6.
there is a lack of definition in the terms employed and according to HKT "there is no distinction between the operation of telecommunication systems and the services provided over them. Telephony is treated as a separate subject from telecommunications instead of an inherent part. The definition of telecommunications is itself inadequate and of telephony non-existent. The conveyance of television signals is a telecommunication service although the provision of programme material may not be." [3]
there are price distortions due to those inherited by the Scheme of Control and subsequently the tendency to opt for easier "across the board tariff increases". This affects both the performance of HKT and the overall structure of the industry. Over time these distortions will become even more exaggerated and will create an environment where HKT is not responding to the market place due to the lack of real demand price information. This could also result in inappropriate technological advance.
the Scheme of Control provides little scope for motivation and efficiency for the company.
It is apparent that there are both internal and external forces calling for a change in the existing legislation and policies affecting telecommunications.
The recommendations for change can be summarized as follows :
- substantial amendments are required for the existing Telecommunication
Ordinance and the Telephone Ordinance needs completely redrafting
- alternatively these changes could be incorporated through one single
piece of legislation, combining the telephone with telecommunications
the procedures for tariff adjustments and approvals should be rationalized and the Legislative Council absolved from the process of approving individual tariffs, implying the need for an alternative statutory framework for regulation and control
- the allocation of more resources and expertise for the regulatory
function including a possible separation of this function from the Post Office to an autonomous body, within the Government
the new Authority could be partially funded through a levy charged on the telecommunications companies.
Regulatory institutions
The creation of Oftel in the UK has also generated considerable interest internationally, as an example of an institutional framework appropriate for telecommunications regulation. The key features are:
independence from Government
financing by charges levied on the regulated companies
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