XN000022-1995-03-30 — Page 13

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INTRODUCTION

A variety of services are currently available in the Hong Kong market under the generic title of call-back services. These services use a number of different technical methods to allow consumers to take advantage of any differential that may exist between the prices for outgoing and incoming "international" calls, thus effectively allowing consumers to decide whether to establish the call from Hong Kong or from the other end of the international circuit. With the continuing development of technology it is likely that future call-back services will utilize even more advanced techniques. Attachment 1 provides some details on the operation of some of the commonly available call-back services. These services are experiencing a major surge in activity throughout the world and have been the subject of attention by a number of national telecommunications regulators. They are likely to continue to be subject to regulatory scrutiny consistent with the particular regulations which apply in each regime. In Hong Kong, the Hong Kong Telecom International (HKTI) licence forms a key component of the regulatory structure.

On 9 July 1994 HKTI requested from the Telecommunications Authority (TA) "a formal view on the regulatory status of the different types of "call back" services, and in particular their consistency with the HKTI licence". Further HKTI contended that in its view the call-back services do infringe HKTI's exclusivity. In response to requests to substantiate this claim, HKTI provided a detailed submission to the TA on 13 September 1994,

THE TA's ROLE

HKTI's assertions as to the extent of its monopoly raise questions of the approach which the TA should adopt, charged as he is with the duties of regulating the For the purposes of proper telecommunications industry within Hong Kong. regulation and control, the TA must form a view as to the nature and extent of that monopoly.

However, it is important to emphasize that the TA must remain in a neutral position, taking an independent view of the extent of that monopoly. The TA's regulatory responsibilities impose the duty of standing above the contest between HKTI and those circuit or service providers who wish to engage in licensable activities in Hong Kong. If a telecommunications activity is licensable under the laws of Hong Kong, in particular the Telecommunication Ordinance, the TA must decide if it infringes HKTI's monopoly.

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