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Transcript of OFTA on ip phony (HK)
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Annex
SUMMARY OF THE SUBMISSIONS RECEIVED ON
CONSULTATION PAPER OF
REGULATION OF INTERNET PROTOCOL (IP) TELEPHONY
INTRODUCTION
On 4 October 2004, the Telecommunications Authority issued a
consultation paper on Regulation of Internet Protocol (IP) Telephony (theConsultation Paper). The Consultation Paper aimed at soliciting the views
and comments from the industry and interested party on some significant issues
related to IP Telephony services such as (a) policy and licensing, (b) numbering
resources, (c) interconnection and charge settlement and (d) consumer and
other issues. The views collected will form the basis on which the TA would
consider when formulating the policy framework and regulatory requirements
for the emerging IP Telephony service and related applications using IP
technology.
2. The consultation officially ended on 4 December 2004. A total of 38
submissions were received:
Companies
AT&T Global Network Services Hong Kong Ltd.
China Resources Peoples Telephone Company Limited
CM Tel (HK) Ltd.
e-Kong Group Limited
EasyLink Networks & Belgravia Group (Asia) Limited (ELN)
HKdotCOM Ltd.
Hong Kong Broadband Network Limited
Hong Kong Cable Television Limited
Hong Kong CSL Limited
Hutchison Global Communications Limited
Interactive Broadband Services Ltd. (iBBS)
Microsoft Corporation
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New World Telecommunications Limited
Pacific Supernet Limited
PCCW-HKT Telephone Limited
REACH Networks Hong Kong Limited
SmarTone Mobile Communications Limited
SUNDAY o/b Mandarin Communications Limited
Systech Telecom Limited
Wharf T&T Limited
Zone Limited
Organisations
The Computing Technology Industry Association (CompTIA)
Consumer Council Hong Kong Internet Registration Corporation Limited (HKIRC)
Hong Kong Internet Service Providers Association (HKISPA)
Hong Kong Wireless Technology Industry Association (WTIA)
Hong Kong Telecommunications User Group (HKTUG)
International Chamber of Commerce (ICC)
The Law Society of Hong Kong
Senior Citizen Home Safety Association (SCHSA)
The Society of Hong Kong External Telecommunications ServiceProviders
Individuals
Dr. Xu Yan
Eric Kwan
Ms. Chan
Dr. John Ure
Legislative Councillor Hon Sin Chung Kai, JP
NAC members
PCCW-HKT Telephone Limited
Wharf T&T Limited
3. The submissions have been published on the website of the Office of
the Telecommunications Authority (OFTA) at www.ofta.gov.hk.
http://www.ofta.gov.hk/http://www.ofta.gov.hk/http://www.ofta.gov.hk/ -
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4. The submissions are summarised in this document. .
REGULATORY ISSUES OF IP TELEPHONY
12(a) Are there any other issues in addition to those listed above that
should be considered in formulating the regulation for IP Telephony
services?
5. Dr. Xu Yan submits that as long as a user is able to connect to the IP
platform, it makes no sense for the regulator to pay a specific attention to a
specific service (e.g. VoIP) as the IP platform is supposed to support every
service. On this basis, Dr. Xu proposed the concept of universal connection,
namely every citizen shall be guaranteed to be able to connect to, or connectedby, the IP platform. Although the concept of universal connection may be a
relatively advancing and challenging target as far as this point is concerned, Dr.
Xu considers that it will help formulate a forward looking policy when
reviewing the existing universal service mechanism.
6. Hon. Sin Chung Kai shares similar view with Dr. Xu and considers
that the policy framework should not narrowly target on specific service.
Instead, we should keep our eyes on the development of IP technology and theemergence of multimedia applications to be delivered over NGN. In addition,
Hon. Sin Chung Kai has reservation towards the adoption of the Chinese term
for IP Telephony initiated by the industry and followed by usersand OFTA. In considering that broadband services always give people an
impression that it is better than existing services like broadband internet access
service is better than narrowband dial-up service, he suggests that OFTA
should officially define a correct Chinese term for IP Telephony so as not to
mislead the customers into recognizing it as a service superior to conventional
telephone. In his submission, he uses the term as the Chineseterm of IP Telephony, which is the same as the Chinese term we use. Hon.
Sin Chung Kai views IP Telephony as an Internet application only and it is not
going to substitute conventional telephone service. In this regard, Hon. Sin
Chung Kai suggests that OFTA should regularly conduct survey on user
penetration of IP Telephony service and carry out review on the regulatory
policy should the survey indicates that IP Telephony has superseded or become
a substitute of the conventional telephone service.
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7. CompTIA also has a view similar to Dr. Xu Yan and Hon. Sin Chung
Kai. It believes OFTA should recognize the significant industry convergence
which is occurring between IT and telecommunications sectors and develop a
relevant policy framework. It urges OFTA not to regulate IP-enabled services in
a piecemeal fashion since regulating a single IP-enabled application will have a
profoundly negative impact on all IP-enabled applications.
8. PCCW suggests that, with the recent and rapid introduction of VoIP
services in Hong Kong, the TAs decision-making in this important area should
serve to assist in preserving investment incentives, encourage innovation and
facilitate the continued development of new services and technology.
9. SmarTone considers that the Consultation Paper has not addressedfully the issues concerning how IP Telephony would affect the mobile market
as well as the convergence of mobile and fixed services. SmarTone opines that
IP Telephony is not only applicable to fixed services, but also to mobile
services. As such, mobile operators should be allowed to offer IP Telephony
services using the existing mobile numbers 6X and 9X if FTNS operators are
allowed to offer IP Telephony services using the existing fixed numbers.
SmarTone suggests that OFTA should look into the licensing requirements and
spectrum assignment policy for the IP-based broadband wireless solutions suchas WiFi or WiMax. CSL shares with SmarTones view and considers the
Consultation Paper does not adequately recognise or contemplate the wireless
aspects of an IP Telephony service. It strongly urges OFTA to conduct further
industry consultation on this issue and in particular suggests that a wireless
industry forum be held so that 3G mobile carriers, 2G mobile network
operators and mobile virtual network operators (MVNO) and other providers of
wireless services are provided a proper context in which to submit their views
to OFTA about this important subject.
10. ELN suggests that issues such as number transparency, connectivity,
features (call forwarding, call waiting, conferencing) and etc. should also be
addressed.
11. Consumer Council considers that the government should enhance
consumer education on IP Telephony service and make it a regulatory
requirement for the relevant operators or service providers to communicate
their service information to the consumer in a comprehensible manner so as to
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assist them in understanding the pros and cons of different modes of telephone
services. Consumer Council also suggests that OFTA should closely monitor
the marketing activities of service provider ensuring that they provide correct
information of their service to their customers. Besides, OFTA should
strengthen its capacity to handle complaints against IP telephony service. Some
sort of penalties should be imposed onto the offending service provider.
Similarly, Dr. John Ure suggests that, in the telecom environment that VoIP
will usher in, regulation will have to adapt to the fact that levels of service will
differ, and steps must be taken to keep the public informed of these issues. This
may require information obligations on service providers and safeguards,
including a requirement to offer emergency services.
12. ICC submits that the Government should ensure that VoIP services areopen to provision by all interested service providers and that where licensing
conditions exist, they are objective and non-discriminatory and the criteria for
granting authorization are transparent.
13. HKTUG considers that VoIP opens up a number of issues in exposure
of personal communication to unprotected environment and requires close
examination on the following issues:
o Security - since the caller need to authenticate himself to hisnumber for remote access, there should be a secured way to
protect his authentication pin from being exposed.
o Since the voice call conducts over a shared network, the service
provider should specify a reasonable means to protect exposure
of the conversation.
o If a VoIP service deliver over a segregated network vendor, there
is no formalities to govern end to end service level and end users
will eventually suffers. This issue will be further complicated ifthe network vendor provided similar and competitive service.
o The service providers should provide a means for the police to
track down a caller should the call originated through VoIP into
999. This issue will be complicated due to segregation between
network provider and service provider.
14. Ms. Chan suggests that issues like (a) spamming of programmed
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voice advertisement, (b) security of voice information over the packet-switched
network and (c) how to maintain a fair market for the network operators should
also be considered when formulating the policy framework. Besides, Ms. Chan
also proposes that OFTA should help shape the new technology in considering
that a majority of the general public do not have the knowledge in deciding
which technology best suit their needs and that the conduct of some of the
operators or individual staff may mislead the public and create confusion and
unhappy experience. Similarly, Dr. John Ure considers that an IP networked
telecom world will raise many potential issues such as the threat of viruses, the
need to map telephone numbers onto IPv6, the demand by consumers to use the
same number for multiple access devices and by implication the convergence
of fixed and mobile services. Dr. John Ure suggests that it would be helpful for
OFTA to map out some of these issues for industry discussion and publicinformation.
(A) Policy and licensing
Policy
18(a) Do you agree with our proposed approach that the minimum and
proportionate regulation should be applied to IP Telephony services?
15. There are 22 respondents submitting views on this question, including
NWT, CM Tel, Peoples, HKCTV, PCCW, HKBN, Pacific Supernet, iBBS,
e-Kong, Microsoft, Systech, CompTIA, ELN, Zone 1511, AT&T, HKISPA,
ETS Society, WTIA, Law Society, ICC, Hon. Sin Chung Kai and Ms. Chan. All
of them unanimously support OFTAs position of applying minimum and
proportionate regulation to IP Telephony services.
16. Specifically, Peoples indicates that regulation should beproportionate
but not necessarily be minimum and considers that "Like services should be
regulated under like conditions". ELN submits that the existing requirement on
access to emergency services should be maintained even though the policy of
minimum regulation is adopted. HKISPA opines that the minimum regulations
should be designed to remove some market or administrative barriers so as to
encourage and facilitate introduction of new services like IP Telephony. Law
Society opines that, if any regulation is to be adopted, there should be a
light-handed approach in relation to the adoption of specific regulation and
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such regulation should focus mainly on consumer protection. Any regulation of
IP Telephony services should be considered in a broader context under the
formulation of a general policy for regulating the offering of
telecommunications services to the public pursuant to section 8(1)(aa) of the
Telecommunications Ordinance (which is yet to commence operation).
18(b) Do you agree that the technology neutrality principle should
continue to be applied to IP Telephony services?
17. A total of 26 respondents including WT&T, CM Tel, Peoples, NWT,
PCCW, SUNDAY, HKBN, SmarTone, CSL, HGC, Pacific Supernet, Zone 1511,
Microsoft, e-Kong, iBBS, ETS Society, HKISPA, Consumer Council, AT&T,
ELN, WTIA, Law Society, HKTUG, ICC, Hon. Sin Chung Kai and Ms. Chanhave submitted views on this question. All, except HKISPA, support that the
technology neutrality principle should continue to be applied to IP Telephony
services. Taking into account that IP Telephony is in essence a fundamentally
different service when compared with traditional voice services and that
consumers are well aware that their IP phone would not work if their Internet
connectivity does not function, HKISPA submits that the technology neutral
concept for voice services does not apply.
18. Among the supporting respondents, both the ETS Society and Zone
1511 believes that the technology neutrality principle should continue to be
applied but it should remain subject to review when there are significant
changes or new developments in IP Telephony, such as MMS delivery and
video telephony transmission. SUNDAY submits that mobile operators should
also be permitted to provide services deploying IP-based technology under
their existing licences
18(c) Do you agree that the market should be left to manage the shape
and the pace of transition of the operating environment? What role should
the regulator play in the transition?
19. Among the 18 respondents who express views on this question, 12 of
them including NWT, PCCW, HKBN, Pacific Supernet, ELN, Zone 1511,
Microsoft, ETS Society, Consumer Council, WTIA, Law Society and Hon. Sin
Chung Kai agree that the market should be left to manage the shape and the
pace of transition of the operating environment. Regarding the first part of the
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question, Ms. Chan has a different view from the above 12 respondents. Ms.
Chan suggests the authority to manage the ultimate shape of the operating
environment rather than freeing its hand and let the market developed by itself.
She considers that, if not doing so, the ultimate shape of the market may be
determined by the industrial giant(s) who may only focus largely on monetary
gain as their ultimate goal. On the other hand, Ms. Chan is concerned that the
general public may not have the technology expertise to decide the best
technology to use. Hence, what the shape of the future telephony will be better
left to the authority to decide. However, Ms. Chan submits that pace at which
the market is transit to the ultimate shape as predicted by the authority should
be left open.
20. Eight of the respondents including NWT, PCCW, HKCTV, ELN,Zone 1511, ETS Society, WTIA and Law Society support that the regulator
should play minimum role in the transition and should not interfere with the
development of the free market unless there is clear market failure and
consumer interest, such as access to emergency or safety, is jeopardized.
Specifically, NWT considers that OFTAs role during the market transition
should be (a) to impose regulation only where there is market failure (economic
regulation) or overriding public interest in regulation to achieve certain social
objectives (social policy regulation); and (b) to ensure regulatory equivalenttreatment across technologies (technology neutrality) and among licensees.
Similar to NWT, PCCW submits that only if there is evidence of consumers
being harmed or anti-competitive practices taking place should the regulator be
justified in stepping in to address economic market failure.
21. Seven respondents including Consumer Council, HKISPA, CM Tel,
Peoples, Pacific Supernet, iBBS and Ms. Chan have some different views on
the role the TA should play in the transition. Consumer Council opines that it is
essential to have clear and unambiguous regulatory rules in order to avoid
causing confusions to consumers and operators when IP-based technology
telephone services are being adopted in the market. The HKISPA believes that
the objective of the regulation should be to enable wide availability of IP
Telephony services in the market to enable customers to make their own
choices in their own paces. In consideration of the significant impact of
telephony service to the community, CM Tel opines that the regulator should
define a set of rules correctly designed to facilitate healthy development of the
telecommunications industry and ensure that there is adequate IP-based
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operating environment. Besides, CM Tel recommends not to adopt laissez-faire
approach to avoid disorder and ill-conditioned over-competition. Peoples
suggests that OFTA should make sure that the consumers are well educated of
the pros and cons of IP Telephony so that they are allowed to make informed
choices. Pacific Supernet opines that OFTA has to set the framework for
licensing, number portability and interconnection between fixed carriers and IP
Telephony providers so that these issues will not be obstacles for IP Telephony
providers. iBBS proposes that the regulator should pay a role of monitoring
fraud or misleading behaviour of service providers. Ms. Chan suggests the
authority to manage the ultimate shape of the operating environment rather than
freeing its hand and let the market develop by itself.
Licensing framework
27(a) Do you consider that the conditions under the current licences for
fixed and mobile carriers should be fully applied to the provision of IP
Telephony services?
22. A total of 24 respondents have submitted views on this question. 9 of
them support while 14 of them do not support the proposal that the conditions
under the current licences for fixed and mobile carriers should be fully appliedto the provision of IP Telephony services. The remaining one respondent does
not provide a direct answer to the question but offer some relevant comments.
23. HGC, CM Tel, PCCW, HKBN, SmarTone, CSL, e-Kong, ICC and
Consumer Council are the 9 respondents who express their support to the
proposal. However, 5 of them consider that such licensing conditions should be
applied to those IP Telephony service provider who would act as a substitute of
the conventional telephone service provider. Specifically, CM Tel considers
that service-based operator with less commitment to the society and less service
reliability, can hardly meet with these social expectations and therefore should
not given the same carrier status.
24. WT&T, Peoples, Pacific Supernet, iBBS, Microsoft, HKISPA, ETS
Society, Zone 1511, CompTIA, ELN, WTIA, Law Society, Hon. Sin Chung
Kai and Ms. Chan are among the 14 respondents who disagree with the
proposed approach. In particular, WTIA considers that TA should create a new
class license for IP Telephony service such that only partial of the conditions
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under the current licenses for fixed and mobile carriers should be applied, like
the case of MVNO. Similarly, Peoples submits that IP Telephony services
should be treated as a different class of services and a different set of licence
conditions should be applied.
25. REACH is the only respondent who does not directly address the
question but offers some other comments. REACH considers that licensing
arrangements (or rather rights under the respective licences) should align with
the service levels provided by respective IP Telephony operators (for example,
numbering rights varying depending upon provision of access to emergency
services).
26. Regarding the TAs view given in paragraph 22 of the consultationpaper, both PCCW and the Law Society consider that it is wrong for OFTA to
suggest that applying a different set of conditions to IP telephony may not
contravene the technology neutral principle. They also opine that it is also
incorrect for OFTA to justify this departure on the basis that VoIP is a new type
of service with new functionalities (e.g. video and multimedia capabilities) not
found in conventional public telephone services. With all due respect, PCCW
considers that OFTAs argument guts the principle of technology neutral
regulation and should not be adopted. The Law Society opines that such newfunctionalities can in fact be provided using copper wires and are being so
provided by fixed carrier licensees (the conventional public telephone service
providers). The Law Society also considers that the existing licensing regime is
in fact more technology based than function based. In order to maintain a level
playing field it suggests that the same conditions should be applied to fixed
carrier licensees when they provide IP Telephony if OFTA decides to apply a
set of conditions to IP Telephony based on its functionalities.
27(b) If the answer to the above question is no, do you agree that an IP
Telephony service intended to be used as a substitute for the conventional
public telephone service should be required to meet a minimum set of
conditions?
27. There are 17 respondents submitting views on this question. 9 of them
including CM Tel, Peoples, Zone 1511, Pacific Supernet, ETS Society,
HKISPA, Consumer Council, WTIA and the Law Society are supportive of the
position that an IP Telephony service intended to be a substitute for the
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conventional public telephone service should be required to meet a minimum
set of conditions
28. While supporting the proposed approach, Consumer Council
considers that the minimum regulation should include access to emergency
service and backup power supply. Zone 1511 considers that the minimum set of
conditions should cover provision of numbers, any-to-any connection, payment
for local interconnection charge, etc. while the ETS Society recommends that
access to emergency services, number portability, directory enquiry capabilities,
and any-to-any access should be the minimum regulatory requirements.
29. WT&T, REACH, PCCW, SUNDAY, e-Kong and ELN are the 6
respondents who disagree with the proposal and share similar views thatregulatory requirements comparable to those of Fixed Carrier or FTNS licence
should be imposed to the IP Telephony service intended to be substitute for the
conventional public telephone service to protect consumers interests and avoid
consumers being misled. Specifically, REACH submits that regulation should
not unreasonably exempt services provided by one means of technology from
such obligations if similar services provided by another technology still carry
these obligations. ELN considers that the VoIP service should have to meet the
same conditions that are imposed to the FTNS operators if the service isintended to actually replace the PSTN. PCCW is of the view that the minimum
set of conditions for VoIP services intended as substitutes for conventional
public telephone services and enjoying the rights of an FTNS licence should be
the General Conditions already specified in the existing FTNS licence, the
Ordinance and TA Statements, including GC 10 (backup power facilities), GC
13 (Interconnection requirement), GC 14 (Number portability), GC 25
(Directory enquiry service) and 26 Access to emergency services)
30. Microsoft and Ms. Chan offer some other views instead of giving a
definite answer to the question. Microsoft considers that the imposition of
required features and other regulatory obligations in these circumstances would
discourage the launch of new voice services and therefore limit the choices
available to consumers. Nevertheless, Microsoft agrees with OFTAs proposal
given in paragraph 25 of the Consultation paper that it may be useful to have a
mechanism, such as a formal declaration or a recognised logo, whereby
consumers could quickly and easily tell whether a service provider has chosen
to implement a service that offers a particular set of capabilities. Ms. Chan
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considers that whether the new technology can substitute the conventional
technology should leave to the consumer market to decide and she believes that
IP Telephony cannot be a 100 % substitute to the conventional carrier. In this
regard, she does not offer any reply to the question, which has assumed that IP
Telephony service can be a substitute for the conventional telephone service.
27(c) What are the criteria for classifying an IP Telephony service as one
intended to be used a substitute for the conventional public telephone
service?
31. A total of 10 respondents offer views on the criteria for classifying an
IP Telephony service as one intended to be used a substitute for the
conventional public telephone service. They include PCCW, HKBN, NWT, CMTel, Peoples, ELN, ETS Society, HKISPA, the Law Society and Ms. Chan.
32. Specifically, PCCW considers that a VoIP service should be regarded
as qualifying for treatment as a substitute for conventional public telephone
services if, as a minimum, it offers the same level of functionality as
circuit-switched voice services and satisfies all the requirements of the FTNS
licence. In particular, all social welfare requirements stipulated under the FTNS
licence and the Ordinance must be met.
33. After consolidating the various views of the respondents, the proposed
criteria can be summed up as follows:
(1) Any-to-any connectivity,
(2) Access to emergency services,
(3) Directory enquiry services.
(4) Number portability
(5) Good, efficient and continuous service in a manner satisfactory to the TA
(6) Service agreement in place to ensure appropriate level of QoS
(7) Allocation of number blocks
(8) Local battery backup
(9) Location information
(10) Low cost terminal
(11) Voice conferencing capability
(12) Normal telephone numbers
34. The Law Society does not offer any proposal on the criteria but
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considers it is inappropriate to attempt to distinguish IP Telephony services
which are intended to be used as a substitute for conventional public telephone
services and those which are not and attempt to introduce different sets of
regulations for the following reasons: (1) Any distinction is likely to be very
controversial and will make the regulatory regime unnecessarily complex. (2)
Users choices and preferences regarding how different services are to be used
should not be pre-empted, especially as they change from time to time. (3) The
underlying assumption in the Consultation Paper that people rely on PSTN (and
therefore FTNS) as their basic telephone is gradually becoming untenable, as
more and more households cease to subscribe to FTNS and switch to mobile
services. As long as Users understand the differences between the services
they should be allowed to make an educated choice.
27(d) Do you consider that a new type of licence needs to be created for
regulating IP Telephony services which are intended to be a substitute for the
conventional public telephone service?
35. There are 11 submissions to this question. NWT, Peoples and Ms.
Chan supports that a new type of licence needs to be created for regulating IP
Telephony services which are intended to be a substitute for the conventional
public telephone service while PCCW, HKBN, CM Tel, e-Kong, ETS Society,HKISPA and ELN disagree.
36. CM Tel and e-Kong share the same view that it would be more logical
and appropriate to modify the existing FTNS/Fixed Carrier License to suit the
new operating environment so that operators who intend to adopt the new
technologies are placed in a level playing ground. Both ETS Society, HKISPA,
PCCW and ELN considers that the same regulations currently imposed to FTNS /
Fixed Carrier licensees should apply if the new service is intended to replace
the conventional public telephone service. However, HKISPA opines that IP
Telephony is a different class of service and should not be collectively treated
as substitutes for traditional voice services at the regulatory level unless it is
advertised or marketed as traditional telephony service and consumer is not
aware that it is indeed IP telephony. HKBN submits that any regulatory
arrangements should focus on the nature of services rather than on the
technology used to provide the services. HKBN believes that this would
signal a departure from the "technology neutrality" principle if a new set of
rules/license conditions be imposed just because IP technology is used by
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operators.
37. Pacific Supernet does not reply the question but simply opines that
service conditions such as number portability should be optional.
27(e) Do you agree that minimal regulation should be applied to IP
Telephony services not intended to be used as a substitute for the
conventional public telephone service?
38. Seventeen respondents including PCCW, NWT, WT&T, SmarTone,
CSL, CM Tel, Peoples, ETS Society, HKISPA, the Law Society, ICC, WTIA,
Pacific Supernet, Zone 1511, ELN, Hon. Sin Chung Kai and Ms. Chan express
their views on this issue. All the respondents except NWT, Peoples, PacificSupernet, Hon. Sin Chung Kai and Ms. Chan are supportive of the position that
minimal regulation should be applied to IP Telephony services not intended to
be used as a substitute for the conventional public telephone service.
39. While WT&T supports the proposal, it emphasizes that there must be
clear declaration in all relevant marketing or sales communication materials of
such IP Telephony services indicating the weakness and strengths of the
services so as to protect consumers interests. CM Tel believes that minimalregulation should address requirements from both sides, i.e. operating
environment and social objectives. CM Tel opposes to an IP Telephony service
that is labelled as service not intended to be used as a substitute for the
conventional public telephone service and so is allowed to escape from
fulfilling several basic requirements of a public telephone service.
40. NWT and Hon. Sin Chung Kai share the same view that IP Telephony
services should generally be not subject to regulation and let the market or
service providers to determine the quality standards, service features and price.
Hon. Sin Chung Kai opines that OFTA should request the service providers to
communicate correct information to the consumers and clearly describe the
capabilities and limitations of their service. He considers that OFTA should set
up licensing requirement to regulate the conduct of IP Telephony service
providers in marketing their services. Peoples suggests that such service can be
treated as an ordinary Internet application where the service providers cannot
enjoy the rights of FTNS operators such as allocation of number block and
any-to-any connectivity. Ms. Chan opines that regulation applied should be
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appropriate in which the regulations should not hinder the development or
enhancement of new technology while maintaining a fair and competitive
market and providing sufficient consumer protection for the public. Pacific
Supernet recommends that OFTA should amend the existing ISP PNETS
license to include IP Telephony as soon as possible and the license obligations
should be light, similar to other value added service licence such as ETS or
IVAN licenses.
Separation of service provision from network operation
34(a) Do you agree that the provision of IP Telephony service accessible
over the broadband connections provided by others should be permitted?
41. A total of 22 respondents express their views on this issue including
PCCW, HKBN, WT&T, CM Tel, Peoples, SmarTone, REACH, HKCTV,
CompTIA, ELN, Zone1511, Pacific Supernet, e-Kong, iBBS, Microsoft, AT&T,
ETS Society, HKISPA, WTIA, HKTUG, Consumer Council and Ms. Chan. In
general, all of them are supportive of the position that provision of IP
Telephony service accessible over the broadband connections provided by
others should be permitted.
42. Nevertheless, regarding the TAs view given in paragraph 31 on
whether the network operator should be allowed to levy charge on the IP
Telephony service provider, there are two camps of views. The network
operators such as PCCW, WT&T, CM Tel, Peoples, REACH and HKCTV
generally support that the IP Telephony service providers should be subject to
some conditions in the provision of their services. WT&T considers regulatory
framework must necessarily recognize the differentiation of service provision
and network operation so that service providers who do not invest in network
infrastructure do not take a free ride of others investments. Such differentiation
is also necessary so as to encourage continual investment in infrastructure.
REACH considers that some sort of charge should be levied on the IP
Telephony service provider while HKCTV submits that the TA should require a
service provider to enter into an agreement with a network operator to lease the
latters bandwidth. Furthermore, HKCTV opines that the customer of the
broadband connection has paid for the connection for selected purposes only
and the fee he has paid does not cover the service for IP telephony. Peoples
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supports the proposal on the condition that an agreement of a "managed
network" is in place to ensure an appropriate level of QoS that will satisfy
customer expectation. PCCW submits that the provision of VoIP services over
the broadband Internet service provided by another operator should be
permissible but should be subject to commercial arrangements being made
between the VoIP service provider and the broadband service provider. The
relationship between the ISP and its customer is contractual and driven by
market forces.
43. The other respondents are supportive of the proposal unconditionally.
In particular, HKBN, CompTIA and AT&T expressly supports the TAs view
that VoIP carried over existing broadband lines should not attract additional
charges as the subscriber has already paid for the bandwidth being utilized.They consider that the subscriber is merely sending additional packets of
information on the service already being subscribed to, and therefore already
paid for. CompTIA considers that all current fixed line providers will benefit
from the infrastructure improvements that will be required to ensure ubiquitous
broadband service because VoIP penetration drives broadband adoption, which
in turn promotes broadband deployment and thus achieves a win-win scenario.
34(b) How should consumer interest be protected in the provision of IPTelephony services accessible over broadband connections provided by other
operators?
44. There are 12 respondents submitting views on this issue including
PCCW, WT&T, CM Tel, Peoples, Pacific Supernet, ETS Society, HKISPA,
WTIA, Zone 1511, AT&T, ELN and Ms. Chan. The views submitted are quite
diversified.
45. WT&T indicates that IP Telephony services may be classified into
Tier-1 service type and Tier-2 service type depending on the means and forms
they are being delivered to the end customer such as endto-end managed
network or third party uncontrolled network. To promote transparency and to
avoid confusion to end customers, regulations should be formulated to provide
clear distinction between the 2 classes of IP Telephony services as identified
above. This should be achieved by requiring the IP telephony service providers
to self-declare to which tier they belong and clearly advertise the level of their
services in all their sales and marketing communications materials.
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Additionally, the TA should consider adopting a quality mark/label system for
service providers for identification purposes.
46. CM Tel, ETS Society and Zone 1511 believe that consumer interest
protection may be well addressed through education to consumer on choice of
broadband service providers. Additionally, CM Tel considers that the TA should
also request service providers (including providers of broadband connection
services and IP Telephony services) to provide customer charter to address QoS.
CM Tel considers that the consultation paper of Providing Quality of Service
Information to Consumers of Public Telecommunications Services dated 23
July 2004 is a good start.
47. Peoples, PCCW, AT&T and ELN share similar views that theconsumers should be well informed of the difference of the capabilities and
limitations of different IP Telephony services such as that provided over a
"managed network" or that provided over the Internet by "best effort". In
addition, ELN considers that guarantees of accessibility, access to emergency
services, power failure operation and etc. should all be highlighted. PCCW
suggests that penalties should be imposed if service providers are found to be
representing their VAS service as a direct substitute for conventional voice
services. Regarding its proposed 2-Tier service regime, PCCW suggests that, inrelation to Tier 2 VoIP services, consumer interests will be protected in several
ways. Firstly, distinct numbers will be allocated to these VAS suppliers of
VoIP services. Secondly, number porting will be limited to help ensure that
users are neither confused nor misled by what Tier 2 VoIP service is and is not.
Thirdly, market forces (over time) will encourage Tier 2 VoIP service providers
to improve their services to obtain Tier 1 status. Lastly, consumer interests
will be safeguarded via a comprehensive and substantial consumer education
process
48. WTIA considers that the TA should consider extending the coverage
of the Consultation Paper entitled Partial Commencement of Section 8(1)(aa)
of the Telecommunications Ordinance and Creation of a Class License to
Regulate Resale of Telecommunications Services issued on October 15 2004
so that all the Resellers and/or Distributors within HK of any local or overseas
IP Telephony services should also require a class license.
49. HKISPA considers that protection of consumer interest is not a
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concern as the consumers have got used to the separation of network
connectivity and service delivery in the IDD and dialup Internet services,
which have been proven practical and successful over the years. In the light of
such customer experience, HKISPA believes that provision of IP Telephony
service in a similar manner shall suffice to protect consumer interests. Similarly,
Pacific Supernet considers that consumer interest protection should not be an
issue as long as consumer is aware that they are using IP Telephony service
over broadband connection provided by other operators.
50. Instead of advising how to protect consumer interests, Ms. Chan
considers that (a) charging scheme, (b) QoS, (c) maintenance of a free and fair
market for the service-providers and (d) personal data privacy are customer
interests to be protected and requests the TA to consider.
Provision by service-based operators
39 Do you consider that service-based operators (i.e. PNETS licensees)
should be allowed to offer local voice telephony services using IP technology?
51. Among the 19 respondents expressing views on this question, 15 of
them including NWT, PCCW, HKBN, SUNDAY, Pacific Supernet, iBBS,e-Kong, ETS Society, HKISPA, Consumer Council, CompTIA, ELN, Zone
1511,, AT&T and Hon. Sin Chung Kai are supportive of the proposal that
service-based operators (i.e. PNETS licensees) should be allowed to offer local
voice telephony services using IP technology.
52. Although they generally support the proposal, some respondents have
further comments on the question.NWT considers that the PNETS licence can
be modified to allow non-facilities based service providers to provide IP
Telephony services in Hong Kong. ELN submits that there should be some
contribution levies in order to make the competitive landscape level and fair to all
operators. Consumer Council supports the policy of allowing service-based
Public Non-Exclusive Telecommunications Service (PNETS) Licence holders
to use IP Telephony technology to provide international call services but opined
that opening the local voice services market to these service operators at this
stage could hinder the infrastructure investment and the IP Telephony service
development, ultimately affecting the choices of consumers in the future.
Regarding paragraph 36 of the Consultation Paper, HKISPA disagrees with the
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argument that this new service is diverting revenue from fixed network
operators and discourages investment in network construction. Instead,
HKISPA believe introduction of IP Telephony and other new services through
the Internet Protocol would create demand for the local network and that is
itself an incentive for investments into the network, as evident from the revenue
volume that ISPs pay for local access provided by existing FTNS service
providers. PCCW proposes that there must be a separate class of service (i.e.
Tier 2) to those offered by FTNS licence-holders which fully satisfy the FTNS
licence requirements (i.e. Tier 1), with different rights and obligations. This
regulatory framework is somewhat the same, in principle, as the current
licensing regime for 3G mobile services, where Mobile Virtual Network
Operators are able to offer 3G services without acquiring a 3G licence.
53. CM Tel, WTIA, Peoples and Ms. Chan offer other views on this
question. CM Tel submits that the current PNETS license is not designed by its
nature for operation of local voice telephony services. CM Tel agrees that some
extent of flexibility can be allowed for IP Telephony service in the
consideration of additional and more advanced and distinctive functionalities
available on IP Telephony service such as the mobility via Internet access. To
this end, several current requirements like access to emergency services,
backup power supply, quality of service, etc. need to be reviewed to correctlyrespond to the new market situation, so as not to obstruct the adoption of new
technologies. WTIA opines that the TA should issue a new class license for IP
Telephony Services Providers and suggests that, once the PNETS licensees
offer IP Telephony services that need any local or overseas PSTN
interconnection or ordinary telephone numbers, then they should apply for this
new class license. Ms. Chan shares the same view of WTIA that we need to
have additional clause or annex or even a separate license to be issued for the
IP Telephony operators. Peoples submits that IP Telephony as a substitute for
the conventional public telephone service should only be allowed when the
service provider has established agreement for "managed network" with
network operator.
(B) Numbering Issues
Conformance to numbering plan
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50(a) Should the traditional PSTN services and IP Telephony services
which are intended to be a substitute for the conventional public telephone
service share the same number blocks?
54. The submitted views on this issue are quite diversified. Among the 25
respondents, 17 of them including PCCW, HKBN, HGC, CM Tel, SUNDAY,
SmarTone, CSL, HKISPA, ETS Society, e-Kong, Pacific Supernet, ELN, AT&T,
ICC, WTIA, HKTUG and Ms. Chan are supportive of the proposal that
traditional PSTN services and IP Telephony services intended to be a substitute
for the conventional public telephone service should share the same number
blocks. 8 respondents including NWT, WT&T, REACH, Peoples, CompTIA,
Zone 1511, Consumer Council and Hon. Sin Chung Kai disagree with the
proposal.
55. Among the respondents who do not support the proposal, the network
operators NWT, WT&T and REACH submit the only fixed network licensee
should be permitted to use 8-digit fixed line numbers for IP Telephony services
as this is consistent with the Hong Kong Numbering Plan. Peoples believes that
these two types of services should not share the same number blocks and
porting between them should not be allowed until 2-3 years later when the
consumers become fully familiar with IP Telephony. CompTIA submits that anon-geographic number may be desirable in considering that VoIP is
independent of any physical location. Hon. Sin Chung Kai, Zone 1511 and
Consumer Council submit that separate 8-digit number blocks should be
allocated to help discriminate IP Telephony from conventional telephone
service.
50(b) Should IP Telephony services which are not intended to be a
substitute for the conventional public telephone service be allocated with
special number blocks or the normal numbers for conventional local fixed
line telephone?
56. The submitted views on this issue are quite diversified. Among the 24
respondents, 9 of them are supportive of the allocation of special number
blocks (i.e. prefix + subscriber number) to IP Telephony services not intended
to be a substitute for the conventional public telephone service, 9 respondents
are supportive of allocating 8-digit telephone numbers and two suggest no
number allocation at all. The other 4 have some other comments.
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57. The 9 respondents who support special number block allocation
include PCCW, HGC, NWT, WT&T, REACH, ELN, AT&T, ETS Society and
Ms. Chan. While supporting the option of special number block allocation,
AT&T put forward another proposal of establishing a new number block (i.e.,
called non-geographic numbers in many geographically larger jurisdictions)
for IP Telephony, particularly if this will create efficiencies that improve the
ability of new IP Telephony providers to obtain and use number resources. ELN
submits that special numbers/email-addresses should be allocated if they will
be part of the current VoIP island but normal numbers should be allocated if
the IP Telephony service will be transparently accessible from the PSTN.
58. Among the 9 respondents who support 8-digit number allocation,some of them suggest that the existing 8-digit telephone numbers of prefix 2 &
3 and separate 8-digit numbering blocks in the existing numbering plan (e.g.
38XX-XXXX, 39XX-XXXX) should be allocated for the IP Telephony service
in question. Some of them such as CSL, Pacific Supernet, Consumer Council
and Hon. Sin Chung Kai opines that separate 8-digit number blocks should be
allocated to help discriminate IP Telephony from conventional telephone
service while some of them such as HKBN, SmarTone, and HKTUG consider
that the existing 8-digit numbering resources for conventional telephoneservices are more appropriate. In particular, HKTUG indicates that business
user is concerned with the potential issue of number range changes especially
quite a number of business operation and information flow rely on automated
dialer (e.g. telemarketing, banking, financial market information distribution
and etc. ) will be affected.
59. ICC and iBBS submit that both geographical and non-geographical
numbers may be appropriate for VoIP services. SUNDAY opines that IP
Telephony service providers should be allowed to apply for numbers from
OFTA or they may collaborate with fixed carriers or mobile carriers and obtain
numbers from them. This concept is analogous to MVNOs numbering
arrangements. SUNDAY considers that the number range and format as well as
number portability issues should be further discussed by the industry under the
Numbering Advisory Committee (NAC) for the purpose of settling the
implementation plans and related issues. WTIA considers that IP Telephony
services provider can allocate numbers that are not associated with a telephony
service, a provider can allocate numbers that are not associated with a
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telephony service at fixed locations such as mobile or personal numbers.
60. CM Tel and Peoples are the two respondents suggesting not to
allocate telephone numbers to the IP Telephony service provider not intended to
be a substitute for the conventional public telephone service.
50(c) If IP Telephony services are allocated with special number blocks,
should all or only certain types of IP Telephony services be allocated with the
special number blocks?
61. There are 12 respondents to this question and the views are diversified.
Three respondents including NWT, WTIA and Ms. Chan support that all types
of IP Telephony services be allocated with the special number blocks.
62. PCCW, WT&T, Peoples, ETS Society consider that only IP Telephony
service not intended to be substitute of conventional telephone service should
be allocated with special number blocks.
63. ELN opines that a normal number should be allocated if the IP phone
is callable from the PSTN. CM Tel objects allocation of special number
blocks to IP Telephony services of any kind, CM Tel considers that it is notjustifiable for those arguments of using special number blocks to distinguish IP
Telephony services from conventional public telephone service. Consumer
Council and Pacific Supernet supports the allocation of a special number block
with 8 digits to both carrier operators and IP Telephony service providers and
considers that this would facilitate number portability and make it easier for
consumers to switch to IP Telephony if they prefer. CLS submits that, before
creating a whole new category of numbers (i.e. prefixed long-form numbers)
which may cause confusion to the general public, OFTA should assess the
likely growth in IP Telephony services, whether telephone numbers longer than
8 digits are required at this point in time and if not, when that need may arise.
50(d) How should the numbering resource challenge arising from the
proliferation of IP Telephony services be tackled?
64. A total of 10 respondents have expressed their views on this question.
CM Tel submits that, at the current stage, it would be too early to worry of
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numbering resource challenge arising from the proliferation of IP Telephony
services. The consumption of numbering resource for IP Telephony services
will depend on further development of telecommunications market, which will
be affected by various factors such as economic climate, regulation design,
technology advancement, change in consumers perception, and also flow
between IP Telephony services and conventional public telephone service. CM
Tel suggests an allowance of close observation of 12 months on the usage of
existing numbers, before we can make a meaningful improvement of the
existing numbering plan. Similarly, CSL also considers that it is too early to
foresee the demand for IP Telephony services and it is premature for OFTA to
conclude that 8-digit numbers cannot be allocated to different types of IP
Telephony services. CSL adds that the role of OFTA should be to ensure there
is sufficient flexibility in the Numbering Plan to cope with growth in demandfor services and changes in consumer need. Pacific Supernet submits that,
instead of going to a new prefix with additional digits for IP Telephony, we
should allow the numbering plan to be expanded on an as required basis.
65. Peoples and WTIA share the view that number blocks should be
allocated in small range (i.e. 1000) and the applicant has to reach high
utilization (say 90%) of the allocated number blocks before new blocks are
allocated.
66. PCCW suggests that the length of the existing 8-digit telephone
number be extended to accommodate IP Telephony services, such that an
additional prefix needs to be dialed in order to reach the VoIP service subscriber.
This special prefix could also serve to earmark the service as a Tier 2 VoIP
service. ELN and ETS Society share similar view with PCCW. ELN suggests
adding digits or expanding the number space while the ETS Society considers
that the options could be (a) adding another digit to the normal number blocks;
or (b) assigning a prefix as access code for the IP Telephony services.
67. SmarTone is of the view that the pressure on numbering resource
could be relieved if both mobile number ranges and dedicated access codes are
allowed for use by Non-Substituting IP Telephony Services. The spare number
level 5X can also be used for IP Telephony services. Furthermore, the number
level 7X can also be used for IP Telephony services provided that the remaining
numbers under number level 8X can be released for mobile usage. Similarly,
WTIA also propose allocating the numbering block with prefix 7 and 8,
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which are originally allocated for public paging and personal numbering
services, for IP Telephony services as the consumer in HK already perceived
and accepted the mobility characteristic of using pager and personal numbers.
68. It is HKISPAs opinion that the introduction of new services like
ENUM and convergence of voice services with the Internet is the trend. The
potential stress on existing numbering resource by the introduction of IP
Telephony is not short term, and should be considered together with the new
and evolving communication technologies and their associated
naming/numbering plans.
Number portability
53(a) Should the requirements of number portability be applied to IP
Telephony services intended to be a substitute for the conventional public
telephone service?
69. 15 out of the 18 respondents submitting views on this question
support that the requirements of number portability should be applied to IP
Telephony services intended to be a substitute for the conventional public
telephone service. The respondents who are supportive of the position includePCCW, HKBN, REACH, CM Tel, SmarTone, CSL, Peoples, e-Kong, Pacific
Supernet, CompTIA, ELN, WTIA, ETS Society, HKISPA and Consumer
Council.
70. While supporting the proposal, HKISPA considers that OFTA should
mandate for one fixed network telephone service provider to operate as a
gateway for IP Telephony providers to facilitate full call delivery and number
portability between IP Telephony network and fixed network. Peoples suggests
that the number portability requirement should be imposed to the relevant IP
Telephony service providers after a transition period of 2-3 years. PCCW
considers that number portability is a right rather than an obligation. As such
only the VoIP service which meets all the conditions of the FTNS licence,
satisfies the requirements of the Ordinance and TA Statements, and complies
with market best practice (and hence is substitutable with the existing fixed line
voice services in terms of functionality) should be entitled to number
portability.
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71. Ms. Chan holds a different view. In considering that IP Telephony is
new to the market, Ms. Chan suggests that number portability service should
not be a mandatory requirement and thinks that this may help simplifying the
initial introduction of the new technology. iBBS considers that the IP
Telephony number issue can be addressed by ENUM implementation and urges
OFTA to speed up the process in this area instead. SUNDAY submits that
number portability issues should be further discussed by the industry under the
Numbering Advisory Committee (NAC) for the purpose of settling the
implementation plans and related issues
53(b) Is number portability necessary for IP Telephony services not
intended to be a substitute for the conventional public telephone service?
72. There are 19 respondents submitting views on this question. Four of
them including HKBN, e-Kong, Consumer Council and HKISPA support that
number portability is necessary for IP Telephony services not intended to be a
substitute for the conventional public telephone service
73. Ten respondents including PCCW, HGC, NWT, REACH, Peoples,
SmarTone, CSL, Pacific Supernet, AT&T and ELN consider that it is not
appropriate to mandate number portability requirement at this nascent stage.
74. The other respondents have different views. The ETS Society and
Zone 1511 share the view that it would be optimal for the IP Telephony service
operators to decide whether to entertain this requirement, when offering
complementary services. CM Tel considers that such services should not be
classified as public telecommunications service and therefore they are not the
subject matter of this Consultation Paper. WTIA suggest that the TA should
consider to combine the Number Portability and the Dipping Databases on
mobile and fixed networks so that number portability among different type of
services can be implemented. SUNDAY proposes that number portability
issues should be further discussed by the industry under the Numbering
Advisory Committee (NAC) for the purpose of settling the implementation
plans and related issues
(C) Interconnection and charge settlement
Any-to-any connectivity
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58(a) Should any-to-any connectivity principle be adopted for IP Telephony
services intended to be a substitute for the conventional public telephone
service?
75. There are 15 respondents submitting views on this question. 14 of
them agree that any-to-any connectivity principle should be adopted for IP
Telephony services intended to be a substitute for the conventional public
telephone service. They include PCCW, HGC, REACH, CM Tel, Peoples,
SmarTone, CSL, SUNDAY, Pacific Supernet, ELN, WTIA, ETS Society,
HKISPA and Ms. Chan.
76. iBBS is the only respondent objecting to the proposal. iBBS submitsthat OFTA should play a role in speeding up the ENUM implementation.
58(b) Is any-to-any connectivity necessary for IP Telephony services not
intended to be a substitute for the conventional public telephone service?
77. There are 14 respondents submitting views on this question. They
include PCCW, HKBN, HGC, CM Tel, REACH, Peoples, SmarTone, CSL,
ETS Society, HKISPA, ELN, iBBS, WTIA and Ms. Chan With the exception ofHKISPA and WTIA, all of them consider that any-to-any connectivity is not
necessary for IP Telephony services not intended to be a substitute for the
conventional public telephone service.
78. Specifically, REACH considers that interconnection rights should be
reserved for those FTNS operators with an obligation to enable any-to-any
interconnection until an interconnection review on network configurations and
associated charging arrangements is conducted and completed. During the
transition, non-FTNS IP Telephony operators who do not provide access to
emergency services should not enjoy interconnection rights but obtain such
interconnection through commercial negotiation. Similarly, PCCW submits that
such a requirement should be optional and the service provider concerned has
to reach a commercial agreement with a FTNS operator if it wants to have
any-to-any connectivity. The ETS Society and Ms. Chan believe that it should
be up to the IP Telephony service operators to decide on the kind of
connectivity they would like to offer to the market. HGC is concerned that,
even subject to commercial agreement, a sudden surge in the number of
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operators requesting interconnection can be very disruptive to the market and
proposes that a more efficient way of going about it would be to make it a
licence condition that the said IP Telephony service providers can only obtain
interconnection via hosting connection with one of the FTNS operators.
79. Nevertheless, HKISPA strongly advocates that any-to-any capability
should be adopted for IP telephony no matter whether it is marketed as a
substitute for traditional telephony service under the conditions of traditional
voice services or as a new class of service. HKISPA considers that this will
benefit the consumers most and offer them full flexibility. WTIA considers that
the TA should encourage innovation in the provision of any new
telecommunications services and any-to-any connectivity should be necessary
for IP Telephony services no matter whether the service is intended to be asubstitute for the conventional telephone service.
Interconnection between operators
63(a) Should we extend our existing interconnection regime to IP
Telephony services?
80. There are 17 respondents submitting views on this question. 8 of themagree that we should extend our existing interconnection regime to IP
Telephony services. They include CM Tel, ETS Society, HKISPA, AT&T, ELN,
e-Kong, WTIA and Ms. Chan.
81. Among the respondents who support the proposal, ETS Society and
HKISPA have some further views. ETS Society believes that we should extend
our existing interconnection regime to IP Telephony service if it is intended to
be a substitute for the conventional public telephone service. For IP Telephony
Services not supplied as a substitute, it should depend on commercial
circumstances and the kind of services to be introduced to decide on the
interconnection arrangements. HKISPA advocates that OFTA should mandate
one FTNS service provider to act as a gateway between PSTN and IP
Telephony for call deliveries and number portability. HKISPA considers that
this is a necessary step to enable healthy IP Telephony market competition,
shorten the time-to-market of the service and help speed up the IP Telephony
service adoption in Hong Kong, which is lagging way behind other countries.
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82. NWT, Peoples, SmarTone, HGC and iBBS are the 5 respondents who
hold opposite views. NWT opines that IP Telephony service providers do not
have rights of interconnection and should enter into commercial arrangement
with a fixed network licensee for access to the PSTN in order to terminate and
receive calls on the PSTN. Peoples considers that we should not extend our
existing interconnection regime to IP Telephony services in considering the
existing interconnection regimes has created a number of market distortions
between fixed network services, mobile network services and external
telecommunications services in the past 8 years. With the emergence of IP
Telephony service, Peoples urges the TA to carry out a thorough review of the
existing interconnection regimes. SmarTone considers that the proliferation of
IP Telephony services renders the need to review the interconnection charging
regime. And submits that it is an appropriate time to rectify the imbalance inthe fixed/mobile interconnection regime which has been strongly in favour of
the FTNS operators/fixed carriers.
83. PCCW, HKBN, SUNDAY and Pacific Supernet do not directly
address the question but offer some relevant comments. PCCW submits that
interconnection rights should be extended to VoIP service providers who are
FTNS licensees or have a carrier status while VoIP service providers offering
service under a PNETS licence should not be entitled to FTNS interconnectionrights. HKBN submits that, as long as the IP based network of each operator
may interconnect with each other directly without the need to transit through
the PSTN, it is not necessary to extend the PSTN interconnection regime to IP
Telephony for which the light-handed regulatory regime is devised.
SUNDAY submits that the interconnection principles and methodology should
be completely reformed with a view to accomplishing the objectives of (a)
establishing the calling party pays principle which is able to remove the
historically unequal and imbalanced phenomenon in the interconnection
markets and (b) setting a benchmark rate for each type of interconnection
charges so that the rates will prevail if commercial negotiation fails. Pacific
Supernet considers that the existing interconnection regime is too complex and
time consuming to new service entrants and suggests that one fixed carrier
should be mandated to act as a gateway for connection between IP Telephony
provider and the PSTN while other fixed carriers can voluntarily provide
similar services on a commercial basis.
63(b) Should we prescribe technical standards for network-to-network
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interconnection and user-to-network interface of IP-based technologies or
should we simply allow the market to evolve and determine the standards
itself?
84. Among the 15 respondents submitting view on this question, 3 of
them including CM Tel, Peoples and Ms. Chan support that OFTA should take
the role to prescribe the technical standard while 9 other respondents including
Zone 1511, ETS Society and HKISPA consider that we should simply allow the
market to evolve and determine the technical standards for network-to-network
interconnection and user-to-network interface of IP-based technologies.
Specifically, PCCW considers that it would be more efficient and appropriate
for technical standards to be defined by the market and that OFTA should not
simply mandate a standard for the industry. Nevertheless, PCCW accepts that itmay be necessary for OFTA to facilitate this process by way of industry
consultation in order to ensure that an agreed set of technical standards are
established as quickly as possible.
85. SmarTone, CSL and ELN do not directly address the question but
offer some other relevant comments. SmarTone submits that the existing
technical standards should be sufficient for the IP Telephony purpose and there
is no need for OFTA to prescribe standards. CSL opines that it is inappropriateto mandate stringent interconnection standards as IP Telephony technology is
still in its infancy. It suggests that OFTA should hold an industry consultation
on the types of standards which may be acceptable for interconnection
determination. ELN may have a different interpretation on the question and
expresses different view. It opines that standards that encourage consistency
and help guarantee universality of connectivity should be aggressively
supported while proprietary standards that favour specific products and services
should be discouraged.
63(c) Is it necessary for OFTA to play a role to facilitate the establishment
and interconnection of E.164 number/IP address databases of IP-based
networks?
86. 15 respondents have submitted views on this question. 9 of them
including CM Tel, PCCW, CSL, Pacific Supernet, HKIRC, ELN, Zone 1511,
ETS Society and Ms. Chan agree that it is necessary for OFTA to play a role to
facilitate the establishment and interconnection of E.164 number/IP address
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databases of IP-based networks. Among them, CSL suggests that OFTA should
also assist the industry to obtain government funding for the initiative. HKIRC
further opines that a standard approach like ENUM should be adopted and
considers that adoption of ENUM by all IP telephony operators will eliminate
the need for them to devise proprietary conversion schemes and number
portability becomes easier.
87. SmarTone and HGC expressly disagree with the proposal where
SmarTone considers that itis not necessary for OFTA to fix the conversion of E.164
with IP address at the moment.
88. Peoples, WTIA, iBBS and HKISPA have some different views on the
question. Peoples submits that the TA must ensure the industry to comply withinternational practice and considers that, under the EU regulatory framework,
some market offerings are excluded from regulatory control (e.g. through a
software on PC, inside a corporation). WTIA, iBBS and HKISPA believe that
OFTA should play a role to facilitate the establishment, standardization and
interconnection of ENUM. WTIA suggests the TA to initial test-bed
implementation for ENUM and co-operate with educational institutes, HKNIC
and interested telecom companies to establish ENUM testing sites in HK.
Calling Line Identification
66 Should operators providing IP Telephony service be obliged to fulfil
the requirements of sending/receiving CLI to and from other fixed network
operators/service providers?
89. Thirteen respondents including PCCW, HKBN, CM Tel, SmarTone,
CSL, Peoples, Pacific Supernet, WTIA, ELN, ETS Society, HKISPA, iBBS and
Ms. Chan have submitted views on this question. Except iBBS and Ms. Chan,
all the respondents agree that operators providing IP Telephony service should
be obliged to fulfil the requirements of sending/receiving CLI to and from other
fixed network operators/service providers
90. Among the respondents who support the proposal, SmarTone and
Pacific Supernet share the view that CLI should only be required for IP
Telephony service that is intended to substitute public telephony services while
it should be optional for IP Telephony service not intended to be substitute of
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conventional telephone service. In contrast, PCCW opines that CLI
requirement should be mandated for IP Telephony services no matter whether it
is intended to be substitute of conventional telephone service. CSL considers
that, if only IP Telephony to IP Telephony calls are being made within the IP domain,
the CLI should not be mandatory as there are currently applications which are buddy
lists, IP addresses or the URL, instead of CLI..
91. Ms. Chan considers that it should not be a mandatory requirement
since it is not the core-functionality of IP Telephony. Ms. Chan expects this
requirement to be fulfilled at a later stage of the new services as an
enhancement or refinement. iBBS may have a different understanding on the
functionality of CLI and opines that it is up to consumer to choose if his/her IP
phone can get the CLI and no obligation should be applied.
Payment of Interconnection charges, LAC and USC
71(a) Do you agree with the above approach on the interconnection
charges between IP-based networks and conventional circuit-switched
networks?
92. A total of 15 respondents have submitted views on this question.PCCW, HGC, NWT, Zone 1511, AT&T, ETS Society and ELN are the 7
respondents supporting OFTAs position on the interconnection charges
between IP-based networks and conventional circuit-switched networks while
HKBN, CM Tel, HKISPA, WTIA, e-Kong and Ms. Chan express disagreement.
The other respondents including Peoples, and Pacific Supernet express some
other views instead of providing a definite answer to the question.
93. Among the objecting respondents, HKISPA considers that the current
PNETS charge regime should not apply to the IP Telephony scenario because it
is unfair to the IP Telephony service provider to pay for calls from both
directions while the PSTN or hosting service provider, if any, is under a mutual
arrangement on interconnection charges with other PSTN operators. HKISPA is
inclined to the idea that the interconnection charge should be zero for IP
Telephony for the following reasons: (i) the nature of interconnection charge is
in the form of call settlement and statistically it should be balanced; (ii) the
interconnection charge discourages origination of calls, so if there is
interconnection charge in place for IP Telephony then users might be
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discouraged from making calls; and (iii) the telecommunications trend is
towards flat rate accounting. HKBN and CM Tel consider that the
interconnection charges in question should not be subject to commercial
agreement and believes that the existing charging principle as in Statement
No.7 should be adopted for IP Telephony services, regardless of the
transmission technology being deployed for voice services. CM Tel further
comments that, for the scenario described in paragraph 69 of the Consultation
Paper, PNETS operators which are allowed to provide IP Telephony service
should not be granted the interconnection right/obligation unless they could
fulfill the minimum regulation to preserve the attainment of certain social
objectives. e-Kong submits that OFTA should set reference rate for each type of
interconnection charges in considering that it would be difficult for the smaller
IP telephony service providers to negotiate with the big players on an equitablebasis. Similar to e-Kong, Ms. Chan suggest that, just like the PNET charge, a
fixed rate charge could be levied by the fixed carriers or the broadband
connection suppliers when the IP Telephony service provider is going to use
their network to provide service.
94. Peoples considers that Paragraph 67 is not always acceptable and
there must be an additional requirement that the IP Telephony behind the media
gateway is operated over a "managed network" if the "Carrier-to-CarrierCharging Principles" for interconnection based on the circuit-switched
technologies is to be applied.
95. In order to expedite interconnection between IP telephony providers
and fixed carriers, Pacific Supernet submits that OFTA should mandate one
fixed carrier as the default gateway between the IP Telephony providers and all
the fixed carriers and regulate the relevant charges. It also proposes that IP
Telephony should pay for traffic originating from their networks and receive
payments for traffic terminating on their networks.
71(b) Do you agree with the above approach on the interconnection
charges between IP-based networks?
96. There are 15 respondents submitting views on this question. 7 of them
including PCCW, HKBN, HGC, CM Tel, AT&T, ETS Society and Zone 1511
support the TAs proposed approach on the interconnection charges between
IP-based networks. In particular, PCCW agrees with OFTAs proposed
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approach on the interconnection charges between IP-based networks but
suggests that OFTA should not seek to regulate the level of charges applicable
to the interconnection in question. HKBN also supports the view that the TA
should not intervene in IP-based interconnection but leaving it to service
operators to conduct and strike their own commercial negotiation arrangements
where required.
97. Five respondents including Pacific Supernet, iBBS, e-Kong, HKISPA
and ELN disagree with the approach. Among these respondents, e-Kong
submits that OFTA should set reference rate for each type of interconnection
charges in considering that it would be difficult for the smaller IP telephony
service providers to negotiate with the big players on an equitable basis.
HKISPA expresses its disagreement with the same view as that given inresponse to Question 71(a) above.
98. Peoples, WTIA and Ms. Chan have some different views. Peoples
considers that the TA should issue specific guidelines under the
Telecommunications Ordinance for the interconnection charges if the
"any-to-any" principle is enforced between IP-based networks. Ms. Chan
expresses the same view as that given in response to Question 71(a) above.
WTIA does not address the question directly but agrees with the TAs viewdiscussed in paragraph 68 and welcomes the TA to intervene or give guidance
when consider necessary.
71(c) Do you agree with the above approach on the interconnection charges
between the IP Telephone service provider and the supplier of the broadband
Internet connection?
99. Among the 22 respondents who have submitted views on this question,
14 of them including HKBN, NWT, CM Tel, SmarTone, Peoples, CompTIA,
ELN, Zone 1511, Pacific Supernet, iBBS, Microsoft, WTIA, AT&T and
HKISPA agree with the TAs proposed approach on the interconnection charges
between the IP Telephone service provider and the supplier of the broadband
Internet connection.
100. Specifically, AT&T, HKISPA and CompTIA expressly support the
TAs view, as given in para. 70(c) of the Consultation Paper that (a) there is nojustification for a broadband connection supplier to ask the IP Telephony
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service provider for an additional payment of interconnection charge for the
conveyance of the IP Telephony traffic over the broadband connection and (b)
there is no justification for the broadband connection supplier to block the IP
Telephony traffic if such payment is not made. HKBN considers that IP
Telephony services operating on the application layer of the broadband
connection should be similar in nature to other Internet peer-to-peer
applications, such as BT, WinMX, ICQ, MSN, Kazaa etc. The subscriber would
have already paid the broadband connection (either the network operator
operating the broadband connection or PNETS licensee) for the access of these
applications and it is therefore not necessary for IP Telephony service providers
to pay any additional interconnection charges. Although it supports the TAs
view, Zone 1511 considers that, if an IP Telephony service provider has
preferred internet service provider and requires a special level of service from
them, there might have interconnection charges, based on the principle that the
originating party pays to the terminating party, and should be subject to
commercial negotiation and arrangement by the related parties.
101. PCCW, WT&T, HGC, HKCTV, ETS Society, HKTUG and Hon. Sin
Chung Kai are the 7 respondents disagreeing with the TAs view. In particular,
PCCW submits that whether or not the ISP acts to charge the VoIP service
provider using its network is a matter for the ISP to determine and the extent of
the usage is irrelevant to the question of whether or not the ISP should be
permitted to charge the VoIP service provider. PCCW opines that these are
purely commercial decisions driven by market forces, business plans, corporatestrategies and revenue estimates. OFTA should not intervene (i.e. engage in
economic regulation) unless an ISPs actions violate Sections 7K, 7L or 7N of
the Ordinance Sin Chung Kai considers that, in order to keep the network
operators incentive for infrastructure investment and promote effective market
competition, any kind of service providers should be subject to interconnection
charge if they are using the network of other providers to offer services. WT&T
objects to the proposal and submits that the TA should implement a user-pay
system under which all IP telephony service providers piggybacking onnetwork operators network for customer access would pay access
fees/interconnection charges to the network operators, where the quantum of
the access fees/interconnection charges should be determined by commercial
arrangements amongst the concerned parties, or failing which by TAs
determination in accordance with established proceeding. HGC considers that
the TAs view appears to contradict the view of the TA in respect of the
interconnection charging arrangements applicable to the International Call
Forwarding Services (ICFS) in which an ICFS provider is required to pay an
access charge to an MNO for making use of the call forwarding service of the
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MNO in the circumstances where the relevant customer of the MNO has,
arguably, already paid for the same call forwarding services. HKCTV submits
that the TA should require a service provider to enter into an agreement with a
network operator to lease the latters bandwidth. Furthermore, HKCTV opines
that the customer of the broadband connection has paid for the connection for
selected purposes only and the fee he has paid does not cover the service for IP
telephony
102. Ms. Chan offers a different view. She suggests that, just like the PNET
charge, a fixed rate charge could be levied by the fixed carriers or the
broadband connection suppliers when the IP Telephony service provider is
going to use their network to provide service.
LAC
78(a) Do you agree that the existing charging principles of LAC should be
continued for interconnection between IP Telephony and circuit-switched
networks?
103. The views on the question are quite diversified. Among the 19
respondents, 7 of them including PCCW, HGC, CM Tel, CSL, ELN, HKTUGand Hon. Sin Chung Kai support the proposed approach that the existing
charging principles of LAC should be continued for interconnection between IP
Telephony and circuit-switched networks.
104. Nine respondents including SmarTone, Peoples, Pacific Supernet,
Zone 1511, ETS Society, iBBS, WTIA, HKDotCom and Ms. Chan disagree
with the proposal. Both Zone1511 and ETS Society share the same view that
LAC is applied to the delivery of external traffic to and from customers in
Hong Kong and IP Telephony services are provided through a local IP network
only. On this basis, they submit that interconnection charge should be applied
instead of LAC. WTIA submits that the charging principle should only be
applied to ETS operators who are using IP technology to deliver international
traffic. WITA further submits that IP Telephony service providers that are
permitted to use telephone numbers with prefix 2, 3 and 8 should be
entitled to levy interconnection charge at the same level as being collected by
FTNS operators and that IP Telephony service providers that are allowed to use
mobile phone numbers of prefix 6 and 9 should be entitled to levy
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interconnection charge at the same level as being collected by MVNO. Pacific
Supernet share the view of WTIA and agrees that IP Telephony provider should
be eligible to receive incoming LAC payment as the IP Telephony provider has
invested money in renting broadband access, buying equipment to provide
traffic termination for its customers
105. As for the other 3 respondents, they do not provide a clear-cut answer
to the question but offer some other relevant comments for our consideration.
NWT considers that OFTA needs to examine LAC arrangements to ensure that
local fixed network operators are adequately compensated for use of the local
loop by IP Telephony service providers. HKISPA believes that IP Telephony
service provider is providing the delivery service on behalf of their customers
and therefore financially and legally entitled to any benefits generated by usingthe circuits they lease from the network operator including receiving LAC
payments from ETS operators. The HKISPA is inclined towards the idea that IP
Telephony service providers should not be subject to any LAC, if consensus
cannot be reached on this point. HKBN believes that, under the technology
neutra