calculated. It is the opinion of the Attorney General's Chambers that, if a decision is reached that compensation is to be paid, it should be related to the costs involved in the construction of the ducts. The alternative of the third party paying HKT in return for its ability to share the ducts is not favoured.
4.2.3 The Supertrunk Network
The MTR has agreed in principle to allow a cable TV operator right-of-passage for the supertrunk. Since the supertrunk will use fibre optic technology, there are no technical limitations in terms of electrical or magnetic interference which would be induced by the MTR and KCR. However, the MTR has required that for fire safety reasons, any cable laid in the tunnels would need to be armoured. The extra cost of the material is approximately 16% and has been taken into account in the calculations.
Owing to the fact that access to the MTR facilities will only be available during non-operational hours the rate of build for the supertrunk would be limited. However, the time to completion will still be significantly faster than if HCV did not have access to the MTR. BAH's view, two years is a reasonable estimate of the time required by a cable TV operator to build the supertrunk network using this approach.
In
In the United Kingdom disruption caused by Mercury cabling underground has been kept to a minimum by only doing primary cabling at night. Secondary cabling and subscriber connection occurs during office hours. Thus within a two year period Mercury has succeeded in passing 650 buildings and connecting 425 buildings in a high rise prime commercial area similar to Central with the minimum of disruption.
4.2.4 Support and operational requirements
The categories of recurrent costs and the relative orders of magnitude is the same as those described in scenario 1. However, the fact that the entrant in these scenarios would be faced with setting up a new organization in Hong Kong instead of expanding an organization, leads to several increases in the recurrent costs.
The technical support costs are assumed to be 4% higher for the new entrant. This increase in the cost represents the advantage that the established monopoly would have in sharing the telecommunications technical staff with the cable operation. Although HKT does have a large, experienced technical staff, especially for the cable laying operations, there is little restriction on a new entrant to hiring part of this experienced staff. Additionally, a new entrant could establish a highly competent technical staff by bringing in experience from other parts of the world. This 4% cost penalty captures these additional
costs.
The base year marketing costs would be the same for the second network as in scenario 1. The base year administrative costs are considered to be 5% higher for a new entrant primarily because HKT could save costs by taking advantage of any inefficiencies in its existing administration
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