Written Submission to Bills Committee

by Peoples Telephone Company Limited

in relation to

the Telecommunication (Amendment) Bill 1999

1. Preamble

1.1 Among those major amendments introduced by the Telecommunication (Amendment) Bill 1999 ("the Bill"), it is believed that all the Public Radiocommunication Service Licensees ("PRS Licensees") will welcome the changes to Section 14 of the Telecommunication Ordinance ("the Ordinance") regarding the right of access to land. If the assent of the Legislature is obtained, all PRS Licensees will have the identical right of access to lands and buildings as currently enjoyed by Fixed Telecommunication Network Services Operators ("FTNS Operators") for the purpose of erecting and maintaining radiocommunication installations. In this submission, we will demonstrate why such an amendment is necessary.

2. Major insufficiencies under the existing Section 14

2.1 PRS Licensees have in fact come across not a few difficulties so far in obtaining access to shielded areas of public places such as tunnels or shopping malls. In a number of bitter experiences we have encountered, the commercial offers from some land owners are neither fair, reasonable nor realistic. For instance, some offers are in effect analogous to "revenue sharing" because the asking licence fee is linked up with the number of our subscriber base or otherwise total volume of airtime revenue in the relevant month. In some other cases, the offers are extortionate enough to exclude any reasonable PRS Licensee so much so that these sites will be available only to those entities who have good connection with the land owners. Coupled with the fact that PRS Licensees are usually in a less favourable position during the course of negotiation, land owners can tactfully manoeuvre the negotiation process to the detriment of PRS Licensees. Many a time we have no choice but to succumb and accept this "all or nothing" approach however unreasonable it may be. Otherwise, we will not be able to extend our coverage to these locations and will likely face the complaints of poor coverage from the public and the press. Worse still, the Telecommunications Authority ("TA") is not in a legitimate position to step in and help PRS Licensees break the ice due to the restriction under the Ordinance.

2.2. In contrast, FTNS Operators have the privilege of seeking help from the TA in the event that similar problems take place and the result being that FTNS Operators will be allowed access without difficulty. This is FTNS Operators' privilege under the Ordinance. As mentioned however, Licensees cannot count on such a "fall back" position in case of deadlock. In our view, there is no practical reason to justify why equality was omitted in the existing Section 14.

2.3 A majority of PRS Licensees, who are not satisfied with the state of affairs, have duly escalated the issue to the Government jointly in March 1997 in response to the Government's consultative papers. We urged the Government to improve Section 14 with a view to reinstating equality into Section 14. The outcome of the Bill demonstrates the fact that our views have been adopted.

3. How the amendment can be justified by other grounds

3.1 It is argued that the revised Section 14 only safeguards the interests of PRS Licensees exclusively. This argument is not difficult to be refuted because the revised Section 14 has duly taken into consideration of the public interest, which is the tenet of HKSAR Government's Telecommunications Policy. To recapitulate, one of the policy objectives is to make the widest range of quality telecommunications services available to the community at reasonable price (emphasis added). As far as we understand, this policy statement remains intact to date.

3.2 We appreciate that there is exigent need to maintain adequate mobile coverage within the territory for the sake of public interest. It is also the reasonable expectation of the public that telephone services, whether fixed lines or mobile services, should have reached every piece of populated land and every popular shopping mall. But our concern is that not until Section 14 is changed, it will be highly remote, if not altogether impossible, for PRS Licensees to accomplish the TA's objective qua the TA's vehicle. Without the revised Section 14 and the assistance of the TA, the efforts of PRS Licensees alone are unable to provide a wide telecommunications coverage for the enjoyment of the public, particularly in those shielded areas where reasonable and sensible commercial agreements cannot be reached between the land owners and PRS Licensees. Therefore, the granting of the right of access equally to PRS Licensees will not only relieve the anxiety of our fellow operators but also benefit the entire community as a whole.

3.3 In the context of regulatory issue, the TA once said in a public occasion that they are in fact establishing the world's best practice in several areas. Whether or not the local practice is best practice should not be judged in isolation. Instead, it must be assessed with reference to world class practice. We do not have many examples of world class practice in hand but we believe our reference to the regime of Australia, the United Kingdom and the United States will suffice to strengthen our case for the revised Section 14. As a matter of fact, all these three countries have appropriate regime for land access open to all telecommunications service providers. That being said, it is submitted that these world class examples should be pursued and employed as the benchmark for streamlining our existing practice.

4. Land owners' concern

4.1 We have been told that some land owners, particularly tunnel operators, have reservation on the revised Section 14 lest such change will affect their property rights and prejudice their rights in seeking compensation. Some also fear that the TA may have excessive power in determining the compensation and the fee under the revised Section 14. With respect, all these contentions are not entirely persuasive on legal perspective.

4.2 With the deliberation of our law draftsmen, the concern of land owners have been duly counted and addressed. Under the revised Section 14, it is manifestly clear that the TA should determine the compensation and the fee reasonably and fairly having taken into account all the circumstances. Also, the change will not confer the TA an absolute power over these commercial matters to the exclusion of judicial intervention. It is our belief that any aggrieved party as a result of the TA's determination (including also PRS Licensee) has the inherent and legitimate right to address his grievances to the court. Obviously, the revised Section 14 has been designed to strive for fairness, impartiality and justice, the benefits of which will be equally available to every concerned parties following the passage of the Bill.

5. Other incidental issues

5.1 We understand that the Bill has also dealt with other incidental matters such as spectrum management and number plan etc. Our view on these matters is that provided the TA will exercise these powers in the interests of the industry and in a fair and reasonable manner, we are not prepared to pose any objection to these amendments. It is particularly because prolonged discussions may delay the revised Section 14 coming into play in good time.

6. Conclusion

6.1 Mobile telecommunications service has become part of our daily life and it can hardly be dispensed with. Furthermore, the distinction between fixed lines and mobile services is becoming increasingly insignificant and immaterial. Being an incumbent operator, we should have the privilege of gaining fair and equitable access to lands and buildings to the intent that we can provide the essential public service to the community without restriction.

6.2 Given all FTNS Operators are allowed the right of access to any lands and buildings under the existing legislation, PRS Licensees should also be given the same right for the sake of equality, failing which such telecommunications policy will be seen as discriminatory or otherwise unfairly prejudicial to interests of PRS Licensees.

6.3 In essence, the revised Section 14 should be greeted with acclaim. This is the best solution to balance the needs and interests of PRS Licensees, land owners and the public. It is also anticipated that following the new Section 14, a "win-win" situation can be seen.

6.4 The TA, being an impartial regulatory body, will be in the best position to oversee the proper implementation of the telecommunications policy and therefore adequate powers should be given to the TA for the fulfillment of such roles. Further, the better view is that by virtue of the integrity of the TA, the outcome of each determination under Section 14 will be fair, reasonable, acceptable and commercially viable as far as all parties are concerned.

6.5 In these circumstances, we must give our wholehearted support to the Bill and we sincerely hope that our Honourable Legislative Councillors will do the same without hesitation.

Peoples Telephone Company Limited
30th August 1999