32

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Workshop at a Building Management Resource Centre on“Gaining Access to New Telecommunications Services”

��� !"#$%&'()*+,-��./0123456789:;7�� !"#$%&

The In-building System and Support Section assists residents ingaining access to new telecommunications services

33

A

�� !"==OFFICE OF THE TELECOMMUNICATIONS AUTHORITY

Structuring Fair and Smooth Access to Buildings

s of March 2002, there were five wireline FTNS and four wireless FTNS operators

offering local fixed telecommunications network services in Hong Kong.

Recognising that their services are essential to residents, the TA authorises all

nine network operators under section 14(1) of the Telecommunications Ordinance to

have the legal right to access private buildings to lay cables and install equipment in the

“common parts” of these buildings.

In February 2000, OFTA set up the In-building System and Support Section to coordinate

and facilitate access to buildings by network operators. In 2001/02, the Section conducted

more than 300 briefing sessions, presentations and seminars for building management

companies, property developers, property owners and Owners Incorporated. A hotline

has also been set up to provide advice and assistance to property owners and building

management companies.

In order to ensure that in-building telecommunications systems are installed properly

and to minimize the possible disturbance to residents, OFTA issued a Code of Practice in

February 2002 to govern the installation and maintenance of in-building

telecommunications systems and in-building access by telecommunications network

operators. OFTA also conducted sample checks to ensure that operators’ installations are

in compliance with the Code of Practice.

Catering for Consumer Interests

The following activities were carried out in 2001/02 for the benefit of consumers:

26 Apr 2001 Issuing the Code of Practice on the Handling of Customers’ Deposits

and Prepayments of Charges

29 Sept 2001 Announcing on the OFTA web site “Network Coverage of New

Wireline-based FTNS Operators”

1 Oct 2001 Reducing PNETS charge by 13%, from 2.3 cents to 2.0 cents per

minute, and the interconnection charge between the incumbent,

PCCW-HKTC, and mobile phone operators by 6%, from 5.1 cents to

4.8 cents per minute

34

6�� !"#$%& PUTTING THE CONSUMER FIRST

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35

�� !"==OFFICE OF THE TELECOMMUNICATIONS AUTHORITY

12 Oct 2001 Issuing the Code of Practice for the Service Contracts for the Provision

of Public Mobile Radiotelephone Services

14 Jan 2002 Issuing the Consultation Paper on Misleading or Deceptive Conduct

in the Hong Kong Telecommunications Market

8 Feb 2002 Issuing the Code of Practice for the Installation and Maintenance of

In-building Telecommunications Systems and In-building Access by

Telecommunications Network Operators

8 Mar 2002 Announcing that the licence fee payable under the mobile carrier

licence, the public radiocommunications services licence and the

PNETS licence was to be reduced from $30 to $24 per mobile station,

to be effective on 1 May 2002

Offering Freedom of ChoiceThrough Number Portability Arrangements

Using the method of an intelligent network and database, Hong Kong became the first

city in the world to achieve full number portability in fixed networks in December 1996. In

March 1999, mobile number portability (“MNP”) was successfully achieved, removing

the last obstacle towards freedom of choice by consumers.

Three years after the introduction of MNP, more than 4.5 million mobile customers have

already carried their mobile numbers to their preferred mobile network operators.

Customers have benefited not only from the freedom to switch operators without the

inconvenience of changing their mobile numbers, but also from the lower prices and

improved service quality resulting from enhanced market competition. MNP will also be

one of the major service capabilities to be implemented in future 3G mobile services.

At the end of March 2002, six mobile phone operators were operating 11 digital systems

serving 5.78 million customers. The penetration rate, which exceeded 85.5 per cent,

became one of the world’s highest.

36

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37

Sharing the Benefits of Market Expansion – Licence Fee Reduction

Rapid growth in the telecommunications industry has boosted OFTA’s revenue from licence

fees in recent years. Given the satisfactory status of OFTA’s cash flow, OFTA concluded

that, in order that both the industry and the public might reap the fruits of the extremely

competitive and successful mobile market, the licence fees of mobile licences should be

reduced.

The mobile licence fee per mobile station was reduced twice from HK$75 to HK$55 on

1 May 1999 and from HK$55 to HK$30 on 1 May 2000.

In March 2002, the Government announced that the mobile licence fee per mobile station

would be further reduced from HK$30 to HK$24 with effect from 1 May 2002, representing

a reduction of 20 per cent and a cumulative total reduction of 68 per cent.

From 1 May 2002, licence fees payable by mobile operators would be based on the total

number of customers, including both post-paying customers and those using pre-paid

Subscriber Identity Module (SIM) cards. This is to establish a fair mechanism of calculating

the licence fee payable by the mobile operator.

Providing Universal Service for All

On 13 July 2000, the TA issued a Statement to revise the calculation methodology for

Universal Service Contribution (“USC”). The Statement took into account expansion of

services under the licence held by the universal service provider, introduction of the local

access charge and modified delivery fee arrangements, deferral of the tariff increase for

residential lines and the use of telephone lines for Basic Service to provide broadband

services. The revised methodology will be used for calculating the USC until a review of

the USC regulatory framework is completed.

Recognising the need to preserve sensitive commercial information while liberalising the

ETS market, the TA continued to appoint Citibank N.A. as the independent and neutral

intermediary body for the settlement of the USC between the universal service provider,

PCCW-HKTC, and the contributing parties. Under the tripartite agreement signed by the

TA, PCCW-HKTC and Citibank N.A. on 21 March 2001, Citibank N.A. is responsible for

collecting the USC until December 2002.

�� !"==OFFICE OF THE TELECOMMUNICATIONS AUTHORITY

38

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Offering Choices for Residential Telephone Line Users

In 1999, in return for the temporary extension of the moratorium for further licensing of

local wireline-based fixed networks until the end of 2002, the three new local FTNS

operators that entered the market in 1995 submitted Deeds of Undertakings to the

Government to extend their network coverage. They undertook that by the end of 2002,

at least 50 per cent of the residential telephone line users in Hong Kong would have at

least one additional choice of supplier of telephone lines in addition to the universal

service provider (PCCW-HKTC). Their commitments are guaranteed by performance bonds

of $50 million each.

The three operators provide network coverage to residential line users through Type II

interconnection (interconnection with the local loops) supplied by the universal service

provider as well as direct connection of buildings.

At the end of every year until 2002, the three operators are required to submit reports to

OFTA on their progress and compliance with interim milestones.

OFTA received the third progress report at the end of 2001.The interim milestones were

generally met.

Safeguarding Accuracy in Billing and Metering

OFTA has planned a regulatory framework to ensure that metering and billing of public

telecommunications service providers are carried out to the required standard. In May

2000, OFTA published a consultation paper on the subject. This consultation paper was

concluded with a TA Statement in August 2000, which provided a blueprint for the TA’s

plan to implement a quality assurance system for metering and billing functions. OFTA

then began to work out the details of the implementation of the framework with industry

operators and the Consumer Council. The “Billing and Metering Integrity Scheme”,

comprising requirements for quality assurance, accuracy standards, operators’ reporting

and submission of appraisal reports and OFTA’s monitoring procedures etc would be

implemented in 2003.

�� !"==OFFICE OF THE TELECOMMUNICATIONS AUTHORITY

9

40

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41

Addressing Consumer Concerns and Resolving Disputes

The year 2001/02 witnessed OFTA’s increased involvement in handling consumer complaints

against operators and resolving disputes. The number of consumer complaints received

increased drastically from 1,199 in 2000/01 to 1,867 in 2001/02. Such increase was largely

attributable to the increasing number of users and consumers of telecommunications

services, the rollout of new services like the broadband service, keen market competition in

various services like the Internet, mobile telephone and external telecommunications services,

together with consumers’ enhanced awareness of their rights. Besides, the rapid development

of telecommunications technologies and the great variety of services and products have

increased the complexity of the complaints received.

To meet the demand of consumers and to maintain an effective service, we have

strengthened both our front-line and supervisory staff establishments in the Consumer

Affairs Section to handle complaints. Our commitment to providing quality customer service

is reflected also in our creation of a new performance pledge in April 2002 - to issue

interim replies to complainants within 3 working days and to give full replies or progress

reports within 30 working days.

In March 2002, a warning was issued to a broadband service operator following an

investigation in response to numerous complaints against the operator’s customer service

and its automatic extension of service contracts without customer authorisation. OFTA

will continue to monitor the service quality of this operator and all other telecommunications

service providers to ensure that consumers receive good service.

To enhance consumer protection, OFTA has been liaising closely with the Consumer

Council to discuss issues or trade practices that warrant intervention from the regulator of

the industry by way of issuing codes of practice or guidelines for compliance by operators.

Tackling Unsolicited Fax Advertisements

OFTA considers that unsolicited fax advertisements (more commonly known as “junk

fax”) constitute a legitimate concern of consumers. Since July 1999, administrative

measures have been adopted to tackle the issue. Fax-line users who do not wish to

receive “junk fax” may register with their operators to put their fax numbers on their

respective “not-to-call” lists, which are kept by individual operators and published on the

�� !"==OFFICE OF THE TELECOMMUNICATIONS AUTHORITY

42

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43

OFTA web site. Receivers of junk faxes may file complaints with their operators. Legitimate

cases of complaint may lead to sanctions against the sender such as suspension and

termination of their fax lines.

Senders of fax advertisements are also required to observe a set of guidelines issued by

OFTA, defining acceptable arrangements for sending advertisements through fax. The

effectiveness of these measures is being closely monitored to evaluate the need for more

stringent measures, including legislative means.

In February 2001, OFTA held 3 gatherings with some fax senders to seek their co-operation

in complying with the guidelines, which are voluntary. At these gatherings, OFTA also

recommended to the fax senders that they use free application programmes developed

in-house by OFTA to promote and facilitate the use of the “not-to-call” list.

OFTA commissioned an independent opinion survey on public attitudes towards junk fax

in July / August 2001 as part of its efforts to ascertain objectively whether there is a strong

case for stepping up measures against the behaviour. An overall policy review is ongoing.

Junk E-mail

Junk e-mail or “spamming” (or bulk unsolicited e-mail messages or news articles sent

via electronic mail without the recipients’ prior request or consent) is another issue of

public concern. At present there is no legislation prohibiting the sending of “spams”,

while the Government encourages the Internet industry to exercise self-regulation in

tackling spamming activities. In February 2000, the Hong Kong Internet Service Providers

Association issued an industry code of practice which stipulates that sanctions, such as

suspension of services, should be imposed on spammers and that preventive measures

should be taken by the Internet service providers to reduce the possibility of spamming.

A review on the effectiveness of these initiatives will soon be carried out.

�� !"==OFFICE OF THE TELECOMMUNICATIONS AUTHORITY