The Administration's Further Response on the
New Sections 35A and 36D Relating to
the Telecommunications Authority's Request for,
and Inspection of Records, Documents and Accounts
When the submission from the Hong Kong Society of Accountants and the Administration's related response were discussed at the last Bills Committee meeting held on 6 October 1999, some members raised concern over the scope of the powers of the TA under the new sections 35A and 36D, the TA's powers to disclose the information obtained under these sections, and the TA's practice to ensure the confidentiality of the information obtained by him. The Administration agreed to provide a further response on the subject. Scope of Powers under the New Sections 35A and 36D
New Section 35A
2. The new section 35A is modelled on an existing licence condition (e.g. general condition 19 of FTNS licence 1
). The new section is intended to codify the TA's existing power to inspect records, documents and accounts of the licensee for the purpose of enabling the TA to perform his statutory functions (e.g. whether the licensee is in compliance with its licence obligations). This power has to be exercised from time to time on a routine basis as part of the operational functions of the TA to monitor the status of compliance of the licensees.
3. Apart from books or account records, the TA, in performing his duties under the Telecommunication Ordinance to regulate the telecommunications industry, has to inspect records and documents such as phone traffic records, contracts, technical specifications, drawings, schematic diagrams, test reports and records, customers' billing records, instructions to marketing staff, quotations to customers, for purposes such as detection of illegal traffic routing, unauthorized use of telecommunications systems, service bundling, unauthorized pricing, and violation of fair and competition conditions. While we note that different regulatory authorities for other sectors may be given different powers for the exercise of this particular function of obtaining information, we must bear in mind that the scope and purpose of regulatory functions are different to meet different needs. The scope of TA's duties and functions require access not only to records and books, but also technical information including information embedded in different parts of the licensees' operating systems. We believe that a more appropriate comparison of the current proposal is with overseas telecommunications regulators. We have reviewed how overseas jurisdictions such as Canada, the UK and Australia empower their telecommunications regulators to inspect records and documents of licensees. These regulators are also given similar statutory powers to enter and inspect any documents and information relevant to the exercise of their functions and powers. Details of these overseas examples are at Annex A
. In view of the advances in technological development and the increasingly keen competition in a liberalising telecommunications market, the TA needs to be given appropriate powers to monitor the operators' licensed activities and businesses.
4. Given the above reasons, we have come to the view that it is not feasible or practicable to define an exhaustive list of documents and information that the TA may have access to. The new section 35A as presently drafted is in line with international practice for the more liberalised regulatory regimes.New Section 36D
5. The new section 36D empowers the TA to apply to a magistrate on oath for warrants to seek information or document from non-licensees if the information or document is relevant to the performance of the TA's functions or the exercise of his powers. If the magistrate considers that the TA has abused this provision, the application for a warrant will not be granted. This new section is proposed in the light of operational experience that information from customers may sometimes be necessary to determine whether a breach has or has not occurred.
6. As explained at the last Bills Committee meeting, the TA may have to obtain information from non-licensees in his exercise of powers, and this should not be confined to the investigation of anti-competitive practices. For example, The TA may have to ask a shop owner to supply information on the importer or supplier of illegal radio apparatus (e.g. illegal cordless telephones) found at his/her shop premises. Another example is that the TA may have to require persons who have been found to be using illegal radio apparatus to supply information where the apparatus was purchased.
7. We have also reviewed how overseas jurisdictions such as the UK, Australia, Canada and Singapore empower their telecommunications regulators to require production of information from non-licensees. Our new section 36D is more restrictive than the powers granted to other overseas regulators, requiring the TA to go to the court for an order to obtain information from a non-licensee as a "check and balance" measure. In contrast, other regulators such as the Director-General of Telecommunications may by notice in writing require any person to produce any document specified in the notice, furnish such estimates, returns or other information as may be specified in the notice, for the purpose of investigation of any offence under the Act or exercise of the powers of the Director-General under the Act (section 53 of the Telecommunications Act 1984 of the UK). Details of these similar powers provided to overseas telecommunications regulators are at Annex B
. In view of the fact that section 36D is a new power given to the TA, we believe that our proposal is reasonable and suitable for the circumstances in Hong Kong.
Disclosure of Information
8. The new sections 35A and 36D, as presently drafted, will not empower the TA to disclose the information obtained under these sections. The TA is only empowered under the new section 7I(3) to disclose information obtained from public telecommunications service providers under the new section 7I. Under the new section 7I(3), the TA may disclose information if he considers that it is in the public interest to disclose that information. The new section 7I(4) requires that the TA should invite representation if the disclosure would result in the release of information concerning the business, commercial or financial affairs of the licensee and could reasonably be expected to adversely affect that licensee's lawful business, commercial or financial affairs. The power is a restrictive power necessary for the TA to exercise his functions. For example, if a licensee has engaged in anti-competitive behaviour/deceptive behaviour, the TA may find it in the public interest to disclose certain information provided by the licensee in order to protect consumer interests.
Information Technology and Broadcasting Bureau
Examples of similar powers provided to overseas telecommunications regulators to inspect records and documents of licensees
||Under section 71of the Telecommunication Act, an inspector of the Canadian Radio-television and Telecommunications Commission may enter and inspect, at any reasonable time, any place owned or under the control of a Canadian carrier in which the inspector believes on reasonable grounds that there is document, information or thing relevant to the enforcement of the Act or any special Act and examine the document, information or thing or remove it for examination or reproduction.
||Under section 549 of the Telecommunications Act 1997, an inspector of the Australian Communications Authority (ACA) may require any person to produce any documents requested by the inspector that is reasonably necessary for the purpose of ascertaining whether Part 21 (Technical Regulation) of the Act has been complied with.|
Under section 156 of the Trade Practices Act 1974 (which applies to the telecommunications sector), the Australian Competition and Consumer Commission may inspect and make copies of any document produced in pursuance of a notice under section 155.
||Under section 27 of the Competition Act 1998, any officer authorised by the Director of Fair Trading (Director) may enter any premises (without warrant) in connection with an investigation under section 25. Under section 25, the Director may conduct an investigation if there are reasonable grounds for suspecting that prohibitions against anti-competitive practices or abuse of dominant position have been infringed. Upon entry into the premises, the officer may require the production of any document which he considers relates to any matter relevant to the investigation and take copies or extracts from any such document produced. The officer may also require any information which he considers relates to any matter relevant to the investigation held in a computer to be produced in a form in which it is visible and can be taken away.|
Examples of similar powers provided to overseas telecommunications regulators to require production of information from non-licensees
||Under section 53 of the Telecommunications Act 1984, the Director General of Telecommunications may, for any relevant purpose, by notice in writing signed by him, require any person to produce, at a time and place specified in the notice, any documents which are specified or described in the notice and to furnish such estimates, return or other information as may be specified or described in the notice. "Relevant purpose" means any purpose connected with the investigation of offences under the Act or the exercise of the Director's function under section 16 (securing compliance with licence conditions) or 49 (investigation of complaints).|
||Under section 522 of the Telecommunications Act 1997, the Australian Communications Authority (ACA) may, by written notice given to a person (who is not a carrier or a service provider), require the person to give to the ACA any information or document that is relevant to the performance of any of the ACA's telecommunications functions or the exercise of any of the ACA's powers.|
Under section 155 of the Trade Practices Act 1974 (which applies to the telecommunications sector), the Australian Competition and Consumer Commission (ACCC) may by notice served on a person (who is not necessarily a telecommunications licensee) to furnish to the ACCC any information and produce to the ACCC any documents relating to a matter which constitutes, or may constitute, a contravention of the Act.
||Under section 37(2) of the Telecommunication Act, the Canadian Radio-television and Telecommunications Commission (CRTC) may require a person other than a Canadian carrier to submit to the CRTC, in periodic reports or in such other form and manner as the CRTC specifies, any information that the CRTC considers necessary for the administration of the Act or any special Act. |
||Under section 117 of the Telecommunication Authority of Singapore Act, the Authority may by notice require any person (not necessarily a licensee) to furnish to the Authority, within such period as shall be specified in the notice, all such documents or information relating to all such matters as may be required by the Authority for purposes of the Act and as are within the knowledge of that person or in his custody or under his control. Failure to comply with the requirement shall be an offence.
1. The licensee shall permit the Authority or any person authorized by him in writing for the Authority's own purpose to inspect and if required to make copies of records, documents and accounts relating to the licensee's business for the purpose of enabling the Authority to perform his functions under the Ordinance and this licence.