GRS 1200
CONFIDENTIAL
CONFIDENTIAL
НИД 3064 RECEIVEL REGISTRY
- & MAR 1987
FM HONG KONG
TO IMMEDIATE FCO
TELNO 781
OF 03044OZ MARCH 87
INL
.Y
Action Taken
Mek
13/3
CABLE AND WIRELESS / BRITISH TELECOM : OUR TELNO 462
The Thin
IN PARAGRAPH 6 OF TUR WE TOLD YOU THAT WE ANTICIPATED FINALISING
OUR RECOMMENDATIONS TO EXCO ONCE WE HAD HAD THE BENEFIT OF
DISCUSSIONS WITH SIR GEORGE JEFFERSON OF BRITISH TELCOM (BT) AND SIR ERIC SHARP OF CABLE AND WIRELESS PLC (CW PLC) BOTH OF WHOM WERE TO VISIT AT THE END OF FEBRUARY. IN THE EVENT THE LATTER WAS REPRESENTED BY BRIAN PEMBERTON. THIS TELEGRAM BRINGS YOU UP TO
DATE ON THESE TWO VISITS AND HOW OUR THINKING IS DEVELOPING ON
THIS VERY DIFFICULT ISSUE.
2. BOTH SIR GEORGE AND PEMBERTON LOBBIED HARD BOTH WITHIN
GOVERNMENT AND AROUND TOWN. AS A RESULT OF THEIR MEETINGS WITH THE ACTING GOVERNOR, CHIEF SECRETARY AND FINANCIAL SECRETARY OUR THINKING AS TO HOW WE SHOULD REACT TO HUTCHISON CABLEVISION'S (HCV) PROPOSALS TO ESTABLISH A SECOND TELECOMMUNICATIONS NETWORK HAS DEVELOPED A STAGE FURTHER THOUGH WE ARE NO CLOSER TO SOLUTIONS.
3. AS YOU WILL RECALL, HCV, WHICH IS BACKED BY BT, WANTS TO ESTABLISH A TELECOMMUNICATIONS NETWORK, WHICH WOULD NOT ONLY CARRY TELEVISION BUT WOULD ALSO COMPETE WITH THE HONG KONG TELEPHONE COMPANY (TELCO) NETWORK IN THE CARRYING OF NON-FRANCHISED TELECOMMUNICATIONS SERVICES. THESE PROPOSALS WOULD HAVE THE EFFECT OF INCREASING COMPETITION IN TELECOMMUNICATIONS WITHOUT INFRINGING THE EXISTING TELCO VOICE TELEPHONE FRANCHISE. PRIOR TO SIR GEORGE JEFFERSON'S VISIT WE WERE CONSIDERING GOING TO EXCO WITH A RECOMMENDATION THAT, IN PRINCIPLE, A SECOND PUBLIC TELECOMMUNICATIONS NETWORK FOR THE CARRYING OF SERVICES OUTSIDE THE TELCO FRANCHISE SHOULD BE PERMITTED. THIS RECOMMENDATION WAS BASED, ESSENTIALLY ON THE GROUNDS THAT COMPETITION IS TO BE ENCOURAGED. WE COULD SEE NO SERIOUS DOWNSIDE EFFECTS.
4. HOWEVER, DURING HIS VISIT, SIR GEORGE JEFFERSON ARGUED THAT IF THE HCV ALTERNATIVE NETWORK WAS TO BE RESTRICTED SOLELY TO TELECOMMUNICATIONS SERVICES OUTSIDE THE TELCO FRANCHISE AND CABLE AND WIRELESS (HK) LTD (CWHK) INTERNATIONAL TELECOMMUNICATIONS FRANCHISE THERE WOULD BE INSUFFICIENT INCENTIVE FOR BT TO INVEST. ACCORDINGLY, BT WANTED A COMMITMENT FROM THE GOVERNMENT THAT WHEN THE TWO EXISTING EXCLUSIVE TELECOMMUNICATIONS FRANCHISES EXPIRE (IN 1995 AND 2006 RESPECTIVELY), HCV SHOULD ALSO BE ALLOWED TO COMPETE IN THE PROVISION OF THE FRANCHISED ERVICES.
CONFIDENT.AL'
IS
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