5.
Forces of change
Like many countries Hong Kong has liberalized the regulations relating to the supply of CPE and VANS relatively rapidly. The arguments put forward for this deregulation were very similar to those raised in other
countries.
HKT favoured competition on the basis that it would:
- increase their overall business sales
-
- provide a wider range of choice for consumers
enable them to set their prices according to market forces rather than have them regulated by the Government.
The Government favoured competition for many of the same reasons but also hoped that competition would provoke better value for money with higher quality services at lower costs to the consumers.
The existing telecommunications legislation in Hong Kong is under pressure from several external factors:
tariff distortions that may have been inherited at the time of introduction of the Scheme of Control have become exaggerated over the past decade
the pace of technological change is outstripping the ability of the regulatory arrangements to accommodate it
the merging of telecommunications and data processing technology and the demand for new services combining voice telephony with data, and television with business (i.e. voice, data and video)
- falling real costs for long distance transmission and certain switching
functions
-
the need to keep abreast of world trends in telecommunications to avoid falling behind the key markets with which Hong Kong inter-reacts.
This means that the Telephone and Telecommunication Ordinances will require continuous amendments and that the Schedules will need to change. The Government's regulatory resources are insufficient to cope with this rapidly changing environment. Internally within Hong Kong there are problems associated with the operation of the legislation:
- it is described by HKT as "unnecessarily complex and time consuming"
which may place a brake on the development of new products and services
[3]
the demand for new services has made the distinctions between services drawn by the Scheme of Control and the Obligatory Agreements inflexible and difficult to apply in practice [3]
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