PCCW Wants Out Of Inter-Connection Responsibility

by Mary Swire, Tax-News.com, Hong Kong

25 August 2003

Hong Kong's PCCW, which acquired monopoly fixed-line operator Hong Kong Telephone from Cable and Wireless four years ago, is asking the SAR's Office of the Telecommunications Authority (Ofta) to relieve it from the obligation to provide physical interconnection to its rivals, saying that they have grown strong enough to do without this type of subsidy.

PCCW made its request as part of its reply to Ofta's consultation process on the issue, which ended last Friday. PCCW says that the requirement for it to lease lines to rivals at a fixed price violates the SAR's Basic Law. Says PCCW's regulatory affairs director Stuart Chiron: "If you look into unbundling, the wire is disconnected from one network and goes to another network. We lose the physical connection, we lose the customer relation, we lose full control of that line."

In any case, says PCCW, it should be compensated by the government because it is obliged to provide the lines at a fixed leasing cost which is way below the true market value, and quotes wording from the Basic Law to support its case.

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