Table of index

• Members
  
• Introduction
  
• Submissions received
  
• Draft Press Release
  
• Other Business
  

The Chairman introduced the meeting as a follow up to Agenda item 10 of the third meeting with the industry on 12 October 1995. The purpose of this meeting was to focus on the review of PNETS interconnect charges, in particular the concerns the ISPs had expressed in relation to the circular letter on the subject issued by OFTA on 29 September 1995. He noted that not all ISPs were present at the meeting, but the whole industry would have access to the notes of this meeting which would be placed on the BBS as well as OFTA's Home Page.

Submissions received

1. The Chairman informed the meeting that 3 written submission had been received since the previous discussion on 12 October. They were from the Houston Crest Co Ltd, the Star Internet on behalf of the Hong Kong Internet Task Force, and the Association for Internet Resources. Questions were raised as to what kind of services should be subject to the payment of interconnect charges and whether OFTA had changed its positions since the TA Statement on the issue was issued in March 1995. The submissions would be studied carefully by OFTA.

   Services subject to interconnect charges

2. The Chairman confirmed that OFTA had not changed its positions, and that, as stated clearly in the TA Statement in March, the three basic criteria for licensing remained as follows:

   • there were physical telecommunication installations

   • the service was a public telecommunication service

   • third party traffic was involved

   He further elaborated that a service which only sold information (e.g. financial information, software, etc.) was not considered as a telecommunication service and neither a licence nor the payment of interconnect charge was required. The same applied to Home Pages and bona fide use of the Internet by closed groups such as liaison networks for schools. He said that the parameters had been clearly set down in the law and it was the responsibility of ISPs to comply with the licensing requirements. He agreed with some of the participants that it might be difficult to define "closed groups", but that OFTA would look into each enquiry carefully on a case by case basis.

3. The Chairman said he was prepared to consider the industry's view that certain services such as the World Wide Web should not be subject to interconnect charges. The industry would have to present their arguments, with the necessary legal backing, to the TA's satisfaction. He would allow three weeks for the industry to make submissions to OFTA. However, services such as e-mail which were clearly subject to interconnect charges should still adhere to the requirements as set out in the 29 September letter.

4. A participant said that an ISP could not prevent some internet service users from gaining unauthorised access to e-mail through hacking into other services which were not subject to interconnect charges, and in that case it would be unfair to penalise the ISP. The Chairman explained that gaining unauthorised access by hacking is an offence in law, and the ISP should report this if it knew about it.

5. To explain the legal basis of the PNETS licence and the interconnect charges, the Chairman referred to S.8 of the Telecommunications Ordinance and the relevant Legal Notice (LN 293 of 1995 published in Gazette No.26/95) and circulated them for the participants' reference. The interconnect charge could be found in the gazette notice made by the FTNS Licensee.

6. At the request of a participant, the Chairman explained the existing arrangements for an FTNS licensee to charge for the various types of telecommunications services it provided, and the policy decisions and rationale behind such arrangements.

7. When asked why access to internet services could not be treated as normal local calls, the Chairman explained that it was a policy decision that internet services should not be subsidised in the same way as local residential services were, and as such the actual full cost for interconnection, as reflected by the interconnect charges, had to be borne by either the ISPs or the end users of the service.

8. A number of participants complained that their own access records did not tally with those kept by the HKTC for billing purposes, and asked whether OFTA could assist in verifying the accounts. The Chairman clarified that the interconnect charges were calculated in terms of occupancy minute and not connection minute, meaning that signaling time and indeed any occupancy of the line would be charged for having used the interconnection network.

9. The Chairman said that while individual ISPs having specific queries on the bill could complain to OFTA and request for an investigation, for matters of principle such as whether charges should be calculated in terms of connection minute, or whether there should be individual metering, the industry could submit their proposals to OFTA for consideration in the current review exercise.

10. Some ISPs proposed to fix the interconnect charge at a flat monthly rate, and one proposed to have a ceiling imposed on the charges. There was also the proposal that the end users should pay the interconnect charge directly to the FTNS licensee. The Chairman advised the participants to set out their proposals in formal written submissions to OFTA.

    Draft Press Release

11. The Chairman referred to the draft press release attached to the circular letter to the industry on 29 September 1995, and clarified that it was meant for release on 1 November. As such it had been issued to the industry for their internal consumption only.

12. In view of the concerns expressed by the industry, the Chairman said he was prepared to withhold the draft press release, pending the resolution of the points set out in paragraph 4 above. He invited written submission from the industry by 7 November and welcomed requests for meetings to exchange views in the meantime.

13. In response to a participant's remark that the meeting was very fruitful and similar discussions should be held regularly, the Chairman said that OFTA would favourably consider the idea if there was a need.

    Other Business

14. With no other queries from the participants, the Chairman closed the meeting at 5:00 pm.

17 October 1995