Using this composition of the average kilometre of duct, and BAH estimates of the cost for each of the types of construction (from data gathered from the Highway Department, HKT, HCV and construction costs in the United States and the United Kingdom), the weighted average cost is approximately HK$269,000 per kilometre. The ratio of a 10 to 1 cost disadvantage for scenario 2 over scenario 1 is an accurate representation of the penalty that a new entrant would face in trying to reproduce an existing duct network.
Possibility of duct sharing
The costs of a cable network owned by a non HKT operator would be reduced if the operator were allowed to share the ducts installed by HKT. If HKT were not willing to share the duct space, could HKT be legally forced to share the ducts?
There is some uncertainty on this point. Based on advice received from the Attorney General's Chambers of the Hong Kong Government, BAH
outlines several points which may be helpful in answering this question:
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*
*
As in most countries, the ground in which the ducts are laid, and therefore, by implication, the space within the ducts is owned by the Government. Should the right of HKT to supply telephonic communication within Hong Kong terminate, the Government may, at its option, take over the HKT ducts and/or cables.
The fact that the Government owns the space within the duct does not necessarily imply that it can force HKT to share the ducts with a third party.
In this regard the proviso to section 6 of Cap 269 (section 39 of the Telephone Ordinance) is relevant. It provides that HKT "shall not be deemed to acquire any right other than that of user only in (the space contained within the ducts)".
The question which thus arises is whether or not the right of HKT to use the ducts is an exclusive right. The right of HKT under Cap. 269 to lay cables and construct ducts is conferred upon the company for the purpose of enabling it to supply telephonic communication. HKT would appear to have an exclusive right to use the ducts for that purpose, the implication of which would appear to be that under the law as it presently stands HKT cannot be required to share the ducts.
* Because the HKT ducts may only be used to accommodate cables
employed by the company in the supply of telephonic communication, neither HKT nor any third party may, under the present law, use them for other purposes.
Before the HKT ducts can be used for any purpose unconnected with the supply of telephonic communication the law will require amendment. If this were to be done, it would perhaps be most appropriate to amend section 6 of Cap. 269 to allow a third party to share the ducts with HKT and use them for purposes other than those connected with the supply of telephonic communication. This would raise the issue of whether such a third party should be obliged to compensate HKT and, if so, how such compensation would be
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