Table of index

• Members
• Agenda item 1 - Confirmation of the notes of the last meeting
• Agenda item 2 - Matters arising
  Licensing Requirement for Non-Commercial Services
• Validity of PNETS Licence
• Agenda item 3 - Developments in Internet
  Hong Kong Internet Exchange
• Internet Voice
• Agenda item 4 - Telecommunications Bill
• Agenda item 5 - Control of message content
• Agenda item 6 - Internet Domain Name
• Agenda item 7 - Asia Pacific Information Infrastructure (APII)
• Agenda item 8 - Interconnection Standard
• Agenda item 9 - Review of legislation
• Agenda item 10 - Review on PNETS Interconnect Charge
• Agenda item 11 - Any Other Business
• Date of next meeting

Agenda item 1 - Confirmation of the notes of the last meeting

Agenda item 2 - Matters arising
Licensing Requirement for Non-Commercial Services

1. Participants noted that no blanket statement for non-commercial services could be issued by the TA. The Chairman considered that the issue had been fully discussed and concluded at the last meeting. The meeting agreed to discharge the item.

   Validity of PNETS Licence

2. The Chairman informed the meeting that individual PNETS licences were being amended upon annual renewal to remove the time bar of 30 June 1995. In response to enquries from some of the participants, he clarified that the licence was drafted in accordance with the Telecommunications Regulations and would be applicable to all relevant value added service providers. He explained that while the underlying policy would be upheld, the licence conditions might be updated from time to time to cater for developments.

3. With no further queries, the item was considered discharged.

   Agenda item 3 - Developments in Internet
   Hong Kong Internet Exchange

4. Mr C H Cheng reported that the Chinese University of Hong Kong (CUHK) had obtained a PNETS licence for the Hong Kong Internet Exchange (HKIX). 10 Internet Access Providers (IAPs) had been connected to the system and 8 more were about to be connected. Mr Cheng informed the meeting of the criteria for joining the HKIX, namely that the applicant must be a local IAP with valid licences, and that he must also have his own overseas connections. Content providers would not be entertained.

5. Mr Cheng said that the CUHK intended to maintain traffic at a minimum speed of 512K. The Chairman suggested that some statistics on the traffic of the HKIX be recorded for reference.

   Internet Voice

6. The Chairman invited input on the latest development in Internet Voice communications. He said that the OFTA wished to liberalise the market as far as permissible under existing laws, as such it had no pre-determined positions and was always prepared to open itself to suggestions from the industry.

7. Mr Michelangeli remarked that as service providers, the IAPs would only provide connectivity to the users and it would be up to the user to decide whether he wished to have voice communications. The Chairman remarked that the public telecommunications service licensees had a duty to ensure that their licence conditions were complied with.

8. In response to a comment from another participant, the Chairman reassured the participants that commercially sensitive information could be submitted to OFTA under confidential cover, and that although it would not be discussed openly at meetings, it could be a useful reference for OFTA.

9. Mr Mueller would like to know how OFTA distinguished between Internet voice and other value-added voice services. The Chairman said that OFTA had adopted a definition for value-added voice which was "Value added voice service means any telecommunication service involving the conveyance of speech, music or other sounds which does not amount to real-time telephonic conversation between humans."

   Agenda item 4 - Telecommunications Bill

10. The Chairman informed the meeting that the Telecommunications (Amendments) Bill was being drafted for submission to the Legislative Council within the current legislative year.

11. Mr David Wu asked what major amendments would be incorporated and Mr Mueller asked whether the concept of class licensing would be introduced. The Chairman responded that major areas to be considered would include the control over anti-competition practices, consumer protection and class licensing.

12. Replying to Mr Alex Yu, the Chairman said that the draft Bill would be published for open consultation and would be available at this meeting and on BBS and OFTA's Home Page. In the meantime written proposals and views from the industry were welcome.

13. When asked whether the legislative amendment would take into account the control of message contents (Agenda item 5), the Chairman said that the current thinking was that the conveyance of message and the content of the message would be governed by different legislative vehicles, namely the Telecommunication Ordinance and the Broadcasting Ordinance or the Control of Obscene and Indecent Articles Ordinance respectively. The administration would coordinate the amendments to both and would welcome comments from the industry.

    Agenda item 5 - Control of message content

14. Mr F W Ho of the Television & Entertainment Licensing Authority (TELA) reported that the Control of Obscene and Indecent Articles Ordinance (COAIO) was being examined by the Recreation & Culture Branch (RCB) and the TELA with respect to materials in the Internet and that he would keep members informed of developments.

    Agenda item 6 - Internet Domain Name

15. Mr K M Fung invited OFTA and participants' views on whether Internet domain names should be allocated strictly on a first come first served basis, or that an allocated domain name could be withdrawn from the holder and reallocated to a second applicant if the latter could prove that he was the registered holder of that name.

16. Mr Aaron Cheung asked how the CUHK intended to deal with trademarks and names registered overseas. Mr K M Fung clarified that only records of local domain names were being maintained by the CUHK.

17. Mr Michelangeli said that decisions made by the CUHK in relation to the allocation, suspension or withdrawal of domain names might be subject to challenge and CUHK might find itself being sued by the applicants. He therefore advised CUHK to disclaim responsibility in this regard.

18. Mr K M Fung asked whether a statement could be issued either by the OFTA or by the Intellectual Property Department (IPD) to clarify that the CUHK acted merely as a local domain name registry and did not take up the legal responsibility for the allocation of domain names. The Chairman noted that the industry had previously rejected the idea of Government having central control over the allocation of domain names, but he agreed that OFTA could liaise with the IPD to seek the latter's advice on the issue.

    Agenda item 7 - Asia Pacific Information Infrastructure (APII)

19. The Chairman informed the meeting that the next APEC Telecom Working Group Meeting would be held in March 96. In the meantime this agenda item would be discharged, but views from the industry on the subject would be welcome.

    Agenda item 8 - Interconnection Standard

20. The Chairman noted that no submissions had been received from the industry, and invited participants to be more vocal on the issue.

21. Mr Michelangeli raised the problem of IP address portability. He said that as the addresses were often assigned to the service providers instead of to end-users, it would be difficult to allow for portability. Mr King Ho asked whether OFTA had any idea what standards were to be adopted for broadband networks.

22. The Chairman said the matter was still being considered, and views would be invited from the Standards Advisory Committee.

    Agenda item 9 - Review of legislation

23. Mr Mueller pointed out that there had been a heated debate in the USA as to whether IAPs were to be responsible for the message content. The Chairman said that in Hong Kong a publisher had to be legally responsible for the content of the articles he published, and that under the COIAO electronic messages were within the definition of an article. He accepted that there could be some grey areas as far as the various types of telecommunications services were concerned, and invited participants' views on the subject.

24. In response to a question from Mr Charles Mok, the Chairman offered to collect views from the industry and, if appropriate, refer them to the RCB. Mr F W Ho of TELA supplemented that Mr Mok's proposal for setting up a forum to discuss matters related to the COIAO could be submitted to the RCB for consideration.

    Agenda item 10 - Review on PNETS Interconnect Charge

25. The Chairman said it was OFTA's policy to regulate only the interconnect charge of the dominant carrier, and that the principle for deciding on level of charge was that it should be in line with the actual cost plus a reasonable return to cover the cost of capital. OFTA would study the per minute cost of use of the HKTC network in the coming months to ascertain the appropriate level of charge.

26. The participants then gave their views on the subject. Some proposed that the callers, instead of the Internet service providers, should pay the charge. They believed that the HKTC, with its existing customer network and rich experience in billing IDD and Infoline services, should be in the best position to recover the interconnection costs directly from the end users. The Chairman said that Infoline service providers paid a charge to the HKTC for settling the bills on their behalf, and he believed individual Internet service providers might also approach the HKTC or other FTNS licensees to negotiate a similar billing arrangement if they so wished.

27. Some participants opined that as the availability of Internet services was beneficial to the community, it should not be subject to interconnect charges, and should be treated as normal local calls. The Chairman responded that the arrangement for local calls whereby there was a fixed monthly rental with no per call charges was a policy decision made on social grounds, and as yet it was not considered that the same grounds should apply to the Internet service which was neither as essential nor popular as the normal residential and business lines. However, he confirmed that the interconnect charges were not being used to subsidise any other services offered by the HKTC.

28. A participant was concerned that the levying of an interconnect charge would increase the operating costs of the ISPs, and he queried whether this would amount to an anti-competitive practice by the HKTC whereby all ISPs would have to give up their business and HKTC became the only one capable of offering Internet in the market. The Chairman replied that the law already provided for means to curb anti-competition practices and if HKTC offered an Internet access service the same PNETS charge would apply.

29. Some participants were of the view that OFTA had changed its positions since the TA Statement in March, such that services which did not previously require a "300" line would now do. They requested that OFTA set out an exhaustive list of services which would require the payment of interconnect charge. The Chairman said that OFTA had only been clarifying but not changing its positions, and that the criteria for requiring interconnect charges were still the same. While it was not practicable for OFTA to produce an exhaustive list of services requiring the payment of interconnect charge, it would provide guidance to the industry by explaining the charging principles and highlight some common services which required payment by way of a general example. Should the ISPs have specific concerns or queries, they should file them with OFTA for consideration.

30. Participants made references to overseas practices and considered that the requirement to pay interconnect charges was unreasonable. The Chairman said that the level of interconnect charges was a subject under OFTA's review. He noted that the ISPs were eager to express their views on the subject, and proposed to have a separate meeting for this purpose. It was agreed that the meeting would be held on 17 October 1995 at 2:30 pm in the OFTA Conference Room, and that all ISPs interested in the subject were welcome.

    Agenda item 11 - Any Other Business

    Mr C K Cheng informed the meeting that OFTA was constructing its Internet Home Page which would come into operation shortly. The access code to this was "www.ofta.gov.hk".

    Date of next meeting

    A meeting on the review of PNETS interconnect charge would be held on 17 October 1995 as agreed under Agenda item 10.

12 October 1995