Hong Kong has decided to withdraw the Type II interconnection policy for local fixed line telecommunication services in next four years, in a bid to promote investment and consumer choice in high bandwidth customer-access telecommunication networks.

The withdrawal will be implemented in an orderly manner on a building-by-building basis. It applies to buildings already connected to at least two self-built customer access networks, to ensure consumers continue to have a choice in operators, according to a government press release Tuesday.

Secretary for Commerce, Industry and Technology John Tsang said the government's objectives in deciding to withdraw Type II interconnection were to encourage new investment in advanced telecommunications infrastructure and enhance consumer choice.

"Indeed, Hong Kong is the first and only to withdraw Type II interconnection among the advanced economies," he said.

Tsang said the Government's decision sends a clear signal to operators to invest in advanced networks, and offers them reasonable time to adjust their business strategy and conduct rollout work should they so decide.

He said, in the longer term, the policy withdrawal will encourage new investment in infrastructure, and ultimately offer consumers their choice of telecommunications services delivered through advanced telecommunications infrastructure capable of supporting different forms of innovative services.

"The decision is a proactive, forward-looking and yet pragmatic one which balances the interests of all the stakeholders involved.

It would further the objective for Hong Kong to be a leading digital city with more business opportunities," Tsang said.

The government's decision is to withdraw Type II interconnection, and not extend or expand it as some industry members have suggested, Tsang stressed.

Type II is interconnection to a fixed telecommunications operator's network at the customer access network level, running from local telephone exchanges to customer premises.

Type II interconnection policy was introduced in 1995 when the local fixed telecommunications network market was first liberalized. Since then, competitors to PCCW-HKT had together built networks that have covered some 53 percent of Hong Kong households.

(People's Daily July 7, 2004)