On 7 May 2007, the Office of the Telecommunications Authority ("TA") released draft competition guidelines for further public consultation. Submissions are required to be forwarded to the TA by 6 July 2007.

Full Update

The TA has recently published draft competition guidelines (the "Draft Guidelines") to assist telecommunications licensees to comply with their obligations under the Telecommunications Ordinance (Cap.106). The Draft Guidelines outline how the TA will interpret and apply the provisions of the Ordinance concerning anti-competitive practices (section 7K), abuse of a dominant position (section 7L) and non-discrimination (section 7N).

The Draft Guidelines are intended to replace "Guidelines to Assist the Interpretation and Application of the Competition Provisions of the FTNS Licence" dated June 1995 which became redundant in 2000 when the relevant conditions to the Fixed Telecommunication Network Services (FTNS) were incorporated into the Ordinance. The TA previously issued draft competition guidelines for consultation in February 2004. However, 2 significant changes required further modification of the draft guidelines. Firstly, section 7P of the Ordinance came into force in May 2004. This provision regulates certain mergers and acquisitions involving the telecommunications carrier licesees. The second change occurred in January 2005 when the TA implemented an ex post regulation of tariffs of PCCW-HKT Telephone Limited ("PCCW")by means of a new fixed carrier licence. The new licence for PCCW saw the removal of both the ex ante tarriff approval scheme and the dominance test which had previously applied. The Draft Guidelines reflects these recent changes.

The Draft Guidelines aim to provide "a focused explanation of how the TA will determine whether particular conduct by telecommunications licensees is damaging to competition having regard to the current marketplace realities in the provision of telecommunications services, and to indicate how licensees can effectively comply with the law." General principles which apply are set out in the draft Guidelines, together with some examples of what may constitute "at risk conduct".

The provisions require every licensee to act independently of all their competitors, a dominant player is under a special duty to not inhibit the competitive activities of other licensees. Accordingly, the Draft Guidelines cover topics such as collusive arrangements, preventing or restricting supply to competitors, unilateral anti-competitive conduct of a market dominant licensee, and markets and market dominance.

The TA has invited anyone to submit their views and comments on the Draft Guidelines. A copy of the draft guidelines can be downloaded from the TA's website:

Views and comments on the draft guidelines are required to be provided to the TA on or before 6 July 2007.