PCCW opposes rivals in USF consultation

27 Mar 2007

Hong Kong’s telecoms regulator OFTA last week published submissions from operators as part of its review of the country’s Universal Service Fund (USF) regulatory framework. In the main, alternative fixed line telcos including New World Telecom, Wharf T&T, Hutchison and Hong Kong Broadband Network – and some mobile operators – argued for large-scale reform of the USF system or, in some cases, its abolition. However, the current universal service operator PCCW-HKT argued instead for the expansion of the regime to include new projects such as the government’s plans to construct a publicly-funded free Wi-Fi network. Compulsory USF payments from telecoms companies, totalling over HKD100 million (USD13 million) per year, subsidise around 9% of PCCW’s fixed lines as well as most of the territory’s payphones.

New World’s contribution included the statement that ‘The universal service arrangements are a highly intrusive and discriminatory means of imposing social obligations (including taxes) by proxy on a particular sector of normal commercial businesses.’ Meanwhile, Wharf T&T said it believes that the USF should be abolished, or alternatively, that PCCW should be made solely responsible for the funding of universal service delivery, arguing that “with the universal service contribution PCCW-HKT has built out its territorial wide network that has enabled [it] to provide other non-basic services such as broadband services and pay TV.’ Other respondents including Hong Kong Broadband Network agreed, whilst another contributor, ec Telecom, said simply that residents in rural and remote locations should bear their own costs. Adding another twist to the debate, mobile operator CSL New World Mobility said: ‘It is not completely controversial to suggest that the provision of a universal service could potentially be better provided by mobile carriers via their mobile networks than fixed line operators.’ PCCW argues that moves to cut the USF would represent ‘a shameful attack on the poor, the handicapped, the elderly and those who live in remote areas.’

Hong Kong, HKT (incl. CSL)