TNAG-1779-FCO40-2539-Hong-Kong-international-telecommunications-1988 — Page 238

HKT

Second network operator

To build cable television

100 km

1920 km

network serving

residential buildings

To build competitive

140 km*

telecommunications network

serving business district

3.

of which about 40 km would be saved if the competitive telecommunications network was combined with the cable television network: most of this 40 km would be along MTR lines, so that disruption consequent on cable laying would be less severe.

It

It should be noted that road excavation is very common in Hong Kong. is estimated that about 1,100 road excavations are in progress at any one time throughout the territory. The highways department receives about 100 applications per day for excavation permits.

Since the overwhelming majority of new duct-work would be required for the cable television rather than telecommunications network needs, the quantitative discussion which follows may be taken as relevant either to cable television alone or to both of the new network possibilities taken together.

A submission by HKT to this consultancy study has attempted a quantification of economic welfare losses arising during duct construction from:

increased traffic congestion increased noise pollution

business losses in retail establishments

cost of delay in introducing cable television

real wage inflation in the construction industry.

In the case of the first three of these categories, we concur with HKT's view that indirect or externality costs would be incurred by construction of the second network. In the case of the latter two we do not concur that the delay or otherwise in installing the cable television network affects directly the transaction between seller and buyer of cable television service, and therefore does not constitute an externality but rather a direct cost or benefit. Whether, when all factors are taken into consideration, the second network proposal would result in a higher or lower rate and eventually level of uptake of cable television service is a matter for debate; we do not believe following the reasoning in section 5.4 above, that there is a firm evidence that the HCV proposal will fare better or worse than the HKT solution in this regard. As for wage inflation in the construction industry, this constitutes income growth and hence a contribution to Gross National Product. proposition that "real wage inflation in the construction industry" is a net economic disbenefit would be disputed by many [3].

The

Including those in the construction industry whose real wages get

inflated.

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