed line telephone set in your home for a wireless set but keep the telephone number you had for the fixed line. The TA has shied away from considering this reform yet but if the first reform goes through, the pressure will be on to adopt the second. Mobile operators insist that a wireless set will operate just as well as a fixed line set, even for broadband applications and you won't even notice. If that happens, you can bid adieu to the word 'dominant' in describing PCCW. Portability would be a very big threat to its business and you can now understand why it should want to scream in protest. Every year that it can stall even the first reform, leave alone the second, could mean a difference of hundreds of millions of dollars in revenue. Wouldn't you try to stall, too? But that is not the biggest question I have here. My question is rather to that government threesome of the TA, the BA and the SFC, who are clamouring so loudly now for their views on the latest PCCW shake-up to be taken into account. These changes could result in greater control of the company by the Li family and its associates and affiliates, including politically connected entities on the mainland. If these three approve it, will they also clamour as loudly for the Hong Kong public's interest if fixed-mobile convergence is formally introduced and PCCW faces another downward lurch in its revenues and market share? Let's hear that pledge from them.