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INFORMATION INFRASTRUCTURE ADVISORY COMMITTEE (IIAC)

REPORTON HONG KONG

INFORMATION INFRASTRUCTURE

16 June 1998

CONTENT

Page

EXECUTIVE SUMMARY i

1. INTRODUCTION 1

2. TERMS OF REFERENCE AND MEMBERSHIP

2.1 Terms of Reference

2.2 Membership

1

1

2

3. ACTIVITIES CARRIED OUT

3.1 Meetings and Papers

3.2 Studies on Regional and Global Developments in the Information Infrastructure

3.2.1 General3.2.2 Reviewing Global Standardisation Activities

on the Information Infrastructure3.2.3 Visits to Overseas Countries3.2.4 Other Activities

3.3 Studies on the Information Infrastructure in Hong Kong

3.3.1 General3.3.2 A Pilot Study on the Present Status of the

Information Infrastructure in Hong Kong

3.4 Study on Technical Standards

3.5 Study on Applications

3.6 Study on Regulatory Framework

3.7 Public Awareness

3

3

3

33

45

5

55

5

6

7

7

PRESENT STATUS OF THE INFORMATION INFRASTRUCTURE IN HONG KONG AND BARRIERS AGAINST THE DEVELOPMENT

4.1 Physical Infrastructure

4.1.1 Existing Status4.1.2 Existing Network Standards

4.2 Applications

4.2.1 General4.2.2 Government and Related Organisations4.2.3 Business4.2.4 Education4.2.5 Community4.2.6 Existing Barriers against the Development of

Applications

4.3 Facilitation and Support

4.3.1 Existing Regulatory Framework4.3.2 Existing Barriers against the Development of

Regulatory Framework4.3.3 Existing Information and Computing

Standards4.3.4 Existing Barriers against the Development of

Technical Standards4.3.5 Existing IT Education and Manpower

Development 4.3.6 Information Technology and Broadcasting

Bureau

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8

89

10

101011121313

13

1316

20

21

21

22

THE WAY FORWARD

5.1 The Need for a Vision Statement


5.2.1 Network Interface

5.3 Applications

5.3.1 General5.3.2 Government5.3.3 Business5.3.4 Education5.3.5 Community


5.4.1 Regulatory Framework5.4.2 Co-ordination of Standards5.4.3 Promotion and Support of IT Research and

Development Activities5.4.4 Promotion of Public Awareness

5.5 Establishment of an Advisory Body under the Information Technology and Broadcasting Bureau

5.6 International Co-operation

5.7 International Promotion

5.8 The Need for Further Studies

23

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23

23

24

2425252627

27

272929

30

30

31

32

33

6. CONCLUSION AND RECOMMENDATIONS 34

ANNEXES 38

EXECUTIVE SUMMARY

Background

The world is undergoing a technological revolution and entering the Information Age. The combination of information technology and high speed communications is breaking down the traditional barriers to the movement of information (distance, location, time and volume) at an unprecedented rate. Hong Kong cannot underestimate the challenges and opportunities offered by such information technology which will shape the 21st century. We must ensure that Hong Kong is well placed to reap the benefits and maintain our competitive edge in this Information Age.

To exploit the unlimited opportunity offered by the Information Age, it is necessary for Hong Kong to develop in a timely and orderly manner an Information Infrastructure within Hong Kong and with links to the rest of the world. In the light of this, the Information Infrastructure Advisory Committee (IIAC) was established in March 1997 under the auspices of the Office of the Telecommunications Authority (OFTA) to advise on the co-ordination of the orderly development of the Information Infrastructure in Hong Kong (HKII). The term Information Infrastructure is defined to cover the following -

(a) physical infrastructure - the broadband networks usually consisting of optical fibre cables, wireless networks and associated hardware and software to convey broadband signals;

(b) applications using the physical infrastructure - this includes all possible users of a high-speed, high-capacity network by all sectors in the community: Government, private sector academics and individuals; and

(c) facilitating and supporting functions - this includes the regulatory framework, education, the development of computer literacy, manpower planning, training and retraining.

Terms of Reference

The terms of reference of the IIAC are as follows -

(a) to advise on the development including resources required and regulation of the Information Infrastructure in Hong Kong;

(b) to advise on the effective use of the Information Infrastructure for various possible applications in Hong Kong;

(c) to advise on technical standards and related issues in the development of the Information Infrastructure in Hong Kong; and

(d) to advise on the formulation of Hong Kong’s position at, and contribution to, international and regional fora on issues relating to the global and regional Information Infrastructure.

Membership

Representatives from a broad cross-section of the various industry sectors related to the information infrastructure have been appointed to serve he IIAC, including a number of scholars and experts appointed on an ad personam basis. The IIAC has also formed three Task Forces to deal with issues on Technical Standards, Applications and Regulatory Framework.

Lists of IIAC Members and Task Force Members are at Annexes A, B, C and D.

Work Programme

Bearing in mind the dynamic nature of the information technology and the need to take urgent action on a co-ordinated approach for the way forward in developing the information infrastructure in Hong Kong, the IIAC adopted an intensive work programme.

Within a period of 12 months from its establishment, the IIAC has carried out the following activities:

Study on information infrastructure development in other countries

The IIAC has considered the current status of development of information infrastructure in other jurisdictions in the Asia Pacific Region (IIAC Paper 7/97), a draft paper from APEC entitled “To make the Asia Pacific Information Society a Reality by the year 2001” (IIAC Paper 8/97) and arrange for presentations by a number of overseas experts on this subject.

A number of IIAC members participated in study visits to Japan (IIAC Paper 13/97), Malaysia and Singapore (IIAC Report 20/97) and the United States (IIAC Paper 26/97).

The studies and visits on information infrastructure developments in other parts of the world have been very useful in helping IIAC members to acquire first hand information on the latest technologies and strategies adopted in other parts of the world which have provided constructive insights and ideas on how Hong Kong’s information infrastructure should be shaped. It was also useful to have an opportunity to exchange information and ideas and establish contacts with other jurisdictions which would be helpful to future cooperation in the development of the Global Information Infrastructure.

Study on the present status of the information infrastructure in Hong Kong

IIAC members have found that there were little information or reference statistics on the present status of the information infrastructure in Hong Kong. Members considered it important to have a better understanding of the current position so that they could recommend more focused action plans for the way ahead. Apart from studies carried out by the three Tasks Forces, the IIAC supported OFTA to engage the Hong Kong Policy Research Institute (HKPRI) to conduct a pilot study on the present status of the Information Infrastructure in Hong Kong. The report of the HKPRI is available from OFTA’s internet homepage http://www.ofta.gov.hk. Although the scale of the pilot study was relatively

small, it has provided a preliminary picture of the current status and has brought out a number of issues for consideration and further studies.

Study on Technical Standards

To facilitate interconnectivity and interoperability of the various networks and services within our own information infrastructure and with that in other parts of the world, we must harmonize the technical standards employed in all the different parts of the information infrastructure.

In the short period of time available, the IIAC has conducted studies on the standardisation process for telecommunication standards and has compiled an inventory of standards used in the different networks in Hong Kong and for international interconnection. Studies have also been conducted in Chinese Character Coding, Electronic Data Interchange, media format and compression and Internet protocols and service elements. Preliminary studies on standards for applications have also been conducted on public information systems, digital broadcasting and video-on-demand, electronic commerce, automatic data capture and smartcards.

Study on Applications

A superhighway is totally useless if there are no cars running on it. Applications on the information superhighway are therefore vitally important to the success of the information society. With this in mind, the IIAC carried out studies on a range of sectors in the community, including the Government, the business sector, IT in education, and applications for the community facilities. Surveys on the use of IT in the various sectors have been conducted.

The various aspects of the introduction of electronic commerce in Hong Kong have also been considered, including the requirement to set up Certification Authorities and a public key infrastructure to facilitate secure transactions trading over open networks.

IIAC members considered an important aspect in applications is the use of IT in education. This includes both the use of IT to support teaching and the training of people to be able to use IT proficiently.

IIAC members are also concerned that our small and medium size enterprises (SMEs), which formed 98% of Hong Kong’s businesses, have not been equipping themselves adequately on the use of IT.

Study on Regulatory Framework

To attract investments and maintain sustainable developments in the information infrastructure, it is necessary to have a regulatory framework that supports these objectives.

In its deliberations, the IIAC has studied the existing regulatory framework on telecommunications and broadcasting services, identified potential barriers against the development of the information infrastructure, and examined the issue of convergence between telecommunications and broadcasting services.

IIAC members have also studied the problems associated with access of customers to networks and how in-building wirings should be constructed and shared for access.

Public Awareness

Having constructed super networks and developed various applications using these networks will only satisfy part of the necessary conditions for ensuring connectivity to the Information Age. We will also need people who know how to use the new technology and to develop a cultural environment that stimulates creativity and welcomes advances in the use of this technology.

Improving public awareness of the information infrastructure and the many possibilities and benefits that it brings therefore becomes an important and urgent task.

The IIAC has organised in association with the Trade Development Council a large scale exposition and conference in February 1998 which has attracted substantial public interest on the subject of information infrastructure.

Conclusion and Recommendations

Having examined the status of the information infrastructure development in Hong Kong and in other parts of the world, the IIAC concluded that Hong Kong has already had a good start in the building of a comprehensive and modern physical infrastructure. Development of applications has also been started in a number of sectors. Various initiatives have also been adopted to strengthen the facilitation and support for further development of the Information Infrastructure. However, the IIAC considers that we need to take a series of action in the short, medium and longer term to prepare Hong Kong for the challenges and opportunities offered by the Information Age and to make Hong Kong a leader, not a follower in the information world of tommorrow. The IIAC recommends the following -

The Need for a Vision Statement

(a) It is recommended that the newly established Information Technology and Broadcasting Bureau (ITBB) takes on as one of its early tasks the drawing up of a vision statement for developing Hong Kong into an Information Society, including the development of the Information Infrastructure. This will provide a clear guidance to the whole society on our strategy and direction on the way ahead into the information age.

(b) If possible, the vision statement should also be accompanied by an action plan with target dates on implementation of the major milestones in the development of the HKII. This will provide a blue print for the construction of the information infrastructure.

Physical Infrastructure

The physical infrastructure should be constructed with the following in mind:

(a) The interfaces of the broadband networks should be open and be accepted world-wide.

(b) The development of various broadband technologies in the local loop should be allowed.

(c) Open and fair access to commercial residential buildings should be facilitated.(d) In view of the increasing convergence between telecommunications,

broadcasting, computer and consumer electronics, the physical wirings, sockets and other interfacing facilities for different telecommunications, cable TV, communal TV and satellite TV connections should be revisited.

(e) Additional standardisation work in the areas of advanced telephone services, data communication and mobile communication is required.

Applications

Government(a) It is suggested that a whole-of-government info-communications system

should be developed as a matter of priority.(b) It is recommended that electronic information access and form/application

submission services by the Government should be established.

BusinessElectronic Commerce(a) It is recommended that an infrastructure for electronic commerce be set up to

allow efficient local and international trade, supported by a stable and flexible pro-competition regulatory framework.

(b) Consideration should be given to the establishment of one or more Certification Authorities, including a Public Key Infrastructure.

(c) International technical standards should be adopted to ensure security of transactions trading over open networks. But it may not be necessary to mandate a single standard.

(d) Close monitoring of technologies and standards for security techniques, electronic payment systems, security services infrastructures and electronic copyright management system is required.

Electronic Data Interchange (EDI)(a) The United Nations / EDI for Administration, Commerce and Transport

(UN/EDIFACT) standard is recommended.(b) Linear bar coding standard should be considered.(c) It is necessary to monitor the standards development on ADC technologies.

Smartcard(a) It may not be necessary to set any standards at applications level for various

types of card technologies.(b) ISO 7816 should be used as a fundamental standard.

Education

(a) The Government should, in broad consultation with relevant advisory groups and the public, formulate suitable empowerment and enablement programmes as part of primary and secondary education.

(b) It is suggested that computer networks linking all schools should be promoted. In the longer term, considerations should be given to the use of Network Computers (NC) interconnected by fibre links to all schools and libraries.

(c) Teachers should have access to more PC resources and Internet.(d) In the medium term, applications and education programme for empowering

and facilitating teachers to deliver 25% of the curriculum via the Information Infrastructure should be implemented.

(e) It is recommended that the experiences of the universities could be taken as a reference in promoting IT applications in primary and secondary schools.

Community(a) In the long term, the establishment of virtual communities or Information

Society gateways should also be promoted.(b) A study on developing remote interactive medical diagnosis / telemedicine

and home-caring services in Hong Kong should be carried out.

Facilitation and Support

Regulatory FrameworkAn Effective Regulatory Framework to Promote Fair and Effective Competition(a) It is recommended that the current regulatory framework should be reviewed

and refined, where appropriate, for application to the HKII. (b) All restrictions limiting competition in infrastructure and services should be

reviewed as soon a possible.(c) The current interconnection regime should be reviewed and refined, where

appropriate, as the basis for the regime to be applied to the HKII.

Open and Non-discriminatory Access to Information Infrastructure(a) Open and non-discriminatory access should be provided to all sources of

information and entertainment in all media.(b) A single regulatory framework appropriate and applicable for all operators

should be implemented.

A Stable and Flexible Regulatory Environment(a) It is suggested that a pro-competitive, technology-neutral regulatory

environment should be created.(b) It is also proposed that one body should regulate all transmission media and

another all content in respect of taste and decency.

Scope of Universal Service(a) The scope and affordability of universal service should be reviewed.

Encouragement of Private Investment(a) Any exclusivities for circuits and services should be terminated as soon as

possible and opened to competition.(b) Tariffs should be rebalanced and cross-subsidies should be removed as far as

practicable.

In-Building Cabling Systems Supporting High Capacity Communication Systems(a) Telecommunications legislation should be amended such that the provision of

access facilities meeting prescribed standards is a mandatory requirement. (b) As regards existing buildings, access to the existing access facilities and in-

building wiring to all network operators on a fair and non-discriminatory basis should be made mandatory.

Co-ordination of Standards(a) The standards setting process should be industry-led, but the Government

should provide maximum support as the facilitator, co-ordinator and promoter. One option is all IT standards should be centrally co-ordinated by ITBB for telecommunications, broadcasting as well as information and computing standards.

(b) Standards enforcement should be minimum as far as possible under a regulatory framework which could efficiently safeguard potential safety hazards, interference of normal operation and anti-competitive behaviours.

(c) The Government should facilitate and empower the industry to represent Hong Kong in international standards development forums and activities. It should also take a leading role in promoting the adoption of standards by becoming a user or requiring the use of the same standards.

Promotion and Support of IT Research and Development Activities(a) Several alternatives have been identified for improving the situation, such as

clarifying the purpose of individual funds, making the dissemination of applications more open, modifying some of the rigid application criteria, injecting more financial resources into the funds and setting up a separate R&D fund for IT related projects.

Promotion of Public Awareness(a) Efforts should be stepped up to promote the benefits of IT applications.(b) Intensive promotion on how IT could make life easier and more productive

should be targeted on groups which have not yet applied IT as extensively as they should have in their daily endeavours.

(c) It is recommended that public expositions and discussion fora on IT should continue to be organised in future.

Establishment of an Advisory Body under the Information Technology and Broadcasting Bureau

(a) It is recommended that an advisory body should be established under ITBB to co-ordinate the development of the Information Infrastructure including policy areas outside the ambit of ITBB.

International Co-operation

(a) Government agencies and private IT companies in Hong Kong with their counterparts in other countries should be encouraged.

(b) It is recommended that Hong Kong should participate in fora and activities on Information Infrastructure organised by international and regional organisations.

(c) It is suggested that Hong Kong should continue to organise regional and international exhibition and conference on Information Infrastructure.

International Promotion

(a) It is recommended that more effort should be made to promote the IT strengths of Hong Kong on a global level.

The Need for Further Studies

(a) It is recommended that a more comprehensive study should be conducted on the current status of the development of the information infrastructure in Hong Kong, building upon the results and findings of the pilot study conducted by the HKPRI. The study should provide an accurate measure of the use of IT in the various sectors and draw conclusions on where our strengths and deficiencies lie.

(b) It is also recommended that further studies be conducted in the following areas -(1) convergence of telecommunications and broadcasting;(2) establishment of a security infrastructure;(3) development of electronic commerce;(4) IT applications in the SMEs;(5) IT applications in education; and(6) review of existing regulatory framework for FTNS for application to

the HKII;(7) redefinition of universal service;(8) Chinese character coding; and(9) promotion of a demand-driven IT culture.

With the joint effort of the public and private sectors, we believe that Hong Kong would be able to develop a world class Information Infrastructure which will increase our productivity and competitiveness as well as improve the standard of living in our society.

1. INTRODUCTION

1.1 The world is undergoing a technological revolution and entering the Information Age. The combination of information technology and high speed communications is breaking down the traditional barriers to the movement of information (distance, location, time and volume) at an unprecedented rate. Hong Kong cannot underestimate the challenges and opportunities offered by such information technology which will shape the 21st century. We must ensure that Hong Kong is well placed to reap the benefits and maintain our competitive edge in this Information Age. As the Honourable Mr Tung Chee Hwa, the Chief Executive (CE) of the Special Administrative Region of Hong Kong, clearly spelled out in his inaugural Policy Address, “ ...... this [IT] development, ...... is about introducing entirely new ways of doing business and interacting in the community, from banking and shopping to learning and entertainment. ...... The real challenge is ...... for the whole community, to experiment, adapt and develop these new tools to enlarge our vision, conquer new markets and create new patterns of life for our entire community.”

1.2 To exploit the unlimited opportunity offered by the Information Age, it is necessary for Hong Kong to develop in a timely and orderly manner an Information Infrastructure within Hong Kong and with links to the rest of the world. In the light of this, the Information Infrastructure Advisory Committee (IIAC) was established in March 1997 under the auspices of the Office of the Telecommunications Authority (OFTA) to advise on the co-ordination of the orderly development of the Information Infrastructure in Hong Kong (HKII). The term Information Infrastructure is defined to cover the following -

(a) physical infrastructure - the broadband networks usually consisting of optical fibre cables, wireless networks and associated hardware and software to convey broadband signals;

(b) applications using the physical infrastructure - this includes all possible users of a high-speed, high-capacity network by all sectors in the community: Government, private sector, academics and individuals; and

(c) facilitating and supporting functions - this includes the regulatory framework, education, the development of computer literacy, manpower planning, training and retraining.

2. TERMS OF REFERENCE AND MEMBERSHIP

2.1 Terms of Reference

2.1.1 The terms of reference of the IIAC are as follows -

(a) to advise on the development including resources required and regulation of the Information Infrastructure in Hong Kong;

(b) to advise on the effective use of the Information Infrastructure for various possible applications in Hong Kong;

(c) to advise on technical standards and related issues in the development of the Information Infrastructure in Hong Kong; and

(d) to advise on the formulation of Hong Kong’s position at, and contribution to, international and regional fora on issues relating to the global and regional Information Infrastructure.

2.2 Membership

2.2.1 The IIAC was chaired by the Director-General of Telecommunications and included representatives of the local fixed network carriers, the telecommunications and IT industries and relevant professional bodies. Tertiary academics, industrialists, and experts in the relevant fields have also been appointed to serve on the IIAC. The list of members of the IIAC is at Annex A.

2.2.2 The IIAC established three task forces, namely, Task Force on Regulatory Framework (TFRF), Task Force on Applications (TFA) and Task Force on Technical Standards (TFTS). While the IIAC largely acted as a higher level steering committee, the task forces tackled individual issues on a more detailed and technical level. Each task force was led by a convenor who was responsible for reporting the progress of his task force at each IIAC meeting. Task force members were nominated by task force convenors or IIAC members. The lists of members of the TFRF, the TFA and the TFTS are at Annexes B, C and D respectively.

2.2.3 To facilitate the task forces to focus on specific issues critical to the development of the HKII, a number of working groups were formed under the TFRF, TFA and TFTS. Interested individuals were free to join the working groups. While the majority of working group members were co-opted from the respective task forces, some of them were non-task force members invited by task force convenors. For in-depth investigation and expert inputs on some specific issues, expert groups were formed under working groups as necessary.

2.2.4 The organisation chart of the IIAC is as follows -

Þ Task Force onRegulatory

Framework (TFRF)

InformationInfrastructure

AdvisoryCommittee

(IIAC)

Þ Working Group on Identification of Barriers to Development of Information Infrastructure

Þ Working Group on Non-telecommunications Regulatory Issues

Þ Working Group on Method of Analysis

Þ Working Group on Business Þ Working Group on Education Þ Working Group on Government Þ Working Group on Community,

Environmental & Personal Services Þ Working Group on Networks &

Interfaces Þ Working Group on Services &

Information Þ Working Group on Applications

& Enforcement

Þ Task Force onApplications (TFA)

Þ Task Force onTechnical Standards(TFTS)

3. ACTIVITIES CARRIED OUT

3.1 Meetings and Papers

3.1.1 8 IIAC meetings and 33 task force meetings were held since March 1997. Agendas, papers and minutes of all IIAC and task force meetings are available for public access at the following websites -

IIAC: http://www.ofta.gov.hk/iiac/iimain.htmlTFRF: http://www.ofta.gov.hk/iiac/rffhm.htmlTFA: http://www.ofta.gov.hk/iiac/afhm.htmlTFTS: http://www.ofta.gov.hk/iiac/tsfhm.html

3.2 Studies on Regional and Global Developments in the Information Infrastructure

3.2.1 General

3.2.1.1 To provide insights and ideas on how the Hong Kong’s Information Infrastructure should be shaped, the IIAC has carried out the following activities to study regional and global developments in the Information Infrastructure -

3.2.2 Reviewing Global Standardisation Activities on the Information Infrastructure

3.2.2.1. The IIAC notes that technical standards for the Information Infrastructure have been addressed at national, regional and international levels. There are many on-going activities on the development of technical standards for National Information Infrastructure (NII), Regional Information Infrastructure (RII) and Global Information Infrastructure (GII) in different nations, international organisations and industry fora/consortia. At the international level, the main driving organisations for Information Infrastructure standards are the International Telecommunication Union (ITU), the International Standards Organisation (ISO) and the International Electrotechnical Commission (IEC). At the regional level, the American National Standards Institute (ANSI) and the Information and Communication Technology (ICT) Standards Board facilitated by the European Telecommunications Standards Institute (ETSI) are co-ordinating the Information Infrastructure related standards in America and Europe respectively.

3.2.2.2 At the level of individual countries and economies which are the ultimate users of the Information Infrastructure related standards, it has been observed that some central co-ordination on Information Infrastructure standards and issues is generally in place with cross industry support and participation.

3.2.2.3 For example, Singapore launched a NII Standards Programme in July 1996 under the Singapore National Information Technology Standards Committee (ITSC) to monitor, co-ordinate and promote the timely establishment and deployment of standards in Singapore. Five technical committees have been established to examine five different areas, namely networking, electronic commerce, security, information sources and exchange, and electronic mail and directory services. Such mechanism could ensure the availability of standards for networks and systems to interoperate with one another seamlessly, and data and information to be exchanged easily between users and applications.

3.2.2.4 In Mainland China, it is understood that a Leading Group of Informatisation had been established under the State Council under the leadership of a vice premier and a number of ministers from different sectors. The Leading Group organised the Chinese National Informatisation Conference on 18 April 1997 in Shenzhen to formulate policies, plans and regulations for NII development. In the April meeting, a set of principles for establishing the NII was decided, covering state guidance for planning, unification of standards, promotion of joint establishment as well as enhancement of network interconnection. The “Three-In-One” network integration (communication, cable television and computer networks) project was also officially announced. According to a progress report in a Telecommunications Working Group (TEL’s 15th Meeting, March 5-8, 1997, Mexico City) of the Asia Pacific Economic Co-operation (APEC), the central themes of the policy with respect to NII development in China are to assimilate the latest technical advancement in communications and computer fields, and integrate informatisation with industrialisation, and to achieve the parallel development of the two. The objective is “to accelerate legislation and standardise the market in the fields of communications and information, in order to safeguard network reliability and security, protect intellectual property, prohibit circulation of harmful information, and finally maintain national interests, legitimate rights and interests of operators and consumers”.

3.2.3 Visits to Overseas Countries

3.2.3.1 Visits had been organised to visit Japan, Singapore, Malaysia and the United States of America (U.S.) with the following objectives -

(a) to conduct field study on the background, present situation and future target of the development of information infrastructure (II) in these countries;

(b) to study the experience of these countries in the development of II, especially latest ones which have not yet been documented with a view to making appropriate recommendations on the development of Hong Kong II; and

(c) to establish initial contacts and explore opportunity for future co-operation in II development between Hong Kong and these countries.

3.2.3.2 A summary of findings of these overseas visits is at Annex E and the detailed reports of these overseas visits have been documented as the following IIAC papers and are available in OFTA’s website http://www.ofta.gov.hk/iiac/iimain/html#p -

(a) IIAC Paper No. 13/1997 - Report on a Visit to Japan; (b) IIAC Paper No. 20/1997 - Report on Study Visit to Singapore and Malaysia;

and(c) IIAC Paper No. 26/1997 - Report on Study Visit to the United States of

America.

3.2.4 Other Activities

3.2.4.1 Other activities carried out by the IIAC on the development of regional and international development of the Information Infrastructure included the organisation of the HKII Exposition & Conference and the discussion of APEC Draft Paper - “To make the Asia Pacific Information society a Reality by the year 2001” (IIAC Paper No. 8/1997, available at IIAC’s website http://www.ofta.gov.hk/iiac/iimain.html#p).

3.2.4.2 Since different countries and regions have different institutional organisation, socio-economic structure, regulatory framework and technological capability, the sequence and rate of the Information Infrastructure development in different countries vary. With this understanding, the IIAC has drawn reference to the experience of other countries in making recommendations on the development of the HKII.

3.3 Studies on the Information Infrastructure in Hong Kong

3.3.1 General

3.3.1.1 In order to fulfil its terms of reference, the IIAC considered it necessary and essential, in its first year of operation, to gather information on the present status of the HKII so as to identify key issues and make constructive recommendations on the way forward. The following studies on the developments of the HKII have been conducted -

3.3.2 A Pilot Study on the Present Status of the Information Infrastructure in Hong Kong

3.3.2.1 To assist the IIAC in taking stock of the Information Infrastructure developments in Hong Kong and assessing the readiness of Hong Kong for the Information Age, with the endorsement of the IIAC in August 1997, OFTA commissioned and partially funded the Hong Kong Policy Research Institute Ltd (HKPRI) to conduct a pilot study entitled “A Pilot Study on the Present Status of the Information Infrastructure in Hong Kong” (The Pilot Study). The Pilot Study covered the following seven user sectors -

(a) Government and related organisations;(b) listed companies;(c) small and medium sized enterprises;(d) universities;(e) primary and secondary schools;(f) secondary school students; and(g) home PC users.

3.3.2.2 The major findings of the Pilot Study will be covered in Section 4.2 of this IIAC Report. The full report of the Pilot Study is available at IIAC’s website http://www.ofta.gov.hk/iiac/iimain.html for public access.

3.4 Study on Technical Standards

3.4.1 Owing to the diversity of technical issues concerning the Information Infrastructure, the TFTS has focused its study in the following three areas -

(a) Network & Interfaces- high level concepts and models for the Information Infrastructure

- critical interfaces and functionalities for standardisation- access infrastructure based on existing narrowband capabilities- access infrastructure based on broadband capabilities- user-to-network interfaces- network-to-network interfaces- user-to-user interoperability- operation & management aspects

(b) Services & Information- software and hardware technologies on information coding, storage,

compression and security- network oriented middleware functionalities (e.g. security, directory services,

billing, etc.) to support different multimedia applications- applications oriented middleware

(c) Applications & Enforcement- standards for public information systems - standards for business applications- principles and guidelines for enforcement of standards

3.4.2 A comprehensive list of issues examined and inventory list compiled by the TFTS is set out at Annex F. The major findings and recommendations made by the TFTS will be summarised in Section 4 and Section 5 of this IIAC Report. While the executive summary of the Report of the TFTS is attached at Annex G, the full TFTS Report is documented as IIAC Paper No. 5/1998 and is available at IIAC’s website http://www.ofta.gov.hk/iiac/iimain.html#p. To facilitate readers to understand technical terms used in the reports of the TFTS, a glossary of technical terms can be found at Annex H.

3.5 Study on Applications

3.5.1 The TFA has focused its work on examining the applications of the Information Infrastructure in business, education, Government as well as community, environment and personal (CEP) services. In addition to providing input to the Pilot Study, the TFA and its working groups have contributed to the organisation of the Public CEP Forum. The Public CEP Forum was an Applications Task Force event co-organised by OFTA, Hongkong Telecom, PRI and Hong Kong Productivity Council. It was held on 12 December 1997 to collect information on the applications of the Information Infrastructure in several areas, including personal services, community, building automation, environmental services, and education. The TFA also conducted interviews with universities and adult learning institutes and some Government departments so as to have a better understanding of the applications of the nformation Infrastructure in these organisations. Moreover, it has assisted in arranging a presentation on Electronic Data Interchange (EDI) for the IIAC.

3.5.2 To summarise the findings from the above activities, the TFA has produced a Matrix of Information Infrastructure Applications which is set out at Annex I. The major findings and recommendations made by the TFA will be highlighted in Section 4 and Section 5 of this IIAC Report and the executive summary of the Report of the TFA is attached at Annex J. The full TFA Report is documented as IIAC Paper No. 9/1998 and is available at IIAC’s website http://www.ofta.gov.hk/iiac/iimain.html#p.

3.6 Study on Regulatory Framework

3.6.1 The TFRF and its working groups have identified major regulatory issues, responsible regulatory bodies and legislation concerned as shown in Annex K. It has also looked into the objectives and basic elements of the regulatory framework for the HKII. Besides, it has identified non-telecommunications elements of regulatory framework for the HKII.

3.6.2 While the major findings and recommendations made by the TFRF will be discussed in Section 4 and Section 5 to follow, the executive summary of the Report of the TFRF is attached at Annex L. The full TFRF Report is documented as IIAC Paper No. 1/1998 and is available at IIAC’s website http://www.ofta.gov.hk/iiac/iimain.html#p.

3.7 Public Awareness

3.7.1 The Exposition & Conference was an IIAC event jointly organised by OFTA and the Hong Kong Trade Development Council (HKTDC). It was held on 12-15 February 1998 at the New Extension of the Hong Kong Convention and Exhibition Centre and was officiated by the CE. With the theme “Entering the Information Age”, the event was organised to serve the following objectives -

(a) to introduce to the community the direction of the Information Infrastructure development and its impact on the everyday life;

(b) to provide a platform for the IT / Telecom industry to meet with international partners for business exchange; and

(c) to promote Hong Kong as the regional telecommunication hub and IT usage.

3.7.2 About 50 000 visitors visited the Exposition which was divided into two main areas, namely the “Future Society” and a commercial exhibition. About 40 renowned speakers and 400 participants attended the two-day international conference to exchange views on several prominent issues related to the development of the Information Infrastructure. The report on the event is documented as IIAC Paper No. 8/1998 and is available at IIAC’s website http://www.ofta.gov.hk/iiac/iimain.html#p.

4. PRESENT STATUS OF THE INFORMATION INFRASTRUCTURE IN HONG KONG AND BARRIERS AGAINST THE DEVELOPMENT


4.1.1 Existing Status

4.1.1.1 The success of Hong Kong as a regional financial and commercial centre depends on the availability of a world class telecommunications infrastructure and the many services provided over it. There is no under-provision of network infrastructure in Hong Kong which is now served by four fixed networks, one cable television network, eleven digital mobile networks and connected to the rest of the world by two overland and seven submarine optical fibre cable systems and over 30 satellite earth stations of various types. It is under the present regulatory framework that investment in the network infrastructure has been made.

4.1.1.2 There are currently four operators licensed to provide Fixed Telecommunication Network Services (FTNS) under the Telecommunication Ordinance. These operators are permitted to install and operate network facilities (both narrowband and broadband) for communications between fixed points within Hong Kong. These fixed networks could provide the backbones and customer access networks for the HKII.

4.1.1.3 In respect of mobile communications, there are currently 6 independent operators licensed to operate a total of eleven digital public mobile radio telephone services or personal communication services in the 800/900 MHz and 1.7.-1.9 GHz bands under the Public Radiocommunication Service Licences. The present technology limits the mobile networks to narrowband applications, but the next generation of mobile services would have broadband multimedia capabilities. These mobile networks could also form part of the HKII.

4.1.1.4 Hong Kong Telecom International Limited (HKTI) used to have an exclusive licence valid until the end of September 2006 to provide certain “external” circuits. External means communication with places outside the Hong Kong Special Administrative Region (HKSAR) and includes places both in mainland China and in the rest of the world. Some external services are already liberalised such as call-back services, calling card services, international value-added network services, virtual private network services and simple resale for facsimile and data. Under an agreement between the Government and Hong Kong Telecommunications, the exclusive licence of HKTI had been terminated on 31 March 1998. This will enable liberalisation of all services to begin in January 1999, to be followed by facilities-based liberalisation as from 1 January 2000.

4.1.1.5 Under the regulatory framework for broadcasting, two “free-to-air” television broadcasting services (operating four independent programmes) and one subscription television broadcasting service have been licensed. The single subscription television broadcasting service licensee also operates a broadband network (based on optical fibres and microwave multipoint distribution systems for the trunk networks, and co-axial cable systems in the final distribution networks to the customers) which at present passes 90% of the homes in Hong Kong.

4.1.2 Existing Network Standards

4.1.2.1 At present, Hong Kong does not have a single authority responsible for standards setting and enforcement of all the three categories of standards related to the Information Infrastructure, namely telecommunications, broadcasting as well as information and computing. Different government departments have responsibilities for those standards falling under their respective areas of control.

4.1.2.2 Telecommunications Standards: For telecommunications standards, the regulatory body is the TA who is empowered by the Telecommunication Ordinance (Cap. 106) to oversee telecommunications matters in Hong Kong. The Telecommunications Standards Advisory Committee (TSAC) was established under OFTA for the purpose of setting telecommunication standards and relevant policies in consultation with the industry and concerned parties. The TSAC studies and recommends the required mandatory and voluntary technical standards for wireless and wireline telecommunications networks and equipment, in association with the relevant equipment approval requirements, for use in Hong Kong mainly with a view to ensuring safety, network compatibility and prevention of interference. Considering that Hong Kong is generally a technology user rather than maker, the telecommunications standards set in Hong Kong have followed the practice of adopting international or industry standards that are open and widely accepted throughout the world as far as possible. The standards recommended by the TSAC are then submitted to the TA for approval.

4.1.2.3 While the TSAC has previously focused on standardisation of narrowband networks and equipment, it is considered necessary that the TSAC should now put adequate emphasis on broadband standards and issues for the future Information Infrastructure based upon advanced digital technologies.

4.1.2.4 The TFTS has conducted studies on the standards used on existing telecommunication networks and the standards required for future broadband networks. An inventory of identified standards is at Annex M and a model for different networks that constitute the physical Information Infrastructure is at Annex N. Recommendations on adoption of standards to provide open and standardised user-network and network-network interfaces have been made by the TFTS. In addition, the TFTS has reviewed the existing standardisation process for telecommunication standards in Hong Kong and made some suggestions for improvement to cater for fast changing technologies. These are expected to be followed up by the TSAC for detailed consideration and implementation.

4.1.2.5 Broadcasting Standards: For broadcasting matters, the regulatory authority is the Broadcasting Authority (BA) to which OFTA provides advice on the technical standards used in broadcasting. Codes of practice and technical standards which are developed with the assistance of OFTA are issued by the BA. The technical documents cover the technical requirements on generation, processing and transmission of signals, performance requirements, etc. for broadcasting purposes. OFTA also monitors the developments of new broadcasting technologies including digital based terrestrial, satellite and cable broadcasting technologies with a view to setting suitable technical standards for consideration by the BA.

4.1.2.6 Internet Standards: In general, Hong Kong is a follower of world-wide Internet standard development. At present, there is no local organisation like the

International Internet Society to organise, support and co-ordinate certain Internet activities related to standards, technical development and operation and administration in Hong Kong.

4.2 Applications

4.2.1 General

4.2.1.1 The IIAC has studied the present status of IT applications in various sectors in Hong Kong. In addition, OFTA commissioned and partially funded the Hong Kong Policy Research Institute (HKPRI) to conduct “A Pilot Study on the Present Status of the Information Infrastructure in Hong Kong” (the Pilot Study). Major findings of the IIAC and the Pilot Study are highlighted in the following subsections. The full report of the Pilot Study is available at IIAC’s website http://www.ofta.gov.hk/iiac/iimain.html.

4.2.2 Government and Related Organisations

4.2.2.1 The IIAC has compiled an inventory of projects carried out by the Government and related organisations which aim at promoting IT applications within Government and the Hong Kong community. These projects include the following -

(a) Efficiency Unit - “Exploiting Internet Technologies in Government Programme”

· Foundation Building - including a Service-wide Stock Taking Exercise, Technological, Legal & Security Issues & Standards, Infrastructure, Equipment & Accessibility Review.

· Government Home Pages - including well designed pages & a coherent Information Locator Service, Improvement to existing Home Pages, Development of a comprehensive & informative Government Home Page.

· Pilot Application Projects - including Procurement Services of the Government Supplies Department, Licence Applications of OFTA, Mapping Information Services of Lands Department, Employment Services of Labour Department, Press Library Services of the Information Services Department, Trade Mark Services of the Intellectual Property Department.

· Strategic Business Review by Policy Area.· Awareness Promotion - including Exhibitions, Seminars, Demonstrations,

Training & Skills Transfer.

(b) Trade and Industry Bureau · work of the Hong Kong Industrial Estates Corporation· work of the Hong Kong Industrial Technology Centre Corporation· development of the Science Park by the Industry Department· investment promotion activities and consultation carried out by the Industry

Department· Industry Support Fund, Services Support Fund, Applied Research and

Development Scheme as well as Co-operative Research and Development Scheme administered by the Industry Department

· work of the Hong Kong Trade Development Council

(c) Provisional Urban Council · web home page· Internet Public Library On-line Catalogue· Information Kiosk project is expected to transition from internal pilot to initial

public rollout early in 1998 at 6 sites

(d) Provisional Regional Council · web home page· the Provisional Regional Council shares the URTIX ticketing systems from the

Provisional Urban Council· other systems which can facilitate ease-of-use by the community are being

contemplated. An example is the use of Visa Cash card for petty payments at the Tuen Mun Golf facility

Details of the projects are set out at Annex O.

4.2.2.2 IT are used primarily for data storage and communications in this sector. Office systems, Internet and multimedia technology are also used for customer services. Cost reduction and management information system (MIS)/decision support are the major reasons for using IT. The level of computer literacy in Government and related organisations is relatively high. However, it is difficult to recruit IT professionals to work in this sector.

4.2.2.3 On top of the generic barriers against the general usage of IT applications in the Government as stated in Section 4.2.6, there is room for improving the co-ordination among the IT projects set out above. The lack of common standards for Chinese character coding, the lengthy procurement procedures, and the low public awareness of Government IT projects and web pages also inhibit the wider use of IT applications in the Government.

4.2.3 Business

4.2.3.1 The IIAC has identified the following possible IT applications in the business sector for improvement of productivity and efficiency -

(a) Intranets and Extranets;(b) Electronic Directories;(c) Business-to-business Electronic Commerce including Supply Chain

Management;(d) Retailer-to-consumer Electronic Commerce;(e) Electronic Data Interchange (EDI);(f) Electronic Stock Exchange Trading;(g) CyberShopping;(h) CyberCash;(i) Smartcards;(j) Manufacturing Industry Requirements;(k) SME Requirements; and(l) Transportation Industry Requirements.

4.2.3.2 The primary use of IT in listed companies is for transaction processing. Multimedia technology is also used for customer services and Internet for competitive marketing.

4.2.3.3 In the sector of small and medium size enterprises (SMEs), office automation and client server systems are used for data storage and transaction processing. Multimedia systems are also used for customer services. However, decision support and MIS systems are not common.

4.2.3.4 Although business organisations are supported by some IT technology and computer-literate staff, electronic commerce and other IT business applications are not as widely adopted as they can be. The major reasons are the lack of a legal framework, a Certification Authority and data security measures to support the development of electronic commerce. The traditional reliance on paper document, users’ resistance to invest in new technologies and lack of common technical standards also hinder the applications of IT in the business environment. Other generic barriers for the development of IT applications will be discussed in Section 4.2.6.

4.2.4 Education

4.2.4.1 Schools: The Pilot Study indicated that secondary and vocational schools are more automated than primary schools. About 30% to 60% of the IT usage is for school administration and less than 25% of the applications are used for student learning.

4.2.4.2 The concerns of school principals, school IT teachers and students are different. Principals generally regard their schools not ready for the use of IT in teaching while IT teachers are more eager to use IT in teaching. Both principals and teachers appreciate the benefit IT could bring about but worry about the support available to them. As for students, they have higher recognition of IT benefits and more positive motivation to learn while their major concern is the costs for catching up with the technology.

4.2.4.3 Universities: Backbone networks in universities are moving towards ATM switch. Every student and staff member are given an e-mail account in all universities, except the Open University of Hong Kong. Universities have transited to open systems and client server systems. The Joint University Computer Centre (JUCC) maintains the Hong Kong Academic Research Network (HARNET), which is the gateway for schools’ connection to Internet. Internet applications are limited to one-way information delivery in most cases. Computer knowledge of incoming staff and students are improving and fewer IT staff are now needed for operation of computer centres. Task forces are set up in many institutions to encourage and support IT applications.

4.2.5 Community

4.2.5.1 Home PC Users: 41% of the households have one or more PCs at home. The average use of home PC is 8.41 hours per week and 50% of the users use their home PCs 4 hours per week.

4.2.5.2 Potential IT users do not fully understand the concept about Information Society and how Information Infrastructure could bring about benefits to our daily activities. Some of them are concerned about the rapid pace of technological changes. They have fear about the future uncertainty and may resist to adapt to the new way of life. Another barrier identified for the IT applications in the community is the complexity of Chinese language and the translation between Chinese and English in the development of software for local use. In addition, the community is concerned about the lack of regulations on network providers and information content providers as well as the lack of security measures to protect electronic shopping. Other generic barriers against the development of IT applications are set out in Section 4.2.6 below.

4.2.6 Existing Barriers against the Development of Applications

4.2.6.1 In addition to the specific barriers against the development of applications in each of the four sectors (Government, business, education and community) as discussed in the above sections, some generic barriers have also been identified. These are -

(a) users’ resistance to applications of new technology which may arise from lack of awareness and training;

(b) decision makers’ resistance to investment in new technology which may arise from lack of awareness, manpower resources and financial support;

(c) mismatch between paper and electronic documents flow;(d) adjustment of the existing regulatory framework in view of convergence of

the telecommunications, broadcasting as well as information and computing;(e) inadequate competition in broadband infrastructure and services;(f) high network tariffs; and(g) incompatible hardware and software standards.


4.3.1 Existing Regulatory Framework

4.3.1.1 There is no regulatory framework labelled as the “Regulatory Framework for the Information Infrastructure”. However, the elements of such a framework can be found in two separate regulatory frameworks for telecommunications and broadcasting networks and services. These two frameworks are presently provided for under separate legislation and administered by separate regulators.

4.3.1.2 The Telecommunications Authority (TA), supported by OFTA, is responsible for the regulation of the telecommunications networks and services under the Telecommunication Ordinance. The BA, supported by the Television and Entertainment Licensing Authority (TELA), is responsible for the regulation of broadcasting services which, largely as the result of past evolution of the regulatory framework, are regulated under a collection of different ordinances - Television Ordinance for terrestrial television

broadcasting services and the Telecommunication Ordinance for sound broadcasting and satellite television broadcasting services.

4.3.1.3 A regulatory framework to promote infrastructure development is already in place: The FTNS licence incorporates licence conditions which are designed to provide for an environment conducive to the investment in and development of the HKII as well as the stimulation of facilities-based competition through mandated interconnection, tariffing and the prohibition of certain anti-competitive conduct.

4.3.1.4 Rights of the FTNS operators: The FTNS operators have certain rights under their licences which include the following -

(a) utility rights - the right to lay wires and infrastructure on, over and under public or private land;

(b) a right of interconnection with other carriers on terms which are fair and reasonable; and

(c) a right to share bottleneck facilities of other FTNS licensees if according to the TA it is in the public interest.

4.3.1.5 Obligations of the FTNS operators: Obligations of the FTNS operators include the following -

(a) the building of a network covering a specified minimum area and reaching a minimum number of large buildings and an obligation to provide telephone service;

(b) a requirement to interconnect their networks;

(c) an obligation to pay a “universal service contribution” as determined annually by the TA from time to time to compensate Hong Kong Telephone Company (HKTC) or others having an obligation to provide1 universal service in Hong Kong; and

(d) an obligation to comply with conditions prohibiting anti-competitive practices and the abuse of 2 dominant position.

4.3.1.6 Competition Policy: Hong Kong has no anti-trust or competition law of general application. However, the FTNS licences have already included provisions which are intended to regulate anti-competitive conduct and abuse of dominant position. These provisions include the following -

1The universal service obligation is imposed upon HKTC as the dominant provider of local telephony services and essentially requires HKTC to provide telephone service to all Hong Kong people who request it at a standard tariff rate. Thus service must be offered even in circumstances in which it is uneconomical to do so. The cost of this social obligation is shared among operators by the payment of a universal service contribution.

2Describes a situation where in a defined market a firm or a licensee is able to act without significant competitive restraint from its competitors and customers.

(a) a provision defining some of the conduct to which the prohibition may apply, for example, collusive agreements, boycotts of supply of services to competitors, exclusive arrangements, or anti-competitive agreements among licensees;

(b) prohibitions against agreements, arrangements or understanding which have an anti-competitive purpose or effect, tying arrangements and arrangements under which a licensee gives or receives undue preference to or from an associated or affiliated person; and

(c) a provision that a licensee shall not abuse its position if it is in a dominant position with respect to a market for the relevant telecommunications services. Conduct covered includes predatory pricing (e.g. pricing below cost to undermine competitors), price discrimination, harsh contractual terms, tying arrangements and discrimination in the supply of services to competitors.

4.3.1.7 Interconnection: We now have in Hong Kong a large number of competing operators. These operators must interconnect their networks to provide customers of one network with access to the customers and services of another. “Interconnection” therefore means the commercial and technical arrangements under which two operators connect their networks together so that the customers of one have access to the customers and/or services of the other.

4.3.1.8 Type I interconnections refer to the interconnections between gateways of networks. The existing regulatory framework is based on a preference for commercial negotiations and settlement, but the TA has the power of making determinations on the terms and conditions under the Telecommunication Ordinance.

4.3.1.9 Type II interconnection (i.e. interconnection at a customer building or local exchange so as to use a short link in a competitor’s network to reach a customer) is available for the existing “narrowband” networks. This provides efficient use of existing network infrastructure and brings the benefit of competitive services to customers who cannot be directly reached by all competing networks. It is, however, recognised that investment in a “broadband” network is a risky investment because of the uncertainty in future demand.

4.3.1.10 Broadcasting: In 1993, Wharf Cable was granted a 12-year licence for the provision of subscription television broadcasting services. The licence was expressed to be exclusive for the first three years, the Hong Kong Government being required to hold a review prior to the expiry of this exclusive period to consider whether the exclusivity should be extended or other players licensed. A review was undertaken in 1996 and it was decided that until a review is conducted in 1998, no additional subscription television broadcasting licence would be issued.

4.3.1.11 Video on Demand (VOD) has been narrowly defined as including services for the provision of “television programmes” to homes on demand on a “point to point” basis. This definition has excluded the majority of services such as electronic transactional services, home shopping, home banking, tele-medicine, etc. over the future Information Infrastructure. FTNS operators are entitled to provide conveyance services in respect of VOD, but the provision of the VOD service is regulated under the Television Ordinance and requires a programme service licence.

4.3.1.12 Pending a review to be conducted in 1998, the Government has limited the number of programme service licensees to two.

4.3.1.13 All FTNS licensees are entitled to provide conveyance services to VOD service providers. As an affiliate of HKTC holds a VOD licence, it is important that the incumbent operator, HKTC, treats all programme service providers on a non-discriminatory basis. Thus the tariffs for the “broadband” conveyance services must be applied to all programme service providers on a non-discriminatory basis. This does not mean that HKTC may not give discounts based on the volume and terms of commitment of individual customers. However, such discounts must have the prior approval of the TA, be published as tariffs, and the tariffs should be applied to all customers who meet the published criteria for the discount.

4.3.1.14 To satisfy the TA’s requirement on accounting separation between the “broadband” conveyance services and other services of HKTC, and to monitor the financial transactions between HKTC and programme service providers in the supply of the “broadband” conveyance services, HKTC will be required to maintain, as a separate service segment, accounts for the “broadband” conveyance services in accordance with the Accounting Manual issued by the TA.

4.3.1.15 Internet: The provision of Internet access services in Hong Kong is deregulated. The public can easily connect their computers to the Internet network through the public switched telephone network or dedicated leased circuits. There are no barriers at all for entry into the market for the supply of Internet access services. There are more than 120 Internet Service Providers (ISPs) licensed.

4.3.1.16 Content of materials transmitted by the ISP’s services has to comply with the Control of Obscene and Indecent Articles Ordinance. Apart from this, there is no statutory regulation of the content. However, there is a voluntary code of practice (issued by the Hong Kong Internet Service Providers Association) providing for a form of self regulation by members of the Internet industry in the placing of materials on the Internet.

4.3.2 Existing Barriers against the Development of Regulatory Framework

4.3.2.1 Before discussing any barriers to achieving the objectives of a regulatory framework for the Information Infrastructure, it is first necessary to define briefly these objectives. The first objective is that the regulatory framework for the Information Infrastructure should promote the investment in and roll-out of network infrastructure. Secondly, the regulatory framework should promote the applications of the Information Infrastructure. This means, amongst others, that new and innovative services, and the

dissemination of and access to diverse content should be encouraged over the Information Infrastructure. Thirdly, the objective of a regulatory framework for the Information Infrastructure should be to maximise community benefits in choice, quality, innovation and affordability.

4.3.2.2 Although there is already a regulatory framework aimed to promote the rollout and development of the Information Infrastructure, certain barriers may still exist which, if not satisfactorily overcome, could impede the future development of the Information Infrastructure. In reviewing the existing regulatory framework, barriers can potentially exist in the following areas -

(a) Measures to Tackle Abuse of Dominant Position and Anti-competitive Behaviour;

(b) Regulatory Restrictions Limiting Competition;(c) Access to the Information Infrastructure;(d) The Interconnection Regime;(e) Ability of the Regulatory Environment to Cope with Convergence;(f) Definition of Universal Service;(g) Incentives for Private Investments;(h) Building Access Facilities; and(i) Non-telecommunications Barriers.

4.3.2.3 Measures to Tackle Abuse of Dominant Position and Anti-competitive Behaviour: The possibility that a licensee in a dominant position could abuse that position is a major concern because of the possibility that any abuse might have significantly adverse effect on the development of the Information Infrastructure.

4.3.2.4 Although the existing regulatory framework has included provisions to tackle abuse of dominant position and anti-competitive practices, the past operation of these provisions should be reviewed to ensure that they are effective in achieving the desired objective. Of particular concern is a situation of vertical integration combined with the abuse of market dominance. Given the size of investment in broadband infrastructure, it is highly possible for dominance and vertical integration to emerge in the market.

4.3.2.5 Regulatory Restrictions Limiting Competition: Although competition has been used as the vehicle to promote network infrastructure rollout in the existing regulatory framework, there are still a number of regulatory restrictions remaining which limit competition.

4.3.2.6 These restrictions included the constraints imposed as the result of the exclusive licence granted to HKTI to provide many international services and gateway facilities. The development that Hong Kong Telecom (HKT) had reached an agreement with the government on the surrender of HKTI’s exclusive licence was welcomed.

4.3.2.7 There are restrictions on the use of the network infrastructure. For example, under the current regulatory framework, companies licensed to provide broadcast distribution of television services over cable are not permitted to provide telecommunications services under their broadcasting licences. Conversely, under the current regulatory regime, telecommunications services licensees are not permitted under their telecommunications licences to provide broadcast distribution of television services over cable.

4.3.2.8 There is only one company who is currently permitted to provide subscription television broadcasting services. The number of programme services licences (Video on Demand) is limited to two. This is also considered as an entry barrier to achieving the objectives of the regulatory framework on the Information Infrastructure.

4.3.2.9 These regulatory restrictions were imposed with good justifications. However, these restrictions ought to be reviewed from time to time to ensure that the justifications for imposing the restrictions are not out-of-date and the restrictions are not hindering the development of the Information Infrastructure.

4.3.2.10 Access to The Information Infrastructure: For the purpose of discussing access to the Information Infrastructure, the infrastructure may be divided into 4 levels:

Level 1 Content Provision Level 2 Service Provision Level 3 Distribution NetworkLevel 4 Consumer Equipment

4.3.2.11 Barriers may occur where access to the Information Infrastructure is not sufficiently open at each of these levels. Examples of such barriers are whether or not unrestricted access is provided to all content providers (subject to the compliance of the content with the relevant law), given the limitation in the number of operators at Level 2 for certain types of services (e.g. broadcasting services and programme services). Furthermore, whether the open and unrestricted access has been provided by network operators at Level 3 to service providers at Level 2 should be considered. The existing restriction of service providers at Level 2 to access customer equipment (e.g. set-top decoders) at Level 4 due to technological limitation is another potential barrier to the open and unrestricted access to the Information Infrastructure at all levels.

4.3.2.12 The Interconnection Regime: A possible future barrier to achieving the objectives of a regulatory framework for the Information Infrastructure would be an environment in which incompatible standards and absence of interconnection between networks prevent users from moving from one competing network operator, service provider or content supplier to another. By networks, we mean not only the local fixed networks but also broadcasting, mobile, and satellite networks. Without a fair interconnection regime the objectives of a regulatory framework for the Information Infrastructure would be severely undermined.

4.3.2.13 Ability of the Regulatory Environment to Cope with Convergence: If the regulatory environment is not stable to enable entrepreneur to take business decisions and sufficiently flexible to facilitate the introduction of new services, or to cope with the convergence of telecommunications, broadcasting and computer technologies, it will be inadequate to ensure the continued development of the Information Infrastructure.

4.3.2.14 Definition of Universal Service: An inappropriate definition of the Universal Service would be a barrier to the development of the Information Infrastructure. Although the scope of “Universal Services” is at present restricted only to “basic telephone services”, with the development of the Information Society, to remove the difference between those

who have access to the Information Infrastructure and those who do not, the scope of the “Universal Service” would need to be reviewed to consider if it is justified to include some more advanced services than the existing “basic” services. It may be argued that if the scope of “Universal Service” was not extended the growth of the Information Infrastructure would be hindered. However, an inappropriate extension of the Universal Service definition could impede fair competition between the Universal Service providers and the non-Universal Service providers and constitute a barrier to the development of the Information Infrastructure.

4.3.2.15 Incentives For Private Investments: Private investment is necessary not only for the injection of capital for the development of the Information Infrastructure but also stimulates the development of new technologies and significant increases in efficiency. If barriers are created to private investment such as restriction on licensing, access by users to the services of potential investors, regulatory restrictions on the use of infrastructure and excessive prices for transmission services, potential investors would have no incentive and would be discouraged from investing in the Information Infrastructure.

4.3.2.16 Building Access Facilities: The provision of in building access facilities and wiring are considered critical facilities to enable users to access the Information Infrastructure. Limited space for operators to install their equipment and wiring in buildings can constitute a bottleneck. If access facilities, whether in existing buildings or new buildings are not sufficient to satisfy all the requirements of competing operators a barrier to achieving the objectives of a regulatory framework for the Information Infrastructure arises.

4.3.2.17 Non-Telecommunications Barriers: Barriers could exist in a number of areas outside the regulation of telecommunication networks and services. These areas include the protection of Intellectual Property Rights (IPR), privacy, security of communications and legal bases for the conduct of electronic commerce.

4.3.2.18 If there is insufficient IPR protection, content creators might not wish to make their works available via the Information Infrastructure and the emerging markets will be devoid of content.

4.3.2.19 A low level of security poses a special threat to the privacy interests of individuals. This may result in individuals being reluctant to make full use of the applications to which the Information Infrastructure can be put. It also means that restrictions may increasingly be imposed on the free flow of personal data to jurisdictions that are deemed not to provide adequate protection. These are inhibiting factors for the development of the Information Infrastructure.

4.3.2.20 Security includes the integrity, confidentiality, and reliability of the networks and of the information they carry. If users do not believe that an Information Infrastructure is a secure, reliable system, they will be reluctant to use it, thereby diminishing its value. The lack

of security has to date been one of the major barriers to the development of the Information Infrastructure.

4.3.2.21 If issues such as identification, certification and authentication of buyers and sellers, and legal status of digital signatures are not dealt with the development of the Information Infrastructure would be hindered as a result of lack of progress in the use of electronic commerce.

4.3.3 Existing Information and Computing Standards

4.3.3.1 To ensure the networks forming the Information Infrastructure are interoperable and the applications could be shared by all users on the networks, we need to adopt common information and computing standards. The scope of these is quite large and in principle includes all aspects of information processing (i.e. coding, compression, security, authentication, access, control, delivery, switching, conversion, storage, retrieval, presentation, classification and management). Currently there are no dedicated laws or authority to regulate the use of such standards in Hong Kong.

4.3.3.2 At present, some organisations in the industry are involved in co-ordinating and promoting the use of technical standards for individual areas of information and computing technologies. For example, standards related to Chinese character coding are monitored by the Hong Kong Information Technology Federation (HKITF) and standards for EDI by the Hong Kong Article Numbering Association (HKANA) and service providers like Tradelink. These organisations also co-ordinate inputs and representations from the local community in international and regional standardisation meetings and fora. So far the standardisation of information & computing technologies in Hong Kong generally follows an industry driven process.

4.3.3.3 Chinese Character Coding: The most widely used Chinese coding scheme in Hong Kong is the Big 5 Code containing 13051 Traditional Chinese characters. The ultimate goal is convergence to the ISO 10646 Universal Multiple-Octet Coded Character Set which encompasses the commonly used Traditional Chinese, Simplified Chinese, Japanese Kanji, Korean Hanja, and hopefully all the Hong Kong unique characters. To achieve a migration from the existing coding scheme to the international standard, further study is requested by concerted efforts of the public and private sector.

4.3.3.4 To cater for the specific needs of the local community, a list of the sources of the Hong Kong unique characters has been prepared for submission to the ISO for inclusion in the ISO 10646 Standard by the Information Technology Services Department (ITSD) representing HKSAR. The ISO plans to implement the addition of ideographic characters in Plane Two of ISO 10646 in two phases. The first for urgent needs and the second one for later completion. In the light of the urgency of migrating the existing Chinese character coding scheme to the ISO 10646 Standard, ITSD has been working closely with the Commissioner for Official Languages in co-ordinating the collection of Chinese character requirements by the HKSAR Government and information about Chinese characters used in the community. It is believed that the dictionaries together with local character sources collected should form a very good base for the first submission in May 1998. At present, effort is being made on identifying whether other supplements would be required.4.3.3.5 Business Applications : Technical standards and current developments in the areas of Electronic Data Interchange, Electronic Commerce, Smartcards and Automatic Data

Capture have been examined. In general, where a common standard is considered necessary, adoption of international standards should be encouraged as far as possible. Since some of the concerned technologies and standards are evolving quickly, such as in electronic commerce, it may be premature to consider a common standard at this stage. Close monitoring and further study on adoption of standards in future are required.

4.3.4 Existing Barriers against the Development of Technical Standards

4.3.4.1 The existing administration structure is increasingly challenged by the rapid technology convergence of telecommunications, broadcasting, and computer networks which requires more and more cross agencies co-ordination. For example, the provision of VOD service could involve telecommunications, broadcasting and computing elements. EDI and E-Commerce could involve not only technology considerations but also regulatory issues for the industry, trade and monetary authorities. The issue of convergence will have impact on regulation, standards making as well as wider socio-economic aspects.

4.3.4.2 In order to allow Hong Kong to stay in the forefront of the information world, there is a high demand in the level of innovation, flexibility and foresight in both technology and non-technology elements that contribute to the information economy. More research and development activities with emphasis on meeting the specific needs of the local community are required.

4.3.5 Existing IT Education and Manpower Development

4.3.5.1 The Chief Executive spoke the issue on IT education and manpower development in his 1997 Policy Address. The Government considered it important to create a cultural environment which would be conducive for creativity and advanced use of IT. It is equally important to provide to every citizen with the opportunity to receive quality education so that they can master the skills needed for participating in the new economy. The aim of the Government is to have teaching in at least 25% of the curriculum supported through IT within five years, to see IT being applied comprehensively in school life and all teachers and Secondary 5 graduates being able to work competently with IT tools within ten years.

4.3.5.2 To achieve these goals, the Government committed to —

(a) increase the number of computers in each primary school from 15 to an average of 50 and in each secondary school from 20 to an average of 82;

(b) procure and develop new software to support teaching, especially for languages;

(c) enhance training to over 30,000 teachers in IT use, and set up an IT Education Resource Centre to support the management of school IT systems;

(d) introduce pilot schemes in 20 schools to establish best practices for IT applications in teaching and learning;

(e) connect all schools to the Internet; and

(f) make preparations for an education-specific Intranet for multi-dimensional communication and sharing of information within the school sector.

4.3.6 Information Technology and Broadcasting Bureau

4.3.6.1 In his 1997-98 Policy Address, the CE has committed to re-grouping the responsibilities originally divided among several bureaux relating to IT-related matters and commission one bureau secretary to lead and co-ordinate the Government overall effort in these areas. Under the rationalisation exercise, the Broadcasting, Culture and Sport Bureau (BCSB) will be restructured as the Information Technology and Broadcasting Bureau (ITBB). While retaining the policy on broadcasting matters, the re-organised bureau will take over the responsibility on telecommunications and IT applications within Government from Economic Services Bureau and Finance Bureau respectively.

4.3.6.2 The overall IT-related responsibilities of ITBB will include the following -

(a) to formulate policies to facilitate the establishment of an open and common interface Information Infrastructure, accessible throughout the HKSAR;

(b) to lay down an appropriate regulatory framework to remove obstacles to interconnection between networks and enhance Hong Kong’s external info-communications links;

(c) to develop a policy for accelerating the use of IT applications using the common interface in the public and private sector; and

(d) to commission pilot projects that make innovative use of the developing infrastructure.

4.3.6.3 It is expected that the responsibilities will be further developed by the Secretary for Information Technology and Broadcasting.

5. THE WAY FORWARD

5.1 The Need for a Vision Statement

5.1.1 The IIAC has discussed and considered the role of the Government in the development of the HKII. While IIAC Members agree with the general principle that there should be significant private sector participation in the HKII, they are of the view that the Government should take the lead in bringing the various sectors of the IT industry together and that it would be very helpful for the entire industry and community to have a common direction and vision on the way forward in the overall development of the HKII. As ITBB has just been established in April 1998 to take over responsibility for IT policy in the Hong Kong Government, it is recommended that ITBB takes on as one of its early tasks the drawing up of a vision statement for developing Hong Kong into an Information Society, including the development of the Information Infrastructure. Having considered similar statements in other parts of the world and the specific needs of Hong Kong, it is suggested that the vision statement may encompass the following elements -

(a) maintaining and enhancing Hong Kong’s position as an Information Society in the global and regional competitive environment;

(b) stimulating economic growth, increasing productivity and creating new jobs;(c) facilitating information access and information exchange among people in

order to develop Hong Kong into a knowledge society and to improve the quality of living of people;

(d) maximising community benefits in choice, quality, innovativeness and affordability; and

(e) providing open access for the users.

5.1.2 The principles for carrying out the vision may include the following -

(a) promoting investment in and roll-out of network infrastructure;(b) promoting the applications of the Information Infrastructure - encourage new

services, promote dissemination of and access to diverse services over the Information Infrastructure;

(c) promoting fair competition;(d) promoting interconnectivity and interoperability;(e) ensuring privacy and data security;(f) protecting intellectual property rights;(g) supporting diversity of content, including cultural and linguistic diversity; and(h) building up the technical expertise required to support the development of the

HKII.

5.1.3 If possible, the vision statement should also be accompanied by an action plan with target dates on implementation of the major milestones in the development of the HKII.


5.2.1 Network Interface

5.2.1.1 High speed and high performance systems, using advanced technology like Asynchronous Transfer Mode (ATM), will form the core of future broadband networks. The

interfaces should be open and be accepted world-wide as the international standards under ITU, ISO or IEC. This will allow our broadband networks to grow in a co-ordinated manner and be able to interconnect to the rest of the world’s broadband networks. Optical fibre transmission systems are expected to be the most important part of the broadband network in the foreseeable future. Copper loop based transmission systems may continue to be used for areas where fibre cables are not able to cover in time. Various types of Digital Subscriber Line (xDSL) could be used to deliver the broadband services. Broadband wireless systems such as Local Multipoint Distribution Services (LMDS) might also be used for sparsely populated or rural areas.

5.2.1.2 The development of various broadband technologies in the local loop should be allowed. Open and fair access to commercial residential buildings should be facilitated by setting relevant technical standards, codes of practice and regulatory measures to improve installation and management of broadband communications facilities inside buildings.

5.2.1.3 In view of the increasing convergence between telecommunications, broadcasting, computer and consumer electronics, the physical wirings, sockets and other interfacing facilities for different telecommunications, cable TV, communal TV and satellite TV connections should be revisited in order to provide convenient access by customers to new digital services.

5.2.1.4 Based on an inventory list of network standards compiled, it was found that some existing network interfaces do not have common standards in Hong Kong. Additional standardisation work in the areas of advanced telephone services, data communication and mobile communication is required.

5.3 Applications

5.3.1 General

5.3.1.1 After years of strong economic growth in Asia, the region is experiencing an economic downturn since late 1997. With an aim to recover from the downturn and lay the path for long term development, every administration in the region is formulating and implementing new policies to strengthen its competitiveness and tackle the specific problems in its own territory. For Hong Kong, one of the many ways to consolidate our foundation for long term development is to use IT to increase our productivity. By using more IT in the public and business sector, we could increase our efficiency and responsiveness to customers’ demand. Extensive application of IT in schools and the community can help us learn and live up with the pace of the changing world. Although the application of IT is no quick solution for Hong Kong to get out of the regional economic down cycle and may even bring along short term sufferings such as elimination of labour-intensive jobs or significant capital investment, the IIAC believes that the benefits of IT applications will out-weight the loss in the long run. Therefore, the IIAC recommends promoting the use of IT in Government, business sector, educational institutions and the community. The detailed recommendations will be discussed below.

5.3.2 Government

5.3.2.1 At present the use of computers in Government is common. However, many of its computers are not linked together or only linked within individual departments. Paper communications are still the major means within and between Government departments resulting in both a lack of interdepartmental information flow and a segmentation of information-based services to the community. In order to increase internal communication and administration efficiency, it is suggested that a whole-of-government info-communications system should be developed, linking all Government departments as well as all related organisations. To offer more convenient and user-friendly services to the public and promote the use of IT within the community, it is recommended that electronic information access and form/application submission services by the Government should be established. Services to be provided may include electronic library access, on-line reservation of recreation facilities and electronic directory in the short term and remote interactive medical diagnosis/telemedicine and home caring services in the long run.

5.3.3 Business

5.3.3.1 To maintain Hong Kong as one of the leading trade and financial centres in the world and to sustain Hong Kong’s economic growth, the private sector, both listed companies and SMEs alike, should be encouraged to use IT to conduct business and invest in IT equipment and staff training. Through the Information Infrastructure, companies can reach their customers and handle transactions in a prompt and cost-effective manner. IT applications for business include Electronic Commerce, Electronic Data Interchange (EDI), Automatic Data Capture (ADC) and Smartcard.

5.3.3.2 Electronic Commerce: To maintain Hong Kong’s status as one of the world’s leading financial and trade centres as well as to create more business opportunities, it is recommended that an infrastructure for electronic commerce be set up to allow efficient local and international trade. Such electronic commerce infrastructure should be supported by a stable and flexible pro-competition regulatory framework. Consideration should be given to the establishment of one or more Certification Authorities, including a Public Key Infrastructure, in Hong Kong to facilitate electronic commerce over open networks like the Internet.

5.3.3.3 International technical standards should be adopted to ensure security of transactions trading over open networks. Technical standards should focus on interoperability on local and international level. But it may not be necessary to mandate a single standard. Close monitoring of technologies and standards for security techniques, electronic payment systems, security services infrastructures and electronic copyright management system is required.

5.3.3.4 Electronic Data Interchange (EDI): Based on the study on EDI standards, the United Nations/EDI for Administration, Commerce and Transport (UN/EDIFACT) standard is recommended for EDI implementation in Hong Kong, in particular for cross industry and cross country applications.

5.3.3.5 For the implementation of EDI transmission with Chinese content, special attention should be given to issues like availability of various Chinese character coding schemes (e.g. BIG 5, GB), variations between the simplified and traditional Chinese

characters, and the ability of networks and software to handle double-byte Chinese characters. These issues should be subject to further study.

5.3.3.6 Automatic Data Capture (ADC): In order to facilitate local and international trade, linear bar coding standard should be considered for cross industry application based on EAN/UCC standards in the FMCG industry. It is also necessary to monitor the standards development on ADC technologies, in particular on the work of ISO/IEC JTC1/SC31 on Automatic Identification and Data Capture, and to consider any suitable standards requirements in the future.

5.3.3.7 Smartcard: As regards the smartcard technology, it is expected that different standards will be used for various industries and applications due to the rapid change and development of the technology. On balance between the consumers’ inconvenience due to incompatibility of different standards and commercial innovation, it may not be necessary to set any standards at applications level for various types of card technologies. Taking into account that ISO has defined fundamental structure for contact type of smartcard (ISO 7816) and individual smart card developers have used this standard as a basis to create their own products, ISO 7816 should be used as a fundamental standard to provide a common interface on connectivity and communication at the physical and electrical layer.

5.3.4 Education

5.3.4.1 In view of the fact that school students are eager to learn IT and use IT to learn, the Government should, in broad consultation with relevant advisory groups and the public, formulate suitable empowerment and enablement programmes as part of primary and secondary education. The objective of such programmes is to provide an interactive, more interesting and effective alternative to traditional way of learning. It would also help cultivate students’ interest in learning both in schools and at home. The theme of these programmes should be the use of IT as a learning tool across subjects, rather than technical details which could be learned in computer studies as a standalone subject.

5.3.4.2 To facilitate the implementation of the proposed programmes and help school principals and teachers get ready for the change, it is suggested that computer networks linking all schools should be promoted. Teachers should have access to more shared PC resources and Internet. At the same time, change leadership training should be offered to school principals and suitable training on IT should be provided to teachers. In the medium term, applications and education programme for empowering and facilitating teachers to deliver 25% of the curriculum via the Information Infrastructure should be implemented.

5.3.4.3 Advanced infrastructure is already in place in the universities and there is a general acceptance of the need to employ new technologies in teaching and learning around the campus. It is recommended that the experiences of the university could be taken as a reference in promoting IT applications in primary and secondary schools.

5.3.5 Community

5.3.5.1 Building on the fact that the home PC market penetration is reasonably high and is growing very fast and that Internet access is popular in Hong Kong, the Government should continue to increase the awareness of the public on the development of the Information Infrastructure and promote the use of computer as a powerful tool for information access and encourage self-learning.

5.3.5.2 In the long term, the establishment of virtual communities or Information Society gateways should also be promoted. Such virtual communities should link up community facilities such as schools, libraries, community centres, museums, district offices, housing offices, post offices, hospitals and community clinics. In terms of public health care system, it is recommended that remote interactive medical diagnosis / telemedicine and home-caring services should be developed in the long term.


5.4.1 Regulatory Framework

5.4.1.1 IIAC Members note that the current regulatory framework applicable to FTNS operators has already provided a sound basis upon which any more specific regulatory requirements in respect of the HKII may be developed. The principles enshrined in the current regulatory framework in fact provide extensive guidance on all aspects of regulation and the development of the broadband framework will most likely involve the application of the FTNS principles.

5.4.1.2 While the existing regulatory framework for FTNS is aimed to create and maintain a regulatory environment conducive to the investment in and development of the physical infrastructure in Hong Kong, certain aspects of it need to be reviewed and further developed in order to ensure that the framework is effective to address new issues arising from the development of the Information Infrastructure. Examples of such new issues are those related to convergence of technologies and the re-definition of the universal service obligations.

5.4.1.3 Furthermore, with the liberalisation of the external services sector, the regulatory implications in relation to the development of the Information Infrastructure and measures to safeguard fair competition should be fully examined.

5.4.1.4 An Effective Regulatory Framework to Promote Fair and Effective Competition: It is recommended that the current regulatory framework should be reviewed and refined, where appropriate, for application to the HKII to deal with the abuse of dominant position and anti-competitive behaviour effectively. Moreover, all restrictions limiting competition in infrastructure and services should be reviewed as soon a possible. Besides, the current interconnection regime should be reviewed and refined, where appropriate, as the basis for the regime to be applied to the HKII to facilitate competitive entry by new entrants into the market.

5.4.1.5 Open and Non-discriminatory Access to the Information Infrastructure: Open and non-discriminatory access should be provided to the Information Infrastructure by developing appropriate policies that encourage increased access by Hong Kong people to

diverse sources of information and entertainment in all media and which encourage the provision of a wide diversity of content in all media.

5.4.1.6 A single regulatory framework appropriate and applicable for all operators should be implemented which would imply lifting unequal conditions for access. It would also ensure that conditions for network access and service use be guided by the principles of transparency and non-discrimination, complemented by practical rules for dispute resolution and availability of a speedy remedy for abuse of dominance.

5.4.1.7 A Stable and Flexible Regulatory Environment: It is suggested that a pro-competitive and technology-neutral regulatory environment should be created, through regulatory and/or legislative reform, to maximise consumer choice, to provide fair access to all levels of the Information Infrastructure, and to stimulate infrastructure development, the introduction of new services, and the wider dissemination of information. It is also proposed that one body should regulate all transmission media and another all content in respect of taste and decency if such regulation is considered necessary. There should not be a distinction between any form of network based on functional grounds.

5.4.1.8 Scope of Universal Service: The scope and affordability of universal service should be reviewed so that the universal service requirement can be brought in line with the requirements of the Information Society.

5.4.1.9 Encouragement of Private Investment: Barriers to private investment in the infrastructure should be identified and removed, and policies and regulations should be developed to improve investment incentives in both growing and mature telecommunications and information markets. The applicable laws, regulations, and other legal rules governing the provision of telecommunications and information services and equipment should be reviewed for possible barriers to private investment. Any exclusivities for circuits and services should be terminated as soon as possible and opened to competition. Tariffs should be rebalanced (i.e. not held artificially below cost) and cross-subsidies removed as far as practicable so that services are priced in a way that reflects their cost of provision.

5.4.1.10 In-Building Cabling Systems in Support of High Capacity Communication Systems: As discussed in paragraph 4.3.2.16, the lack or inadequacy of access facilities (equipment rooms, ducts, risers, conduits, etc.) for telecommunications cabling in the existing buildings of Hong Kong is a significant barrier to the extension of the information infrastructure to the end-users. At present, under the Telecommunication Ordinance, although the statutory right of access for network installation has been provided for, there is no mandatory requirement for adequate access facilities to be provided. To overcome these barriers, telecommunications legislation should be amended such that the provision of access facilities meeting prescribed standards is a mandatory requirement. As regards existing buildings, due to physical constraints such as space limitation, it may not be feasible to carry out retrofitting to provide the access facilities to the prescribed standards. For such buildings, access to the existing access facilities and in-building wiring to all network operators on a fair and non-discriminatory basis should be made mandatory. Existing legislation and licence conditions should be enforced, and amended where necessary, to achieve this goal.

5.4.2 Co-ordination of Standards

5.4.2.1 The standards setting process should be industry-led, but the Government should provide maximum support as the facilitator, co-ordinator and promoter. In order to enable interoperability and compatibility of networks, equipment and applications within or across different sectors in Hong Kong and to promote international co-operation on standards, a better co-ordination of Information Infrastructure standards is necessary. One option is all IT standards should be centrally co-ordinated by ITBB for telecommunications, broadcasting as well as information and computing standards including areas like Chinese character coding, Electronic Data Interchange, Electronic Commerce, Smartcards, etc. Standards reference databases should be kept for access by the general public. However, standards enforcement should be minimum as far as possible under a regulatory framework which could efficiently safeguard potential safety hazards, interference of normal operation and anti-competitive behaviours. Base on operational experience within Hong Kong and overseas experience, ITBB may consider setting up an co-ordinating agency to focus on the standards issues in due course.

5.4.2.2 The Government should facilitate and empower the industry to represent Hong Kong in international standards development forums and activities. It should also take a leading role in promoting the adoption of standards by becoming a user or requiring the use of the same standards.

5.4.3 Promotion and Support of IT Research and Development Activities

5.4.3.1 It is observed that in most developed countries including South Korea, Taiwan and Singapore, funding for R&D activities constitutes about 1-3% of the country’s Gross Domestic Product (GDP), roughly half of which is from the public sector. In view of the GDP in Hong Kong, it is considered that public funding for R&D activities, both in general and IT specific, is disproportionately small. In the long term, insufficient funding for R&D activities would undermine the overall competitiveness of Hong Kong.

5.4.3.2 At present, there are different sources of funds supporting R&D activities in IT including research grants provided by the University Grants Committee (UGC/RGC) as well as the Industry Support Fund (ISF), Services Support Fund (SSF), Applied R&D Scheme (AR&DS) and the Co-operative Applied R&D Scheme (CARDS) administered by the Industry Department.

5.4.3.3 However, since each of the above funding mechanism has its own set of selection criteria and limited funding, not all promising innovative advanced R&D projects in IT can secure funding support. For instance, projects submitted to the UGC/RGC must be academically oriented, deliverable and publishable. The UGC/RGC is hence considered not suitable for industry or commercial oriented projects. Since the ISF sponsors projects in seven areas, namely biotechnology, electronics, general, IT, metals, textiles & clothing and plastics, a limited proportion of funding is allocated to IT R&D projects. As a result, many promising projects were rejected by the ISF in the past. As regards the SSF, only projects which are beneficial to the service industry would be eligible to apply. Therefore, it is not suitable for advanced R&D IT projects which are not related to the service industry. Although the AR&DS and CARDS are set up for supporting advanced R&D projects in product or service development, the stringent application criteria have discouraged applications in the past.

5.4.3.4 Since advanced R&D activities are essential for making Hong Kong a leader, not a follower, in the information world through improving the quality of products and services as well as the insights of the professionals in the IT industry, sufficient funding should be provided to promising advanced IT R&D projects. Several alternatives have been identified for improving the situation, such as clarifying the purpose of individual funds, making the dissemination of applications more open, modifying some of the rigid application criteria, injecting more financial resources into the funds and setting up a separate R&D fund for IT related projects. The relevant funding authority should look into the matter and consider the alternatives as soon as possible so as to prevent Hong Kong from lagging behind in the development of IT applications and products.

5.4.4 Promotion of Public Awareness

5.4.4.1 From the study in the Information Infrastructure development in other countries, it is noted that general enthusiasm towards computer and related technologies and applications of the public is one of the facilitator for rapid Information Infrastructure development. Such enthusiasm has yet to be built up in our society. Therefore, efforts should be stepped up to promote the benefits of IT applications in our Government, education institutions, business sector and the community at large. Intensive promotion on how IT could make life easier and more productive should be targeted on groups which have not yet applied IT as extensively as they should have in their daily endeavours. These target groups include SMEs, school children, teachers and housewives. If we can cultivate a “IT culture” in our society, the resistance to using and investing in new technology will be reduced and hence help speed up the development of the HKII in a demand-driven manner.

5.4.4.2 The HKII Exposition and Conference and other public exhibition and fora of this kind have proven to be effective in increasing public awareness of the benefits of IT. It is therefore recommended that such public exposition and fora should continue to be organised in future.

5.5 Establishment of an Advisory Body under the Information Technology and Broadcasting Bureau

5.5.1 As demonstrated in Section 4, Hong Kong has the physical infrastructure and potential to fully develop its Information Infrastructure and different sectors in Hong Kong have already started to explore the opportunity IT can bring about. In order to ensure that the Information Infrastructure developed in different sectors will be interconnected and interoperable and to speed up the development, it is recommended that an advisory body should be established under ITBB to co-ordinate the development of the Information Infrastructure in policy areas outside the ambit of ITBB, including education and manpower, finance, trade and industry as well as transport. To ensure that Hong Kong would continue to grow as a well balanced Information Society, the proposed advisory body should be branched into sub-committees to focus on the development of the Information Infrastructure in terms of the physical infrastructure, applications as well as facilitation and support in accordance with the recommendations as outlined in Section 5.2 to 5.4.

5.6 International Co-operation

5.6.1 International co-ordination in the development of the Information Infrastructure is necessary but not sufficient to maintain Hong Kong’s existing position as a

world-class financial and trade centre in this Information Age. Hong Kong must work with the rest of the world to build on its existing position in the conventional commercial world and develop itself into a regional and international settlement hub for financial services; information hub; as well as sales, marketing and order processing hub in the e-commerce regime. To achieve this, it is important to promote international co-operation and exchange in the development of physical infrastructure, applications as well as facilitation and support activities relating to the Information Infrastructure. Exchanges between government agencies and private IT companies in Hong Kong with their counterparts in other countries should be encouraged.

5.6.2 In the area of standardisation, Hong Kong government should continue leading our participation in standardisation activities initiated by the following international and regional organisations -

(a) The International Telecommunication Union (ITU) which is a specialised agency of the United Nations to deal with telecommunications matters. Hong Kong has been participating in various technical forums, conferences and study group meetings dealing with standards issues related to radio spectrum management, new wireless communication systems, satellite communication, broadcasting services and international telecommunication;

(b) The Asia-Pacific Telecommunity (APT) which is a regional inter-governmental organisation to foster co-operation on telecommunications matters in the Asia-Pacific region. Hong Kong has joined one recent initiative to investigate a scheme for developing regional co-operation and teamwork in standardisation; and

(c) The Asia-Pacific Economic Co-operation (APEC) which is a regional forum comprising Asia-Pacific economies with a primary goal of promoting open trade and practical economic co-operation. Hong Kong has active participation in its Telecommunication (TEL) Working Group to develop a Mutual Recognition Arrangement (MRA) of telecommunication equipment testing and certification to facilitate trade among APEC economies.

5.6.3 Apart from official involvement in international standards activities, there are also industry led participation in international standards organisations such as the International Standards Organisation (ISO) and International Electrotechnical Commission (IEC), as well as industry organisations like the GSM MoU Association, ATM Forum, Digital Audio Visual Council (DAVIC), Internet Engineering Task Force (IETF), etc. on various telecommunication as well as information and computing standards issues which are of concern to the local business and academic sector.

5.6.4 In terms of international co-operation in the area of applications, the following may be considered -

(a) to participate in APEC’s Asia Pacific Information Infrastructure (APII) Testbed for Interconnectivity and Interoperability to develop applications such as tele-education, telemedicine and collaborative research;

(b) to participate in APEC’s Video Conferencing and Collaboration Systems over APII Testbed to develop transitional real-time multimedia applications over the interconnected domestic broadband testbeds;

(c) to participate in APEC project on Public Key Authentication Framework to study the effect of digital signatures, its policy implication, and the establishment of a Certification Authority;

(d) to participate in the APEC project on Health Care Applications and Telemedicine with a view to establishing new areas of development co-operation among APEC economies, focused on multimedia health information and education applications for on-line deployment on the APII;

(e) to join the APT Study Group on New Services to study multimedia applications, international development of ITS (Intelligent Transport System) and VICS (Vehicle Information & Communication Systems) and Intranet and other network-enabled applications;

(f) to participate in the Internet II testbed initiated by the National Science Foundation of the U.S. and participated by researchers around the world to conduct experiment and construct prototypes for future multimedia services and applications for the development of the next generation Internet; and

(g) to participate in the World-Wide Web Consortium (W3C) to create working prototypes and conduct research on applications in the World-Wide Web as well as support the setting up of a host of W3C in Hong Kong.

5.6.5 Besides participating in international fora, it is also recommended that local IT community should continue to organise international exhibition and conference to facilitate business and academic exchange between local and international experts.

5.7 International Promotion

5.7.1 From the IIAC studies on regional and global developments in the Information Infrastructure, it is found that some of our neighbouring countries have been actively promoting their intention of developing themselves as regional or international telecommunications hub. Understanding that Hong Kong has the physical infrastructure and determination to be one of the regional and international telecommunications hubs, the IIAC recommends that more effort should be made to promote the IT strengths of Hong Kong on a global level. Global recognition of our competitive strengths will attract international investment in Hong Kong and purchase of services from Hong Kong, which will in turn provide further financial and manpower input for the development of the HKII. Besides participating in conferences and exhibition in other countries, organising international IT events in Hong Kong will also help promoting Hong Kong.

5.8 The Need for Further Studies

5.8.1 As the Information Infrastructure affects all walks of life and its development is a long and continuous journey, the IIAC has, in its first year of operation, focused its work on fact finding about the present status of the HKII and identify key issues for further

studies. The above findings and recommendations are by no means conclusive and exclusive.

5.8.2 In order to follow up the issues identified by the IIAC and in the Pilot Study, it is recommended that a more comprehensive study should be conducted. Such comprehensive study can on one hand examine in greater detail how to build on our existing strengths and overcome challenges in each specific area. The findings of the comprehensive study could then be used as the pointers for relevant public and private bodies to plan and develop the Information Infrastructure in their respective areas. On the other hand, the follow up study can also serve to monitor the progress in both public and private sectors and evaluate the effects of the implementation of the recommendations made.

5.8.3 It is recommended that further studies be done in the following areas -

(a) convergence of telecommunications and broadcasting;(b) establishment of a security infrastructure;(c) development of electronic commerce;(d) IT applications in the SMEs;(e) IT applications in education; (f) review of existing regulatory framework for FTNS for application to the

HKII;(g) redefinition of universal service;(h) Chinese character coding; and(i) promotion of a demand-driven IT culture.

6. CONCLUSION AND RECOMMENDATIONS

6.1 The IIAC concluded that Hong Kong has built a good physical infrastructure, started developing applications in different sectors and begun to strengthen the facilitation and support for further development of the Information Infrastructure. To prepare Hong Kong for the challenges and opportunities offered by the Information Age, the IIAC recommends the following -

The Need for a Vision Statement(a) It is recommended that ITBB takes on as one of its early tasks the drawing up of a

vision statement for developing Hong Kong into an Information Society, including the development of the Information Infrastructure. (5.1.1)

(b) If possible, the vision statement should also be accompanied by an action plan with target dates on implementation of the major milestones in the development of the HKII. (5.1.3)

Physical Infrastructure(a) The interfaces of the broadband networks should be open and be accepted world-

wide. (5.2.1.1)(b) The development of various broadband technologies in the local loop should be

allowed. (5.2.1.1)(c) Open and fair access to commercial residential buildings should be facilitated.

(5.2.1.2)(d) In view of the increasing convergence between telecommunications, broadcasting,

computer and consumer electronics, the physical wirings, sockets and other interfacing facilities for different telecommunications, cable TV, communal TV and satellite TV connections should be revisited. (5.2.1.3)

(e) Additional standardisation work in the areas of advanced telephone services, data communication and mobile communication is required. (5.2.1.4)

ApplicationsGovernment(a) It is suggested that a whole-of-government info-communications system should be

developed. (5.3.2.1)(b) It is recommended that electronic information access and form/application submission

services by the Government should be established. (5.3.2.1)

BusinessElectronic Commerce(a) It is recommended that an infrastructure for electronic commerce be set up to allow

efficient local and international trade, supported by a stable and flexible pro-competition regulatory framework. (5.3.3.2)

(b) Consideration should be given to the establishment of one or more Certification Authorities, including a Public Key Infrastructure. (5.3.3.2)

(c) International technical standards should be adopted to ensure security of transactions trading over open networks. But it may not be necessary to mandate a single standard. (5.3.3.3)

(d) Close monitoring of technologies and standards for security techniques, electronic payment systems, security services infrastructures and electronic copyright management system is required. (5.3.3.3)

Electronic Data Interchange (EDI)(a) The United Nations/EDI for Administration, Commerce and Transport

(UN/EDIFACT) standard is recommended. (5.3.3.4)(b) Linear bar coding standard should be considered. (5.3.3.6)(c) It is necessary to monitor the standards development on ADC technologies. (5.3.3.6)

Smartcard(a) It may not be necessary to set any standards at applications level for various types of

card technologies. (5.3.3.7)(b) ISO 7816 should be used as a fundamental standard. (5.3.3.7)

Education(a) The Government should, in broad consultation with relevant advisory groups and the

public, formulate suitable empowerment and enablement programmes as part of primary and secondary education. (5.3.4.1)

(b) It is suggested that computer networks linking all schools should be promoted. (5.3.4.2)

(c) Teachers should have access to more shared PC resources and Internet. (5.3.4.2)(d) In the medium term, applications and education programme for empowering and

facilitating teachers to deliver 25% of the curriculum via the Information Infrastructure should be implemented. (5.3.4.2)

(e) It is recommended that the experiences of the university could be taken as a reference in promoting IT applications in primary and secondary schools. (5.3.4.3)

Community(a) In the long term, the establishment of virtual communities or Information Society

gateways should also be promoted. (5.3.5.2)(b) It is recommended that remote interactive medical diagnosis / telemedicine and home-

caring services should be developed in the long term. (5.3.5.2)

Facilitation and SupportRegulatory FrameworkAn Effective Regulatory Framework to Promote Fair and Effective Competition(a) It is recommended that the current regulatory framework should be reviewed and

refined, where appropriate, for application to the HKII. (5.4.1.4)(b) All restrictions limiting competition in infrastructure and services should be reviewed

as soon a possible. (5.4.1.4)(c) The current interconnection regime should be reviewed and refined, where

appropriate, as the basis for the regime to be applied to the HKII. (5.4.1.4)

Open and Non-discriminatory Access to Information Infrastructure(a) Open and non-discriminatory access should be provided to diverse sources of

information and entertainment in all media. (5.4.1.5)

(b) A single regulatory framework appropriate and applicable for all operators should be implemented. (5.4.1.6)

A Stable and Flexible Regulatory Environment(a) It is suggested that a pro-competitive and technology-neutral regulatory environment

should be created. (5.4.1.7)(b) It is also proposed that one body should regulate all transmission media and another

all content in respect of taste and decency. (5.4.1.7)

Scope of Universal Service(a) The scope and affordability of universal service should be reviewed. (5.4.1.8)

Encouragement of Private Investment(a) Any exclusivities for circuits and services should be terminated as soon as possible

and opened to competition. (5.4.1.9)(b) Tariffs should be rebalanced and cross-subsidies should be removed as far as

practicable. (5.4.1.9)

In-Building Cabling Systems in Support of High Capacity Communication Systems(a) Telecommunications legislation should be amended such that the provision of access

facilities meeting prescribed standards is a mandatory requirement. (5.4.1.10)(b) As regards existing buildings, access to the existing access facilities and in-building

wiring to all network operators on a fair and non-discriminatory basis should be made mandatory. (5.4.1.10)

Co-ordination of Standards(a) The standards setting process should be industry-led, but the Government should

provide maximum support as the facilitator, co-ordinator and promoter. One option is all IT standards should be centrally co-ordinated by ITBB for telecommunications, broadcasting as well as information and computing standards. (5.4.2.1)

(b) Standards enforcement should be minimum as far as possible under a regulatory framework which could efficiently safeguard potential safety hazards, interference of normal operation and anti-competitive behaviours. (5.4.2.1)

(c) The Government should facilitate and empower the industry to represent Hong Kong in international standards development forums and activities. It should also take a leading role in promoting the adoption of standards by becoming a user or requiring the use of the same standards. (5.4.2.2)

Promotion and Support of IT Research and Development Activities(a) Several alternatives have been identified for improving the situation, such as

clarifying the purpose of individual funds, making the dissemination of applications more open, modifying some of the rigid application criteria, injecting more financial resources into the funds and setting up a separate R&D fund for IT related projects. (5.4.3.4)

Promotion of Public Awareness(a) Efforts should be stepped up to promote the benefits of IT applications. (5.4.4.1)(b) Intensive promotion on how IT could make life easier and more productive should be

targeted on groups which have not yet applied IT as extensively as they should have in their daily endeavours. (5.4.4.1)

(c) It is recommended that public exposition and fora on IT should continue to be organised in future. (5.4.4.2)

Establishment of an Advisory Body under the Information Technology and Broadcasting Bureau(a) It is recommended that an advisory body should be established under ITBB to co-

ordinate the development of the Information Infrastructure in policy areas outside the ambit of ITBB. (5.5.1)

International Co-operation(a) Exchanges between government agencies and private IT companies in Hong Kong

with their counterparts in other countries should be encouraged. (5.6.1)(b) It is recommended that Hong Kong should participate in fora and activities on

Information Infrastructure organised by international and regional organisations. (5.6.2 -5.6.4)

(c) It is suggested that Hong Kong should continue to organise regional and international exhibition and conference on Information Infrastructure. (5.6.5)

International Promotion(a) It is recommended that more effort should be made to promote the IT strengths of

Hong Kong on a global level. (5.7.1)

The Need for Further Studies(a) It is recommended that a more comprehensive study should be conducted on the

HKII. (5.8.2)(b) It is recommended that further studies be done in the following areas -

(1) convergence of telecommunications and broadcasting;(2) establishment of a security infrastructure;(3) development of electronic commerce;(4) IT applications in the SMEs;(5) IT applications in education; (6) review of existing regulatory framework for FTNS for application to the

HKII;(7) redefinition of universal service;(8) Chinese character coding; and(9) promotion of a demand-driven IT culture. (5.8.3)

6.2 With the joint effort of the public and private sectors, we believe that Hong Kong would be able to develop a world class Information Infrastructure which will increase our productivity and competitiveness as well as improve our quality of life.

ANNEXES

Annex A: List of Members of the Information Infrastructure Advisory Committee

Annex B: Terms of Reference and List of Members of the Task Force on Regulatory Framework

Annex C: Terms of Reference and List of Members of the Task Force on Applications

Annex D: Terms of Reference and List of Members of the Task Force on Technical Standards

Annex E: A Summary of Findings from Overseas Visits

Annex F: List of Topics Studied by the Task Force on Technical Standards

Annex G: Executive Summary of the Report of the Task Force on Technical Standards

Annex H: Glossary of Technical Terms

Annex I: Matrix of Information Infrastructure Applications

Annex J: Executive Summary of the Report of the Task Force on Applications

Annex K: Existing Regulatory Framework

Annex L: Executive Summary of the Report of the Task Force on Regulatory Framework

Annex M: An Inventory of Identified Standards

Annex N: A Model of Public Networks in Hong Kong

Annex O: Projects on Promoting IT Applications within Government and the Community initiated by the Government and Related Organisations

Information Infrastructure Advisory Committee(as at 28 February 1998)

List of Members

ChairmanMr Anthony S K Wong Director-General of Telecommunications

Office of the Telecommunications AuthorityHong Kong SAR Government

Ordinary MembersMr Anthony Au President, Hong Kong Information Technology Federation

(representing Hong Kong Information Technology Federation)

Mr Simon Y K Chan Chairman, Hong Kong Telecommunications Users Group(representing Hong Kong Telecommunications Users Group)

Mr Alistair Grieve Deputy Chief Executive, Hong Kong Telecommunications Ltd and Managing Director, Hong Kong Telecom International Ltd(representing Hong Kong Telecom International Ltd)

Mr Leslie Harris President, New T&T Hong Kong Ltd(representing New T&T Hong Kong Ltd)

Mr K H Lau, JP Director of Information Technology ServicesInformation Technology Services DepartmentHong Kong SAR Government

Mr Dennis Lui Managing Director, Hutchison Telecommunications (HK) Ltd(representing Hutchison Telecommunications (HK) Ltd)

Mrs Agnes Mak President, Hong Kong Computer Society(representing Hong Kong Computer Society)

Mr Charles Mok General Manager, HKNet Co Ltd(representing Internet Service Providers licensees as a group)

Mr Hubert Ng Chairman, Telecom Association of Hong Kong(representing Telecom Association of Hong Kong)

Mr Stephen T H Ng Chairman and Managing Director, Wharf Cable Ltd(representing Wharf Cable Ltd)

Mr Brian Stevenson Chairman, Hong Kong Coalition of Service Industries(representing Hong Kong Coalition of Service Industries)

Mr Peter Tsang Chief Executive, New World Telephone Ltd(representing New World Telephone Ltd)

Prof Edward Yung Head, Department of Electronic Engineering, City University of Hong Kong

Annex A

(representing Hong Kong Institution of Engineers)

Mr Norman Yuen, JP Deputy Chief Executive, Hong Kong Telecommunications Ltd and Managing Director, Hong Kong Telephone Co Ltd(representing Hong Kong Telephone Co Ltd)

Prof Samuel Chanson Associate Head, Department of Computer Science/The Hong Kong University of Science and Technology

Prof Cheung Kwok-wai Professor, Department of Information Engineering/The Chinese University of Hong Kong

Prof Francis Chin Head, Department of Computer Science/The University of Hong Kong

Mr Kenneth Fang, JP Chairman, Hong Kong Productivity Council

Prof Charles Kao Honorary Professor in Engineering & Former Vice-Chancellor, the Chinese University of Hong Kong

Mr Stephen Lau Privacy Commissioner for Personal Data

Dr James Liu Chief Executive Officer, Hong Kong Industrial Technology Centre Corporation

Mr John S Y Tse Deputy Director (Information Systems), Hospital Authority

Mr K K Yeung Deputy Managing Director, Hong Kong Air Cargo Terminals Ltd

Alternate MembersDr W K Chan Secretary-General, Hong Kong Coalition of Service Industries

(representing Hong Kong Coalition of Service Industries)

Mr Cheng Ka-hang Director of Network Development, Hong Kong Telephone Co Ltd(representing Hong Kong Telephone Co Ltd)

Mr John Daly Council Member, Hong Kong Information Technology Federation(representing Hong Kong Information Technology Federation)

Mr A M Dixey Assistant Director, Information Technology Services Department (representing Director of Information Technology Services)

Mr Keith Harrison Director of International, Hong Kong Telecom International Ltd(representing Hong Kong Telecom International Ltd)

Mr Tony Hau President, Mobile Services Provider Group, Telecom Association of Hong Kong(representing Telecom Association of Hong Kong)

Ir Alfred Ho Group Manager, Hong Kong Telecom(representing Hong Kong Institution of Engineers)

Mr Cyrus Hui Managing Director, AsiaNet (HK) Co Ltd(representing Internet Service Providers licensees as a group)

Mr Daniel Lai Vice-President, Hong Kong Computer Society(representing Hong Kong Computer Society)

Ms Mei Po Lee Director, Legal, Regulatory & Corporate Affairs, New T&T Hong Kong Ltd (representing New T&T Hong Kong Ltd)

Mr John Markwell Director of IT & Technology, New World Telephone Ltd(representing New World Telephone Ltd)

Mr Peter Wong Fixed Network Director, Hutchison Telecommunications (HK) Ltd(representing Hutchison Telecommunications (HK) Ltd)

Mr Samuel Wong Corporate Development Director, Wharf Cable Ltd(representing Wharf Cable Ltd)

Dr John Ure Centre of Asian Studies, University of Hong Kong(representing Hong Kong Telecommunications Users Group)

SecretaryMiss Sharon Ho Administrative Officer (Regulatory), OFTA

Task Force on Regulatory Framework

Terms of Reference

To advise IIAC on the following -

a) examination and adoption of policies and legislation on the regulation of telecommunications networks and services so as to foster markets and technological developments in support of the Information Infrastructure;

b) creation of a regulatory environment which promotes competition, maximises community interests and consumer choice, protects individuals’ right, provides fair access to networks, and stimulates infrastructure development and the introduction of new services and the wider dissemination of information;

c) the scope of providing access to the Information Infrastructure, in the most affordable manner and with the widest availability possible, and the necessary funding mechanism; and

d) identifying areas of regulation outside the field of telecommunications where regulation has the scope to inhibit or to promote the use of the infrastructure and the development of applications, and to make recommendations as to how these areas of regulation may be changed in order to promote maximum use of the Information Infrastructure.

List of Members(as at 28 February 1998)

Convenor : Mr M H Au Senior Assistant Director/OFTADeputy Convenor : Mr Y K Ha Assistant Director/OFTASecretary : Mr Eric Lam Senior Controller Telecommunications/OFTA

Members

Mr Anthony Au President, Hong Kong Information Technology Federation

Mr Chan Ka-yiu, Garmen

External Affairs Director, Wharf Cable Limited

Dr W K Chan Secretary General, Hong Kong Coalition of Services Industries

Mr John Daly Council Member, Hong Kong Information Technology Federation

Mr Michael D Gertler Hong Kong Telecommunications Users Group

Mr David Grover General Counsel, Hutchison Telecom (HK) Ltd

Miss Saphina Ho Manager, Legal Affairs, Regulatory & Carrier Affairs, New World Telephone Ltd

Mr Alfred Ho Vice-Chair, Group 3 (Information)/Hong Kong Institution of Engineers

Annex B

Prof Joseph Hui Department of Information Engineering, Chinese University of Hong Kong

Mr Dermot Keilthy General Manager, Regulatory Analysis, Hong Kong Telecom Ltd

Mr W K Kwok, Kenneth Assistant Chief Executive Officer & Company Secretary, Asia Television Limited

Mr Daniel Lai Vice-President, Hong Kong Computer Society

Dr Lam Pun-lee Asst Professor, Department of Business Studies/Hong Kong Polytechnic University

Mr Lee Kheng-joo Committee Member, Hong Kong Internet Service Providers Association

Mr Robin McLeish Deputy Privacy Commissioner

Ms Mimi Lee Principal Assistant Secretary/Broadcasting, Culture and Sport Bureau

Mr Daniel Ng Chairman, Hong Kong Internet Service Providers Association

Mr Eric Spain Hong Kong Institution of Engineers

Ms Celina Teh General Manager, Regulatory & Policy Affairs, New T&T Hong Kong Ltd

Mr P F Tsui Vice-Chair, Hong Kong Institution of Engineers/Information Technology Division

Dr John Ure Centre of Asian Studies, The University of Hong Kong

Mr Adrian Walker-Smith Chief Trade Practices Officer, Consumer Council

Mr Jolly Wong Past Chair, Hong Kong Institution of Engineers/Information Technology Division

Alternate Member

Dr Ronald Chung Senior Trade Practices Officer, Consumer Council

Annex CTask Force on Applications

Terms of Reference

To advise IIAC on the following matters -

a) identification of the community demands for Information Infrastructure applications including business sector, Government, public bodies and individual members of the public;

b) identification of factors which foster, and those which hinder, the development and promotion of Information Infrastructure applications in Hong Kong and recommend measures to leverage the former and to address the latter;

c) identification of local research and development efforts in developing Information Infrastructure applications; and

d) identification of proposals for community-wide pilot projects.


Convenor : Mr John Tse IIAC Member/Hospital AuthorityDeputy Convenor : Mr K S Wong Assistant Director/OFTASecretary : Mr T F So Chief Telecommunications Engineer/OFTA

Members

Mr Brian Chan Director of Operations and Process Engineering, Contactica (Asia)

Mr Hubert Chan Executive Committee Member, TAHK

Mr Ringo Chan Chief Editor/IT Magazine

Prof Samuel Chanson IIAC Member/Dept of Computer Science, HKUST

Ms Cindy Cheng HK General Chamber of Commerce

Mr Raymond Cheng Vice President, HK Computer Society

Dr Stephen Cheung General Manager/Electronic Division, HK Productivity Council

Prof Francis Chin IIAC Member/Dept of Computer Science, HKU

Dr Cyril Chow Research Director/HK Policy Research Institute Ltd

Mr Jerome Day, Jr Director, Computing & Telecom Services Centre, HK Baptist University

Mr John Daly Council Member, HKITF

Mr Alan Dixey Assistant Director, ITSD

Mr Todd Dutkin Assistant General Manager, New World Telephone

Ir Alfred Ho Vice President, HKIE/ Chair, Group 3 (Info), HKIE

Ir Anthony Kwan Chair, HKIE/ITD

Mr William Kwan Senior Commercial Manager, Wharf Cable

Prof Horace Ip Prof and Head/Dept of Computer Science, City University of Hong Kong

Dr Charles Lam Convenor of Consumer Education Working Group, UCAC

Mr Tony Lam Assistant Privacy Commissioner

Mr Y T Lam Deputy Director (Admin.), Urban Services Dept

Mr James Lau Vice President, Citicorp Global Technology Infrastructure - HK

Mr Gary Leung Chairman/Pacific Technology Group

Dr Karl Leung Assist Prof/Dept of Computing, HK Polytechnic University

Dr William Lo Managing Director, IMS

Ms Anna Lin Chief Executive/HK Article Numbering Association

Mr Charles Mok IIAC Member/Secretary, HKISPA

Mr Robert Neely Chief Executive, Electronic Commerce China Limited

Mr Daniel Ng Chairman, HKISPA

Mr Larry K C Ng AD(IS), Education Department

Mr Eddie Paterson General Manager, Corporate Affairs/New T&T

Mr P W Pong Managing Director/Oracle

Mr L K Tsang Head, Department of Computing Studies, Shatin Technical Institute

Dr Miranda Tse Chairman/The British Computer Society (HK Section)

Ir P F Tsui Chairman, HKIE/ITD

Dr John Ure Alternate Member, IIAC/Associate Professor, School of Business, HKU

Mr Tony Wong Director of Business Development, Hutchison Telecom

Dr C K Wong Managing Partner/UniTech Technologies

Mr Mathias Woo ad personam basis

Mr Nicholas Yeung Deputy Controller (Corporate Affairs), ATV

Mr W C Ying Senior Computer Officer/The British Computer Society

Task Force on Technical Standards

Terms of Reference

To advise IIAC on the following matters -

a) standards on high-speed information delivery, switching, and control;

b) standards on information coding, storage, compression and security, authentication and access control;

c) standards on network-to-network and terminal-to-network interface;

d) standards on information conversion, storage, retrieval, presentation, classification and management;

e) enforcement and review of the technical standards adopted; and

f) any other standards matters relating to the development of the Information Infrastructure in Hong Kong.


Convenor : Prof K W Cheung IIAC Member/The Chinese University of Hong KongDeputy Convenor : Mr A M H Wong Assistant Director/OFTASecretary : Mr T Y Chan Chief Telecommunications Engineer/OFTA

Members

Mr Ignatius Chan Telecoms Manager, The Hong Kong Jockey Club

Mr Cheng Che-hoo Exco Member, Hong Kong Internet Service Providers Association

Mr Dominic Cheng Council Member, Hong Kong Information Technology Federation

Mr K H Cheng Director of Network Development, Hong Kong Telecom

Dr James Fok Deputy Executive Director, HK Productivity Council

Mr K C Fong Assistant Chief Executive Officer, Asia Television Limited

Mr Gerard Hadfield Senior Manager, Broadband iTV Project, Hong Kong Telecom IMS

Mr Brian Ho Assistant General Manager, New World Telephone Ltd

Ir Raymond Ho Vice Chairman of Hong Kong Institution of Engineers/Information Technology Division

Mr Anthony Kwan Chair, Hong Kong Institution of Engineers/Information Technology Division

Mr Matthew Lam Deputy Director, Network Division, New T&T Hong Kong Limited

Annex D

Ms Anna Lin Chief Executive, HK Article Numbering Association

Mr Kenneth Ng Director of Network Engineering, Contactica (Asia) Ltd

Mr John Siu General Manager - Advanced Technologies & Fundamental Planning, Wharf Cable Limited

Professor P C Wong Department of Information Engineering, The Chinese University of Hong Kong

Mr Peter Yip Director of Fixed & Paging Networks, Hutchison Telecom (HK) Ltd

Annex E

A Summary of Findings from Overseas Visits

Visit to Japan

While attending a conference in Japan, staff of OFTA visited the Ministry of Posts and Telecommunications (MPT) and the Nippon Telegraph and Telephone Corporation (NTT) in late July 1997. At the meeting, staff of MPT and OFTA had a discussion on the report entitled “Vision 21 for Info-communications” published by the Telecommunications Council’s Communications Policy Committee under MPT in June 1997. The report outlines the policies to be promoted as Japan approaches the 21st century and the specific socio-economic image that would result. The report urges the Japanese Government to further promote competition in the telecommunications market, the digitalisation in broadcasting and the convergence of telecommunications and broadcasting. In terms of Information Infrastructure, the report sets out a schedule to establish a digitised network by 2010 and to develop various specific applications in the Japanese Government and community services by the same year. It also recommends the Japanese Government to support creative research and development activities, promote globalisation and set up reviews on current legal system and consultation systems in order to adapt to the Information Age. Moreover, the report provides a future outlook for the first part of the 21st Century in terms of economic growth, employment structure, household spending on the Information Infrastructure and quality of life.

Visit to Singapore

In March 1992, the Singapore National Computer Board announced the IT2000 vision which sees Singapore as among the first in the world with an advanced nation-wide Information Infrastructure which will connect computers in virtually every home, office, school and factory. The realisation of Singapore ONE, which is a national high-capacity network based on Asynchronous Transfer Mode (ATM) switching and optical fibre technologies, will be a major achievement in Singapore’s move towards IT2000. The pilot network and services of Singapore ONE was launched in June 1997 with more than 400 households connected to the network at that time.

With a view to conducting field study on the background, present situation and future target of development of the Information Infrastructure in Singapore, the IIAC study group visited Singapore from 30 September to 2 October 1997. The study group visited the Telecommunication Authority of Singapore (TAS), National Computer Board (NCB), National Science & Technology Board (NSTB), 1-Net Singapore Pte Ltd., Singapore Telecommunications Ltd., Singapore Cable Vision Ltd., and the Edge Consultants Private Ltd.. It is observed that Singapore adopts a top-down government-led approach. Government agencies play a pro-active role and act as a catalyst in promoting and developing the Information Infrastructure. The Information Infrastructure development in Singapore is technology pushed or supply driven.

There is a clear division of work among the relevant ministries and government agencies and their work is co-ordinated by the National IT Committee in Singapore on which

the heads of these ministries and agencies sit. In terms of technical standards, Singapore adopted an open attitude towards the selection of standards and international or industry standards are always the first choice whenever possible. For the development of relevant new IT standards, the experience of the Singapore National Information Technology Standards Committee Singapore would be a valuable reference.

In terms of opportunity for co-operation between Hong Kong and Singapore, some of the applications provided or to be provided by Singapore One, including entertainment, education, healthcare and videoconferencing, are of common interest. There are opportunities for Singapore and Hong Kong to co-operate in the development of these applications. It may also be possible to set up trial links using ATM technologies to test the applications. Regarding IT technical standards, the requirements and situation of Hong Kong and Singapore are quite similar. There are some areas in which both parties may share the experience and the results of development. Further co-ordination between the two parties will help identify the areas of co-operation.

Visit to Malaysia

After visiting Singapore, the IIAC study group went to Malaysia on 3-4 October 1997 to learn more about the Multimedia Super Corridor (MSC). The MSC, 15 km wide and 50 km long, starts from the Kuala Lumpur City Centre and extends down south to the site of the Kuala Lumpur International Airport which is scheduled to be opened in 1998. The MSC is a government driven project to achieve the national vision 2020, a national agenda which sets out specific goals and objectives for long-term development in Malaysia. The policy direction is given directly by the Prime Minister himself while the implementation is carried out by the specifically created Multimedia Development Corporation (MDC), a government owned agency. The study group visited MDC as well as Oracle (MSC) Ltd in Malaysia.

It is observed that as MSC is a new infrastructure yet to be built, time and efficiency are two of the most important challenges which Malaysia faces. To overcome these challenges, Malaysia thus sets up the one-stop shop MDC to cut red-tapes, speed up the process of turning concepts into plans and co-ordinate government and private effort.

In terms of location and positioning, it is interesting to note that Malaysia has confined the geographical location of the MSC, as opposed to developing it into a nation-wide Information Infrastructure. It is clear that Malaysia sees the MSC as the means not only for transforming the country into a knowledge/information based country but also for improving its competitiveness within the region and its international standing.

Although the physical infrastructure of the MSC is not yet in place, the process through which the Malaysian develops the physical infrastructure, applications and related standards is worth to be highlighted. By establishing working groups which make recommendations for the development of different applications and calling for request for proposal (RFP) on the detailed implementation plans, the Malaysian Government has successfully secured the active participation of the private sector and provided sufficient transparency in the bidding process. As such, private local and international IT companies will have more confidence in the development of the MSC and hence more likely to increase their investment in the project. As regards regulatory framework, the Malaysian’s attempt to develop Cyberlaws is also note worthy.

Visit to the United States of America

To study the experience of the United States of America (U.S.) in the development of the Information Infrastructure, especially latest ones which have not yet been documented and those related to the Internet, high speed networks and wireless networks, the IIAC study group visited the U.S. from 18 to 21 November 1997. The study group visited the R&D facilities of Tyco Submarine Systems Ltd and Lucent Technologies in New Jersey as well as MIT Lab for Computer Science and the Commonwealth of Massachusetts in Boston, Massachusetts. In Washington DC, the study group had discussions with representatives from the Federal Communications Commission (FCC), the Office of Science and Technology Policy (OSTP), Department of Commerce (DoC), Office of Management of Budget (OMB), National Science Foundation (NSF), National Institute of Standards and Technology (NST) and International Business Machine (IBM).

It is observed that in the U.S., there is clear direction and strong leadership from the Presidential level. It is equally important to invite the participation of the relevant parties, including government agencies, private sector and the public, at the initial stage of Information Infrastructure policy formulation. The US Government believes in market-led philosophy, plays a minimal interfering role and avoids undue restrictions. However, it gives strong support in terms of leadership and funding of R&D in the Information Infrastructure.

As regards education, it is noted that while the U.S. Federal Government subsidises the laying of the required infrastructure, schools have the autonomy to decide what IT equipment and applications they need.

Cyberspace is like other form of space and the impact of the Information Infrastructure development, sometimes referred to as Information Revolution, is not very different from that of the Industrial Revolution. Therefore, the U.S. chooses not to over-react to the coming Information Age. Existing values, systems and laws, with appropriate modification and extension, will be applied to the Cyberspace. There is no need to create an entirely new set of rules for the game.

In terms of the security in the Information Infrastructure, there seems to be a general view in the U.S. academic and private sectors that cryptography should not be regulated. Public Key Infrastructure should be operated by a private organisation, rather than government, but with regulation. Views have been expressed that the certificate issuing party should bear some liability if the key is used in a transaction. The issuing party may thus want to limit its liability by restricting the usage of such key. As a result, a person or an entity may have multiple certifications for different purposes.

List of Topics Studiedby the Task Force on Technical Standards

Standardisation Process (for Network Standards)

1. Define the standardisation procedures for telecommunication networks & equipment in adoption of :

a) international standards (ITU/ISO/IEC, e.g. network-to-network signalling system standard)

b) regional/national standards (ETSI/ANSI/China MPT, e.g. ISDN standards)c) de facto/emerging/evolving standards from industry forum/consortium (ATM Forum,

DAVIC, Bellcore, etc, e.g. Video On Demand standards)d) Non-open or conceptual standards supported by a few vendors (e.g. 56 kbps modem

standards)e) Proprietary standards (e.g. Calling Number Display over digital trunk with DTMF

signalling)

2. Principles and criteria for setting common telecommunications standards

3. Customer Premises Equipment (CPE) type approval / certification arrangement in Hong Kong

Broadband Network Standards

1. Definition of “Broadband Network” (transmission rate, types of network, etc)

2. Types of broadband technologies, existing standards available and current developmentsa) Switching technologies (e.g. cell relay, frame relay, packet switching, SMDS, B-ISDN)b) Transmission technologies (e.g. PDH, SDH, xDSL, PON, FTTH/FTTB, cable

modems/HFC, LMDS, broadband WLL)

3. What types of broadband technologies will be deployed in Hong Kong for the Information Infrastructure development ?

4. Identify standards applicable to Q. 3 for adoption in Hong Kong on the following aspects:- User to network interfaces (including definition of network demarcation point)- Network to network interfaces- Broadband intercarrier interfaces- Addressing scheme- Operations, Administrations and Management- Network Management

5. Building Access standards and code of practice to support broadband networks, including consideration on

- blockwiring for broadband services- TBE for O/E conversion

Annex F

- use of PON- network powering for live line

6. Physical network demarcation point for broadband user-to-network interface (e.g. should NT or set-top box be classified as CPE ?)

Network Inventory & Scenarios Development

1. Type of major networks / technologies (both Core & Access Network) to examine and include into scenarios.

2. Types of information appliances to be included into the network scenarios

3. Form an inventory list of existing network interface standards a) fixed networksb) wireless networks

4. Identify gaps in existing interface standards and recommend applicable common standards

a) fixed networksb) wireless networks

5. Coexistence and migration issues from narrowband to broadband access

6. List out existing and future network configurations

7. List out existing standards and future issues on local Information Infrastructure interconnection to International II (e.g. international ISDN connection, u/A conversion)

8. Other issues for narrowband access to the Information Infrastructure (e.g. safety, security, reliability)

9. Home Network/Intelligent Home - Future scenario, relevant interface standards and technical requirements/framework for interconnection with different networks and types of appliances in residential & commercial building

Chinese Character Coding

1. Review of the present Chinese character code standards

2. Study of the Chinese character repertoire with emphasis on inclusion of “Hong Kong characters” which may be unique in Hong Kong

3. Migration of local coding schemes for Chinese characters to international standards

4. Mechanism and procedures for submission and inclusion of new Chinese characters- with possible restriction (not prohibition) on the creation of randomly-generated,

meaningless or personally used Chinese characters in Hong Kong

5. Any need for a formal administration body for Chinese character standards in Hong Kong

EDI & EDI Security

1. To identify existing major international standards on EDI

2. To study the international EDI developmenta) EDI related international organisationb) Level of adoption in different countriesc) Future direction

3. To identify existing standards of EDI in Hong Kong

4. To identify and recommend the specific sub-sets of EDI standards which are most suitable for common implementation in Hong Kong (e.g. for small-medium enterprise)

5. To study the current EDI development in Hong Konga) To identify existing major playersb) Needsc) Future direction

6. To identify existing global and local EDI security standards, techniques and methodologies

7. To identify EDI security requirement in external communicationa) Authenticationb) Confidentialityc) Non-repudiation

8. Any need for a formal administration body for EDI standards and issues in Hong Kong

Media Format & Compression

1. ISO MPEG video compression standards

2. ITU “H” series standards for videoconferencing and video telephony

3. ITU “G” series standards for audio compression

4. Digital audio standards for broadcasting

5. Format and compression standards for graphics, images and text

Internet Protocols & Service Elements

1. Internet core standards (e.g. TCP/IP, SMTP, UDP, HTTP, HTML, PICS)a) inventory takingb) service elements for common user applications (e.g. electronic mail, file transfer,

voice)

2. Directory services

3. Security services

4. Network management and system administration issues

5. Future of Internet Development in Hong Kong

Public Information Systems

1. Technical standards for library systemsa) library catalogueb) inter-library loanc) orderingd) other library services

2. Technical standards for healthcare systemsa) Healthcare information modelling and medical recordsb) Healthcare terminology, semantics and knowledge basec) Healthcare communication & messagesd) Medical imaging and multimedia applicationse) Healthcare security, privacy, quality and safety issues

Digital Broadcasting and Video On Demand

1. Technical standards for video on demand

2. Technical standards for digital terrestrial/satellite TV broadcast

3. Technical standards for digital sound broadcast

4. Technical standards for digital cable TV

5. Technical standards for terrestrial and satellite data broadcast

Electronic Commerce and Homebanking/Homeshopping

1. Homeshopping2. Security Standards for Business Trading

3. Electronic Banking and Payment Systems

4. Public Key Infrastructure

5. Electronic Copyright Management

6. Electronic Catalogue

Automatic Data Capture and Smartcards

1. Technical standards of the following Automatic Data Capture (ADC) technologies for applications in logistics & distribution, point of purchase/use, manufacturing, healthcare and services:a) Bar codeb) Biometricsc) Magnetic striped) OCRe) Radio frequency

2. Technical standards of Smart Cards for applications in electronic fund transfer, transport, retail and services (e.g. medicare, telephony)a) Physical standardb) Electrical standard

c) Communication interface standard d) Security standard e) Data access standard

Executive SummaryReport of the Task Force on Technical Standards

1. Under the Information Infrastructure Advisory Committee (IIAC) which was set up by the Office of the Telecommunications Authority (OFTA), the Task Force on Technical Standards (TFTS) was established to study and make recommendations on related technical standards issues for the future development of the Hong Kong Information Infrastructure (HKII). The work of the TFTS was based largely on industry inputs and voluntary participation by organisations and individuals in Hong Kong during the period May 1997 to January 1998. This report summarises the major findings and recommendations on technical standards aspects for consideration by the community and the relevant government authorities in co-ordinating the development of the HKII.

2. Owing to constraints of time and resources, the TFTS focused the study on the following subjects which are considered to be more important:

Network Aspectsa) Standardisation Process for Telecommunication Standardsb) Broadband Network Standardsc) Network Inventory and Scenarios Development

Information and Middleware Aspectsd) Chinese Character Codinge) Electronic Data Interchangef) Media Format and Compressiong) Internet Protocols and Service Elements

Applications Aspectsh) Public Information Systemsi) Digital Broadcasting and Video On Demandj) Electronic Commerce and Homebanking / Homeshoppingk) Automatic Data Capture and Smartcards

3. The TFTS has made a number of recommendations on adoption of standards and suggestions for further study and consideration. Some highlights are as follows:

(a) Standardisation Process (for telecommunication standards)A generic standardisation flow chart and criteria/considerations for adopting different categories of telecommunication standards which will be applied to both narrowband and broadband networks & services were proposed. International standards are recommended to be adopted in Hong Kong as far as possible. Standards making should consider the end-to-end interoperability of equipment connected to different networks. Detailed study and setting of telecommunication standards for both broadband and narrowband equipment and services are recommended to be followed up by the Telecommunications Standards Advisory Committee (TSAC) established under the Office of the Telecommunications Authority (OFTA).

(b) Broadband Network Standards

Annex G

Five key technology areas on Cell Relay Switching, Synchronous Optical Transmission Systems, Digital Subscriber Loop and Cable Modem, Ethernet based Local Area Network, and Building Access Standards and Practices were identified for study. A list of prevailing and developing standards on broadband networks and equipment was identified for consideration of adoption in Hong Kong. Optical fibre based systems are recommended to be the backbone of future broadband networks due to technological maturity and the densely populated environment in Hong Kong. The bottleneck for the building of advanced broadband networks was considered to be the telecommunications and broadcasting facilities inside buildings. Recommendations were made to improve building access for providing broadband network services.

(c) Network Inventory & Scenarios Developments A network model was proposed for the physical Information Infrastructure and an inventory of standards used for different kinds of fixed/mobile networks and international interconnection in Hong Kong was compiled. It was recommended that common standards should be considered for user-to-network and network-to-network interfaces of data networks in Hong Kong.

(d) Chinese Character Coding Standards It was recommended to adopt ISO 10646 (Universal Multiple-Octet Character Set) for Chinese character coding standards in Hong Kong and to study migration of local coding scheme (BIG-5) to this international standard. In view of the need for some specific Cantonese characters used in the local community, the group has identified a list of sources of such characters for submission to the ISO for inclusion in the future revision of the ISO 10646 standard.

(e) Electronic Data Interchange (EDI) It was recommended to adopt international standards for EDI services and EDI message security in Hong Kong based on the United Nations’ EDIFACT (EDI For Administration, Commerce and Transport) and ISO standards. It was recommended to follow the guidelines of EANCOM in the implementation of EDI. Further study should be made on issues related to the transmission of EDI messages with Chinese character content.

(f) Media Format and Compression Review was made on video compression and video conferencing standards which are considered to be more important for interoperability of equipment within and outside the territory. It was recommended to adopt international standards, i.e. ISO/IEC developed MPEG standards for video compression and ITU-T’s H.320 series of standards for video conferencing.

(g) Internet Protocols & Service Elements Inventory taking of core Internet standards was made and the standards for directory services and security services were studied. It was recommended that

the core Internet standards, in particular the Internet Protocol (IP), be a key protocol for applications to be run over different networks. The local Internet community should pay more attention to the standards development of Internet and consider to adopt technologies on security of electronic mail and electronic directory services.

(h) Public Information Systems An inventory of technical standards and major initiatives for library and healthcare information systems was taken. For healthcare systems, it was recommended to adopt the internationally accepted WHO ICD9CM (World Health Organisation International Classification of Diseases Version 9 with Clinical Modifications) and DICOM (Digital Imaging and Communications) standards in Hong Kong. For library systems, it was recommended to adopt a number of standards including ISO 2709 for bibliographic data interchange, ISO 7098 for romanization of Chinese characters, and ANSI Z39.50 for multiple online library catalogue and reference databases. Close monitoring of standards development on the concerned areas should also be maintained.

(i) Digital Broadcasting and Video On Demand (VOD)For digital broadcasting services, status reports on the developments of technologies and standards were prepared and its was recommended to urgently study the adoption of standards for digital audio and television broadcasting in Hong Kong. As for VOD standards, it was considered that there was not adequate technical information available especially from the potential providers of VOD programme services in Hong Kong. However, since the Government had already granted two VOD licences, it was recommended to consider the basic technical structure and standard requirements of set-top boxes (STB) for user to access different VOD service providers. The issue of customer terminal to access different digital broadcasting and narrowcasting services in the future should also be further studied.

(j) Electronic Commerce and Homebanking/Homeshopping Review was made on the technologies and standards related to homeshopping, electronic payment systems, electronic banking, security standards for electronic trading, public key infrastructure, electronic copyright management and electronic catalogue / product identity. It was considered that the standards development on the concerned areas should be kept under close monitoring and any standards to be adopted should be open and interoperable. In view of the importance and complexity of issues concerning the setting up of a public key infrastructure and certification authorities in Hong Kong, it was recommended for the government to fund a project to carry out more comprehensive and in-depth study on the subject.

(k) Automatic Data Capture (ADC) and SmartcardsA survey has been made on the standards and developments for Smartcards and ADC technologies. It was recommended to adopt the EAN/UCC standards for

linear bar coding for cross industry applications and to adopt ISO standards for the fundamental structure of contact type of Smartcards in Hong Kong.

4. Other technical issues arising in the course of study, which are not concerned with standardisation aspects, were also recorded and submitted as part of this report to the IIAC. Some suggestions were made on the role of government and private sectors in new technology developments, the need to improve network management and reliability in an information economy and the operation and administration of Internet which is considered to be an important part of the Information Infrastructure.

5. The recommendations of the TFTS were summarised in three high priority areas:

Recommendation 1The government should create a harmonious administration structure and take a proactive approach in co-ordinating standards related activities for the Information Infrastructure.

Recommendation 2The government should facilitate the development of advanced physical access infrastructure by adopting technical standards and other regulatory measures.

Recommendation 3The government should establish a Research and Development Fund to support the participation of international standards activities by local organisations, facilitate advanced service and technology developments related to the Information Infrastructure, and the technical development of new applications like electronic commerce over Internet.

6. The conclusion of the TFTS was that common standards should be used for the development of the Information Infrastructure as far as possible in order to enable open access, fair competition, interoperability and compatibility of equipment and applications. In the area of information and communication technologies required as building blocks for the Information Infrastructure, standards making should be industry driven as far as possible. Proper administrative framework for standards setting and promotion could accelerate the convergence of technology options and deployment of technologies in a cost effective manner. Standards enforcement should be minimum as far as possible, but some regulatory framework should be established to safeguard against potential safety hazards, interference of normal operation, anti-competitive behaviours, etc.

7. The TFTS proposed that the identified standards issues should be followed up by the new IT & Broadcasting Bureau with policy purview on information and communication technology aspects. There is a need for better co-ordination on standards for telecommunications, broadcasting and information & computing due to their increasing convergence. Furthermore, there should be more detailed study on an overall standards administration framework in Hong Kong.

8. Finally, the TFTS considered that there should be an on-going mechanism in place to co-ordinate various issues related to the development of advanced Information Infrastructure in Hong Kong, with participation by both the public and private sectors.

Glossary of Technical Terms

Asynchronous Transfer Mode (ATM)A technique for high speed data transfer through digital switches and transmission equipment. ATM uses a basic data unit which has a fixed length and is called a cell. The process is sometimes called Cell Relay. It supports all kinds of communication services including voice, data and image.

Automatic Data Capture (ADC)A broad range of technologies that automate data collection in business processes like ordering, back office operations, manufacture, distribution, retail sales, etc. The commonly known ADC applications include bar codes, biometrics, machine vision, magnetic stripe, Optical Card Readers, voice recognition, smart cards, and Radio Frequency Identification.

Cell Relay SwitchingSee Asynchronous Transfer Mode.

Certification Authority (CA)A trusted third-party organisation or company that issues electronic certificates for creating digital signatures and public-private cryptographic key pairs. The purpose is to ensure business can be done electronically. The role of the CA in this process is to guarantee that individual party which is granted with the unique certificate, in fact, is who he or she claims to be. Usually, this means that the CA has an arrangement with a financial institution, such as a credit card company, which provides it with information to confirm an individual’s claimed identity. CA is a critical component in data security and electronic commerce because they guarantee that the two parties exchanging information are really who they claim to be.

Cable ModemA modem designed to operate over coaxial cable networks operated by cable TV operators. Since coaxial cable can potentially support a very high speed data transmission, a cable modem can be used as a convenient means to support multi-users simultaneously with different types of communication services including high speed Internet, video on demand service, telephony, etc.

Digital Subscriber Loop (DSL)DSL refers to some new technologies that allow high speed data transmission over existing copper telephone wires in a short distance between a customer premise and the telephone exchange building (usually less than about 6 km). There are different schemes of DSL (xDSL) that offer data speeds of up to 32 Mbps from network to user and from 32 Kbps to over 1 Mbps data speeds from user to network.

Electronic Data Interchange (EDI)EDI is the electronic exchange of routine business transactions such as purchase orders and invoices using standardised message formats.

Ethernet based Local Area Network (LAN)

Annex H

Local Area Network (LAN) is a computer network that spans a relatively small area like within a single building or group of buildings. Most LANs connect workstations and personal computers which are able to communicate with each other and to share data and expensive devices like laser printer. Ethernet is the most popular physical layer LAN technology in use today which is based on the IEEE Standard 802.3 defined by the Institute for Electrical and Electronic Engineers (IEEE).

EANCOMEANCOM is a detailed implementation guideline of the international EDI standard (UN/EDIFACT) messages. Using a subset of UN/EDIFACT messages, EANCOM provides clear definitions and explanations which allow trading partners to exchange commercial documents in a simple, accurate and cost effective manner.

EAN/UCC StandardsStandards for electronic article numbering and bar coding that uniquely identifies a piece of goods for administration and logistics purposes.

FMCGA short form for “Fast Moving Consumer Goods”.

Local Multipoint Distribution Service (LMDS)LMDS is a microwave technology that utilises frequency spectrum in the 23 GHz to 30 GHz range. It is primarily deployed for two way broadband wireless communication and has potential to support data speed at the range of 1 Gbps for transmitting voice, video and fast data to and from homes and businesses. There is currently no standard for LMDS.

Public Key Infrastructure (PKI)PKI is an open security system for supporting the operation of electronic commerce. It is a system of electronic certificates, Certificate Authorities, and other registration authorities that verify and authenticate the validity of each party involved in an Internet transaction. PKIs are currently evolving and there is no single PKI nor even a single agreed-upon standard for setting up a PKI. However, reliable PKIs are necessary before electronic commerce can become widespread.

Synchronous Optical Transmission SystemsFiber-optic based network equipment that can support high speed data transport. The two main standards for such transmission system are the Synchronous Digital Hierarchy (SDH) and the Synchronous Optical Network (SONET), which define transmission speeds from 51.84 Mbps up to 2.488 Gbps.

Type I InterconnectionType 1 interconnection refers to interconnection of two networks between gateways of the networks.

Type II Interconnection

Type II interconnection refers to interconnection of two networks at a customer building or local exchange so as to use a already installed short link in a competitor’s network to reach a customer.

Various Types of Digital Subscriber Line (xDSL)See Digital Subscriber Loop.

Video on Demand (VOD)Services for the provision of “television programmes” to homes on demand on a “point to point” basis which exclude the majority of services such as electronic transactional services, home shopping, home banking, tele-medicine, etc. over the future Information Infrastructure.

Annex I

Matrix of Information Infrastructure Applications

B - Business; M - Manufacturing; E - Education; G - Government; CEP - Community, Environmental and Personal; H - Health

Item Information Infrastructure Applications B M E G CEP H

1 Intranets and Extranets Yes Yes2 Electronic directories Yes Yes Yes3 Business-to-business electronic commerce Yes4 Retailer to consumer electronic commerce Yes Yes5 Electronic data interchange (EDI) Yes Yes Yes6 Electronic stock exchange trading Yes Yes7 CyberShopping / home shopping Yes Yes8 CyberCash / home banking Yes Yes9 Smart cards Yes Yes Yes10 Information search through Internet, e.g. literature and

other materialsYes Yes Yes

11 Communicating through email Yes Yes Yes12 Transferring files Yes Yes Yes13 Recruiting teachers and students Yes14 Collaborative work through the net Yes Yes Yes15 Interactive discussion through the net Yes Yes Yes16 Delivering lectures Yes Yes17 Telehomeworking / handing in and marking assignments Yes Yes18 Counselling Yes Yes19 Wide screen projection system connected to the instructor’s

computer and the InternetYes

20 Each seat has computer with multimedia capability and access to the Internet

Yes

21 Computers are served by a server with audio/video libraries and other software useful for teaching specific subjects

Yes

22 Connection to other electronic classrooms or lecture theaters Yes23 Filling and submission of various forms Yes Yes24 Online registration and course selection Yes Yes25 Announcements Yes Yes26 Inventory control Yes Yes27 Public / university / school library Yes Yes28 Online directories and floor plan Yes29 Staff and student records (restricted access) Yes30 Work flow control Yes31 Online music Yes Yes32 Implement Government wide email Yes33 Electronic access to Government information Yes Yes Yes34 Public healthcare/medical care system Yes Yes

Item Information Infrastructure Applications B M E G CEP H

35 Public archive, museum and cultural centres Yes Yes36 City guide Yes Yes37 Booking of tickets for public entertainment Yes38 Booking of cemeteries and crematoria slots Yes39 Membership applications Yes40 Voting and local democracy system Yes Yes41 Global emergency/security management system Yes Yes42 Building monitoring and management /intelligent

building systemsYes Yes Yes

43 Intelligent transport system Yes Yes44 Weather forecasting and information system Yes Yes45 Pollution prevention and control system Yes Yes46 Maritime information system Yes Yes47 Natural resources management system Yes48 Remote interactive medical diagnosis/telemedicine Yes Yes49 Remote monitoring of out-patients Yes Yes50 Cyberspace games Yes Yes Yes51 Cyberspace entertainment, e.g. movie Yes Yes Yes52 Teleworking / virtual office Yes Yes53 Personal information systems Yes Yes54 Personal learning and development Yes Yes Yes

Executive SummaryReport of the Task Force on Applications

Annex J

1. Executive Summary

(1) Information technology is profoundly changing the lifestyle of people in all walks of life. With the continuing drop in hardware and communications costs, computers are no longer limited to office use. They have become popular household appliances for communication, information gathering, learning, and receiving entertainment. There is no doubt that Hong Kong is being served by a first-class telecommunication network, but this does not preclude Hong Kong from planning for and developing the next generation of hardware infrastructure.

(2) The Task Force on Applications (IIAC-A) felt strongly that there is a lack of software infrastructure, i.e. the common supporting system of software and application interfaces. Unless action is taken, the existing gap between the optimum use of this information infrastructure and the provision of both applications and content will be further widened. Priority should also be given to interactive community applications and content. It is applications which bring home the benefits of the technology.

(3) The Task Force on Applications was established to report to the IIAC regarding the physical infrastructure that is necessary for the development and promotion of II applications in Hong Kong with the objectives of :

· maintaining and enhancing Hong Kong’s position as an information society in the global and regional competitive environment;

· stimulating economic growth, increasing productivity and creating new jobs;

· building up the professional and technical expertise required to support the development of a high technology industry in Hong Kong; and

· facilitating information access and information exchange among people in order to transform Hong Kong into a knowledge society and to improve the quality of life for the community.

The Way Forward

(4) Hong Kong is now confronted with the opportunities and the challenges accompanying the Information Age. While many of our neighbours are endeavouring to take advantage of information technology to create opportunities and cope with challenges, Hong Kong cannot afford to lag behind. It should invest today’s wealth to create tomorrow’s affluence, even though the road to an Information Society may be a long one.

(5) To support the delivery of II applications and to facilitate access to such applications, an effective and efficient information infrastructure is necessary. It is recommended that an information infrastructure be developed which will cater for the needs of II applications as proposed by our individual Working Groups. It is recommended that the following measures should be considered:

(a) Build up the legal framework and security systems to support electronic commerce and community access

A satisfactory legal framework and a trustworthy security system are of vital importance to the realisation of electronic commerce. Electronic commerce provides a cost-effective way of doing business. It is a world-wide trend for the business sector to develop in this direction. Proper use of this technology will greatly facilitate business transactions and stimulate economic growth. The Government and industry should collaborate to create an impartial, reliable and secure environment to facilitate doing business by electronic means. Overseas experience and techniques should be useful references for this purpose.

(b) Foster applied high technology research, technology transfer and investments

The Government should, in consultation with industry and the universities, identify suitable development areas and foster relevant research projects. This will attract the necessary expertise to fuel the development of a high technology industry and to nurture local talent to furnish the market with the required manpower. Government’s active support in this aspect will have a positive effect in inspiring the industry as well as the general public. Measures should now be considered to stimulate the growth of technology companies in Hong Kong and provide the capital necessary for Research and Development. Options should include incentives to attract investments of big businesses, transfer of technology and expertise, promotion of continuous IT professional education, and the establishment of a second stock exchange for venture capital for hi-tech, with reference to the NASDAQ exchange in the USA.

(c) Promote use of computers by the general public as a utility tool for information access and self-learning

Electronic information provided on the Internet is gaining popularity and is gradually replacing many traditional sources of information which are more expensive and less efficient. According to the survey by the Hong Kong Policy Research Institute (HKPRI) in December 1997, there were about 765 000 households with PCs installed and 18% of them are Internet connected with an average on-line time of 8.5 hours per week. However, almost half of these households with PCs installed were not productive users. Therefore, the Government should further promote the use of computers to the general public as a utility tool for information access and to encourage self-learning. Moreover, the public as IT users are to exploit existing IT services and ask for new services. This will create both the demand and supply of a community market for IT services and will steadily and surely help Hong Kong to evolve to a knowledge society.

(d) Implement empowering and facilitating programme for improving teachers and students learning in primary and secondary schools

The Educational Authorities should, in broad consultation with community advisory groups, devise suitable empowerment and enablement programmes as part of primary and secondary education. The theme of these programmes should be the use of computers and the Information Infrastructure, rather than emphasising technical details at this stage. Many youngsters now have access to computers, and their usage patterns are changing from playing computer games to information retrieval and personal communications. With suitable implementation, computers and the Information Infrastructure can provide an interactive and more interesting and effective alternative to traditional sources of information and learning, such as textbooks. Proper use of the Information Infrastructure would help students to cultivate their interest in learning both in schools and at home. The availability of teachers who are fully educated and qualified to promote this will also play a key role in the success of our efforts to achieve improved education through the use of IT. Suitable and extensive teacher education programmes should be provided for our primary and secondary school teachers.

(e) Develop a whole-of-Government info-communication systemMany government activities have a direct influence on the public and industry. Paper communications are still the major means within and between Government departments, resulting in both a lack of interdepartmental information flow and a segmentation of information-based services to the community. Though the use of computers in Government is common, however, many of its computers are not linked together or only linked within a Department. To improve its operational efficiency, the Government should implement a communications network with suitable mailing services and web/ data bases and extend it to embrace all Government and Government-funded bodies. This would greatly facilitate information flow within the Government and between the Government and community and help to re-invent Government by improving on its organisational effectiveness through IT-enabled process re-engineering.

(f) Government to take the lead to provide services by electronic meansWhereas II applications provided by the industry are market-driven, Government’s provision of community or other public services by electronic means will have an inspiring function. Offering services such as electronic library access, on-line reservation of recreation facilities, electronic directories, smart cards, remote medical diagnosis/healthcare to the public will provide convenience and stimulate the involvement of the public in the development of II.

Recommendations

(6) On the basis of the work carried out over the last year, the Task Force on Applications recommends that the next IT Applications advisory body should provide advice on the development of long-term strategic planning and shorter term agenda for action for the IT applications and information content industries. It is suggested

that priority be given to the following key applications. These applications are suggested for implementation either in the short term (within three years), or the medium term (within five years). All these indicate the need for Government policy in the provision of the broadband network services in a regulated, open and competitive market.

(6.1) Applications for Implementation in the Short Term(a) Extensive use of electronic commerce for local and international trade, enabled by a legal framework and Hong Kong Certification Authorities and associated Secure Directory.

(b) A whole-of-Government info-communication system. Electronic information access and form/application submission services by Government. Examples are public access point to Government Information, e-tax return , and smart cards.

(c) Computer networks linking all schools with shared applications and knowledge content.

(d) A Hong Kong Community Health and Welfare Information Network linking all services providers and users in healthcare and social welfare.

(6.2) Applications for Implementation in the Medium Term(a) Applications and education programme for empowering and facilitating teachers in the Educational System to deliver 25% of the curriculum via the Information Infrastructure.

(b) Virtual communities or information society gateways, linking community facilities such as schools, libraries, community centres, museums, district offices, housing offices, post offices, hospitals and community clinics.

(c) Remote interactive medical diagnosis/telemedicine and home-care services and the use of smart cards.

A New Advisory Body on Applications to complement the new Information Technology and Broadcasting Bureau (ITBB)

(7) As this Task Force on Applications (IIAC-A) has just completed the first stage of advisory work on customer and community applications, it is recommended that a new Committee on IT Applications be established and evolved from this IIAC-A within three months after the tenure of the IIAC-A. This is required to continue and expand the advisory role of IIAC-A to complement the executive role of the new ITBB.(8) It is strongly recommended that the ITBB should help to define and establish this new body in order to provide industry and expertise consultation for a long-term IT policy and strategy on IT Applications for Hong Kong.

(9) This report is now submitted to the IIAC main committee for consideration.

Annex K

Existing Regulatory Framework

Regulatory Issue Responsible Regulatory

Body

Legislation Limitation, if any, in

Competition

Removal of Barriers to Entry to be Considered

Comments

Fixed Telephony OFTA Telecommunication Ordinance

Moratorium of four licences to be reviewed in mid-1998

End moratorium

The Government will be reviewing the number of local FTNS operators by mid 1998.

Public Radiocommunication Service (PCS)

OFTA Telecommunication Ordinance

Number of licences limited by spectrum availability and capacity limited to narrowband

The licensing of broadband capacity

The mobile market is highly competitive. There are six independent public mobile radiotelephone services/ personal communications services operators operating a total of eleven digital systems. Broadband capacity will be available at the turn of the century.

External Circuits and Facilities

OFTA Telecommunication Ordinance

Exclusive licence previously held by HKTI until end-September 2006

End exclusivity

By agreement between the Government and HKT, HKTI has surrendered its licence on 31/3/1998 with service based competition commencing 1/1/1999 and facilities based competition commencing 1/1/2000.

Free-to-Air Television

Broadcasting Authority

Television Ordinance

Two licensees. Number of licensees subject to spectrum availability

The award of further licences

Subject to spectrum availability or more channels made available through technology development.

Regulatory Issue Responsible Regulatory

Body

Legislation Limitation, if any, in

Competition

Removal of Barriers to Entry to be Considered

Comments

Video-on-Demand Broadcasting Authority (Content)

OFTA (Transmission)


Telecommunication Ordinance

Two licences initially. To be reviewed in 1998.

Removal of restrictions on licensing

The Government will be reviewing in 1998 whether the limit on the number of programme services licence should be lifted.

Subscription Television

Broadcasting Authority


One licence only. To be reviewed in 1998.

The award of further licences

The Government will be reviewing in 1998 whether or not additional subscription television broadcasting licence should be issued.

Internet OFTA Telecommunication Ordinance

No limitation on number of licences

Not applicable

At the end of February 1998 a total of 120 Internet service providers were licensed to provide Internet access services.

Executive SummaryReport of the Task Force on Regulatory Framework

Background

Broadly speaking, the Information Infrastructure is a publicly accessible network capable of transferring large amounts of information at high speed between users. The Government recognises that the Information Infrastructure is developing at a rapid pace and Hong Kong must keep pace with it. The Information Infrastructure has a central role to play in the development of Hong Kong.

With its fully digitised telecommunications network - given its capability to transmit voice, image, text and video, the extent of its fibre optic coverage, the liberalisation of satellite facilities, the competitiveness of international access services, and the proposed liberalisation of the international gateway facilities, Hong Kong already has a sophisticated Information Infrastructure and is well on the road to achieving its objective of serving as the pre-eminent communications hub for the region now and into the 21st century.

The world is undergoing a technological revolution and entering the age of the Information Society. The combination of information technology and high speed communications is breaking down the traditional barriers to the movement of information (distance, location, time and volume) at an unprecedented rate. Information technology is becoming widely accessible and as a result a vast new range of applications and opportunities is arising. This is a sea of change which will revolutionise the lives of Hong Kong people and people abroad.

The impact of convergence on the development of the Information Infrastructure is very difficult to predict but is a key issue for consideration for Hong Kong and the global Information Society in general. There is no specific definition of convergence but it describes the increasing blurring of the distinction between telecommunications, broadcasting and communication between computers.

This Report provides a detailed discussion by the Task Force on the Regulatory Framework (RFTF) of the Information Infrastructure Advisory Committee of the issues associated with the appropriate and applicable regulatory framework for the successful development of the Information Infrastructure.

Section 2

In this section the RFTF attempts to define the Information Infrastructure. The general view is that the Information Infrastructure is an amalgamation of communications networks that uses a combination of new and existing telecommunications and information technologies to connect people to each other, to services and to information. It is envisaged that the Information Infrastructure will increasingly deliver multimedia and “broadband” services into homes, schools, workplaces, libraries and hospitals. The RFTF identifies a very broad market structure of the Information Infrastructure:

· Content Provision

Annex L

· Service Provision

· Distribution Networks

· Consumer Equipment.

Section 3

This section describes briefly the existing regulatory framework and market conditions in Hong Kong. It emphasises the fact that there is not yet a single regulatory framework in respect of the Information Infrastructure but the foundation of such a framework is contained in the existing telecommunications and broadcasting regulatory regimes. It points out that overall the current regulatory environment is highly competitive except certain areas which remain exclusive. However, such exclusivity will be reviewed shortly by the Government or will terminate by agreement.

Section 4

The RFTF identifies the objectives of the regulatory framework for the Information Infrastructure. These are:

· to promote the investment in and roll-out of network infrastructure;

· to promote the applications of the Information Infrastructure;

· to promote the dissemination of and access to diverse content over the Information Infrastructure; and

· to maximise community benefits in choice, quality, innovativeness and affordability.

It is acknowledged that the attainment of these objectives would lead to the improvement in the economy and prosperity of Hong Kong and the lives of Hong Kong people.

Section 5

The RFTF identifies the basic elements of the regulatory framework for the Information Infrastructure. Some of these are:

· a fair and effective competitive environment;

· the provision of open and non-discriminatory access to the Information Infrastructure;

· a stable and flexible regulatory environment;

· the provision of universal service; and

· the encouragement of private investment. The general view is that competitive safeguards should be implemented so as

to curb the abuse of power of a dominant operator, guard against anti-competitive conduct

and create a regulatory environment conducive to ensuring the continued growth of the Information Infrastructure.

Section 6

This section concerns non-telecommunications elements of the Information Infrastructure. The issues identified by the RFTF are the following:

· intellectual property rights;

· privacy;

· security and integrity of communications;

· issues related to electronic commerce; and

· content regulation of taste and decency.

The RFTF recommends that further studies on these areas should be undertaken by the Government departments and bureaux responsible for the subject matter under the co-ordination of the future policy bureau with overall responsibility on information technology.

Conclusions and Recommendations

Generally, the RFTF believes that the current regulatory framework applicable to FTNS operators provides a sound basis upon which to develop any more specific regulatory requirements in respect of the Information Infrastructure.

The recommendations of the RFTF include the following:

· Competitive safeguards including provisions similar to GC15 and 16 of the FTNS licences should be applied to all sectors of the Information Infrastructure.

· Appropriate policies should be developed that encourage increased access by Hong Kong people to diverse sources of information and entertainment in all media.

· A pro-competitive and technology-neutral regulatory environment should be created, through regulatory and/or legislative reform, to maximise consumer choice, to provide fair access to all levels of the Information Infrastructure, and to stimulate infrastructure investment and development, the introduction of new services, and the wider dissemination of information.

· A special task force to consider whether or not an expansion of a universal service obligation is necessary or appropriate for the Information Infrastructure and the scope of such expansion.

· Barriers to private investment in the infrastructure should be identified and removed, and policies and regulations should be developed to improve investment incentives

· in both growing and mature telecommunications and information markets.

Inventory of the Identified Standards

Table 1.1 - Major interfaces and standards for existing Public Switched Telecommunication Networks

Type of Network User Network Interface Standard Network to Network Interface Standard

Integrated Services Digital Network Services /Protocols /Physical InterfacesITU-T I-series, Q.850-Q.939ANSI T1.601HKTA 2014, 2015, 2021

MTP and ISUPITU-T Q.701-Q.710, Q.761-Q.767 HKTA 2202, 2203

Functions and information flowsITU-T Q.80-Q.87, Q.730-Q.737, Q.950-Q.957

Public Switched Telephone Network Direct Exchange Line (DEL)HKTA 2001, 2003, 2011

MTP and ISUPITU-T Q.701-Q.710, Q.761-Q.767 HKTA 2202

Direct Dialling In (DDI) LinesHKTA 2013

TUPITU-T Q.721-Q.724

Digital TrunksHKTA 2017, 2018

SCCPITU-T Q.711-Q.716

Calling Number DisplayBellcore SR-TSV-002476, TR-NWT-000031, TR-NWt-000575HKTA 2012

TCAPITU-T Q.771-Q.775

Calling Name DisplayBellcore TR-NWT-001188, SR-TSV-002476HKTA 2022Analogue Display Services InterfaceBellcore TR-NWT-001273, SR-INS-002461HKTA 2019PayphoneHKTA 2020, HKTA 2024

Data Communication over telephone network ITU-T V-series

- 76 -

Annex M

Table 1.2 - Major interfaces and standards for existing Data Networks

Type of Network User Network Interface Standard Network to Network Interface Standard

Telex ITU-T R.20 ITU-T R.101, U.1 and U.11

Digital Data Network Physical InterfaceV.24/RS232C, V.35, V.11, G.702

Physical InterfaceG.703Subrate multiplexingX.50

X.25 Packet Switching Network Physical InterfaceV.24/RS232C, V.35, V.11

Physical InterfaceG.703

Data TransferX.25 (synchronous)X.28 (asynchronous)

Data TransferX.75

Frame Relay Network (PVC) Physical InterfaceV.35, G.703

Physical InterfaceG.703

Data TransferITU-T Q.922 Annex AANSI T1.618Frame Relay Forum FRF.1.1

Data TransferITU-T Q.922 Annex AANSI T1.618Frame Relay Forum FRF.2.1

PVC Management ProceduresITU-T Q.933 Annex AANSI T1.617Frame Relay Forum FRF.1.1

PVC Management ProceduresITU-T Q.933 Annex A ANSI T1.617Frame Relay Forum FRF.2.1

Asynchronous Transfer Mode Network OFTA HKTA 2016ITU-T I.432ANSI T.646ATM Forum UNI 3.1

- Several non-compatible standards and no single standard has wide support.- No interconnection between different carriers' ATM networks so far in the world.

- 77 -

Table 1.3 - Other standards for existing Fixed Networks

Type of Standards Standards

Transmission Systems ITU-T G-series

ANSI T1.101-107 (SONET)

HKTA 2201.

Telecommunication management network (TMN) ITU-T M-series, Q.811 - Q.824.

Tones for use in national signalling systems ITU-T E.180

HKTA 2201.

Intelligent network ITU-T Q.1200 - Q.1290.

Miscellaneous: Numbering Plan

ITU-T E.163/E.164 (ISDN)

Number Portability

HKTA 2102.

- 78 -

Table 1.4 - Major interfaces and standards for existing Wireless Networks

Type of Network User Network Interface Standard Network to Network Interface Standard MiscellaneousGSM Digital Mobile Networks MS - MSC

GSM 04.08 Mobile Radio Interface Layer 3 Specification

MTP and ISUPITU-T Q.701-Q.710, Q.761-Q.767 HKTA 2202

Numbering PlanITU-T E.163/E.164 (ISDN)ITU-T E.212 (IMSI)ITU-T E.214 (MGT)

SCCPITU-T Q.711-Q.716TCAPITU-T Q.771-Q.775Intelligent Network (MSC-SCP)ITU Q.1218ETS 300 374-1MSC-SMSCGSM 03.40 Technical Realisation of the Short Message Service - Point to PointBSC-MSCGSM 08.08 MSC-BSS Layer 3 Spec.HLR/EIR - MSC/VLR/SCPGSM 09.02 Mobile Application Part Spec.MSC/VLR - HLR/EIR/MSC/VLRGSM 09.02 Mobile Application Part Spec.

CDMA Digital Mobile Networks TIA/IS-95A MS-BSC Standard for Dual Mode Wideband Spread Spectrum Cellular System

MTP and ISUPITU-T Q.701-Q.710ANSI T1.111, T1.113

Numbering PlanITU-T E.163/E.164 (ISDN)ITU-T E.212 (IMSI)

Chinese #1 Signalling (R2)SCCPITU-T Q.711-Q.716ANSI T1.112

TCAP

- 79 -

Type of Network User Network Interface Standard Network to Network Interface Standard MiscellaneousANSI T1.114Intelligent NetworkITU-T Q.1214&1218 / BellCore AIN 0.1 / TIA/IS41-D (WIN)PSTN Interface TIA/IS-93 & BellCore TR-NPL-000145BSC-MSCTIA/IS-634 MSC-BSC InterfaceMSC - HLR/VLR/MSCTIA/IS-41.X-C Cellular Radiotelecommunication Intersystem OperationsHLR - VLR/AC/SMCTIA/IS-41.X-C Cellular Radiotelecommunication Intersystem OperationsMS-BTS, BTS-BSC (A-bis)TIA/IS-93 Cellular Radiotelecommunication Ai-Di Interfaces Standard

Paging Digital code formatsITU-R Radio Paging Code RPC No.1POCSAG (Post Office Code Standardisation Advisory Group, BT, June 1978 and November 1980)ERMES (Europe)FLEX (Motorola Inc.)APOC (Phillips Telecom)

Trunked Radio SignallingMPT1327 from Department of Trade and Industry, LondonTETRA from Europe.

Table 1.5 - Major standards for existing interconnection with External Networks

- 80 -


Transmission Systems ITU-T G-series (Voice Encoding, PDH, SDH)

Leased Circuit ITU-T M10xx-series (Leased Circuit)

Satellite Intelsat IESS StandardsInmarsat Standards - A, B, MRegional Satellite (Asiasat)

Signalling ITU-T Q-series (CCS No. 5, No.7)

Radio and Microwave ITU-R F-series

Telex and Telegraph ITU-T F.69, F.31, M.800, M.850, R.101, S.1, S.18, T.50, U.1, U.11

Data Networks ITU-T X.50, X.85, X.121, X.400

Nomenclature ITU-T M.300 series, M.400, M.1010, M.1320, M.1400

Miscellaneous ITU-T E.170, G.103, M.560, M.1300, N.60

- 81 -

Table 2 - Major standards for future Broadband Networks


Asynchronous Transfer Mode (ATM) Technology

ITU-T I-series and Q-series Recommendations for Broadband ISDNATM Forum Specifications

Broadband Transmission Network SONET/SDH/PDHANSI T1.105-106 and Bellcore requirements for SONETITU-T G-series Recommendations for SDH and PDH

Local Access Networks Digital Subscriber LineHDSL (ANSI T1.403, Bellcore requirements for HDSL)ADSL (ANSI T1.413, ADSL Forum TR-001, Bellcore requirements for ADSL, DAVIC 1.0 part 8)VDSL (DAVIC 1.0 part 8)

Hybrid Fibre Coaxial (HFC)Bellcore requirements (GR-1089-CORE, SR-3904, SR-3770, GR-1222-CORE)DAVIC 1.0 part 8IEEE 802.14SCTE (Society of Cable Telecommunications Engineers)MCNS (Multimedia Cable Network System) ConsortiumCableLabs

Fibre-In-The-Loop (FITL)Bellcore requirements for FITL

Local Area Network (LAN) / Wide Area Network (WAN)

Ethernet (IEEE 80x series)IP over ATM (IETF RFC 1483, 1577, 1755)

Building Access Standards OFTA - Code of Practice for Access Facilities of Buildings (Sept 1995)EIA/TIA Specifications (TSB-36, TSB-40, TSB-67, EIA/TIA-568A)ATM Forum - Mid range physical layer specification for Category 3 UTP (Sept 1994)

- 82 -

A Model of Public Networks In Hong Kong

INTERNET

FTNS FTNS

PSTN/ISDN

GSM, TDMA,CDMA

TRUNKED RADIO

IICG & ISC

InternationalT

ransmission Facilities

Satellite

Submarine &land cables

Microwave

LOCAL INTERNATIONALCoreAccess

Direct Dial-In LineDTMF DDI LineISDN Primary Rate Access

TelexDigital Data LineX.25Frame Relay

Direct Exchange LineISDN Basic Rate Access

ITU-T No.7

ITU-T No.7

terminalcomputerrouterswitch

PABXremote access serverIVR

telephonemodemcomputerFax

mobile phone

radio terminal

USER

MPT 1327, TETRA

Twisted pair/ fibre

Wireless

Twisted pair/ fibre

PAGING

POCSAG, FLEXpager

Wireless

Wireless

CABLE TVhybrid fibrecoax

proprietaryset top boxTV

ATMCopper pair/Optical fibre

TelexDATA

FrameRelay

PMRS

PCS PMRS

PCSMOBILE

ITU-T No.7

ITU-T No.7

ATM

DDS

X.25

-, -,

- 83 -

Annex N

- 84 -

Annex OProjects on Promoting IT Applications

within Government and the Community initiated by the Government and Related Organisations

1. The Efficiency Unit

Government is keen to see the development and use of electronic information in Hong Kong and feels it should take a lead role. To that end a task force has been established, chaired by Mr. K. C. Kwong, the then Secretary for Treasury, to look at ways that Internet technology can best be exploited. The “Exploiting Internet Technologies in Government Programme” takes the following five tier approach:

Foundation Building including a Service-wide Stock Taking Exercise, Technological, Legal & Security Issues & Standards, Infrastructure, Equipment & Accessibility Review.

Government Home Pages including well designed pages & a coherent Information Locator Service, Improvement to existing Home Pages, Development of a comprehensive & informative Government Home Page.

Pilot Application Projects including GSD’s Procurement Services, OFTA’s licence applications, Lands Department’s Mapping Information Services, Labour Department’s Employment Services, ISD’s Press Library Services, IPD’s Trade Mark Services.

Strategic Business Review By Policy Area

Awareness Promotion including Exhibitions, Seminars, Demonstrations, Training & Skills Transfer.

Each project has a representative from the Efficiency Unit, Management Services Agency, ITSD and the respective User Department. The Efficiency Unit provides overall co-ordination, MSA looks after the business processes, ITSD the technology and the User Department ensures their requirements are fulfilled. External industry consultants have been retained to assist on a number of the projects.

Foundation BuildingThis project will review and recommend on internal Government Technology, Legal, Security and Standards requirements to support higher use of Internet based services. In regard to infrastructure, the project will recommend on networks, servers, security, standards and gateways. Although Star Internet currently provides the Government Internet server, a long-term strategy for operating the server(s) needs to be developed.Government Home Page Enhancement

The main Government home page has links to the home pages of about 60 Government Departments, but there is little consistency between them in either content or structure. Many home pages are not laid out to make best use of Internet. These home pages contain about 317 various application forms relevant to members of the public. In many cases where an enquiry or feedback mechanism is provided on a home page, there are no back end support processes to act upon the enquiry. All of the home pages essentially provide a mechanism for distribution of information with no facility to complete a transaction on line. For example, forms can be downloaded, but cannot be completed and returned electronically.

The project will look at:· Improve the synergy between home pages to make it easier to navigate and source

required information.· Collect all forms together in one place and use a common standard, Adobe

Acrobat, for downloading.· Identify most appropriate selection of forms to be available via Internet. Although

Government has a repertoire of about 5000 forms, not all are suitable or applicable for use on Internet.

· Develop a search engine.· Analyse current enquiries received via telephone and post the most frequently

asked questions, with answers, on Internet.· Develop processes to ensure enquiries and feedback are acted upon.

A consultant from Australia has been retained to assist with the project.

Pilot Application ProjectsThe five pilot projects outlined below have been selected to explore a number of different issues that need to be addressed, including:

· Two way transactions· Electronic payment and receipt of payments· Legal issues· Business processes· Security and authentication

GSD’s Procurement ServicesThis project will look at managing the tender process on line. It is intended that both Requests for Tenders and the responses will be handled electronically. Ultimately the intention is to move to electronic payment as well. The project which commenced in May 1997 has four months to complete a report with pilot implementation by end of 1997.

Tenders are issued to organisations that have pre-registered with GSD, so the project will essentially be working with a closed user group. Some issues to address are:

· Security of information· Authentication of tenderers

· Legal issues· Management of the electronic “Tender Box”· Business processes· Implement in-house or outsource

Lands Department’s Mapping Information ServicesThe Lands Department produces a wide range of maps required by a variety of commercial organisations such as utilities. Currently maps are available in paper format and the process to obtain the right map can be time consuming. As with the previous project, there is essentially a known user group that requires access to the Lands Department’s maps.

The project will review the feasibility of:· Digitising maps· Making them available via Internet· On-line payment. This will require use of credit cards, but Government currently

does not accept payments by credit cards!· Bandwidth required to download large image files

The project is likely to seek a partner to actively promote and market maps as a profitable line of business.

OFTA’s Licence ApplicationsThis project will examine the feasibility of issuing and receiving payments for licences via Internet. The project commenced in June with pilot implementation by end of 1997. The project will:

· Review the different types of licence to see which are most appropriate to be handled electronically.

· Trial will probably be with Amateur Radio, SMATV and Mobile Radio (e.g. taxis) licences.

· Review the definition of a licence - in some applications a licence must be displayed. If a licence is granted electronically, what should be displayed?

· Chinese language on computer, specifically, how to cope with peoples’ names that are made up of “customised” characters.

· Technology· Business Processes

Business Review by Policy AreaThis project will look at how Internet could be used to support the objectives of various Government Departments. The intention is to review at a Policy level rather than a Departmental level. Although the pilot policy areas have not yet been selected, two possible examples are:Health Promotion of preventative medicine, healthcare, list of registered

doctors, list and diagrams of poisonous trees / shrubs / animals, etc.

Education Take a wide perspective, more than just Education Department. Include such areas as Vocational Council and support for the disabled.

Awareness PromotionThe objective of this project is to promote awareness of Internet and its applications within Government, and to ensure that the necessary skills are developed.

2. The Trade and Industry Bureau

The Trade and Industry Bureau has a potentially lead role to play in helping the business community move to the Information Age. All sections of this bureau have a part - Trade Department, Industry Department, Customs and Excise, Intellectual Property Department, Hong Kong Trade Development Council, Hong Kong Productivity Council and the Consumer Council.

To a greater or lesser extent all of these Departments are currently involved in Information Technology through the development of trade, building capability within business through the provision of various technology centres and support funds and training.

However there is currently no specific focus on developing an “Information Infrastructure”.

2.1 Industry Department

The Industry Department plays a lead role in providing an environment for businesses in Hong Kong to develop and participate in the II market and is active in primary roles:· Development of Industry, Technology and Science Centres· Promoting the inward investment of organisations in Hong Kong· Funding and support of IT and software development through various industry

support funds.

The Industry Department has five main divisions as shown below with areas that will impact or influence the development of a Hong Kong Information Infrastructure shown:

Activities and functions related to development of IT in Hong Kong are as follows:

2.2 Industrial Estates

Under the auspices of the Industry Department, the Hong Kong Government has established a number of industrial parks and is currently in the planning stages for the development of a science park.

The objectives of these developments are to provide environments to foster the development of high tech manufacturing businesses in Hong Kong. Consistent with Government policy, there is no favouritism between local or offshore organisations.

Once established by the Government these organisations are spun off as Government Corporations.

2.2.1 The Hong Kong Industrial Estates Corporation“The Hong Kong Industrial Estates Corporation is a statutory body set up in 1977 to develop and mange industrial estates. It offers developed land at cost in its industrial estates to industries with new or improved technology and processes that cannot operate in multi-storey factory buildings. The Corporation facilitates the overall development of Hong Kong industry by broadening its base and upgrading technology levels.” The Hong Kong Industrial Estates Corporation is particularly interested in projects that involve:

Industry Department

QualityServices

DevelopmentSupport

TechnologyDevelopment

InfrastructureSupport

InvestmentPromotion

PR &Information

ITDC &Applied

ResearchCouncil

Industrial &ServiceSupportFunds

InformationTechnologyCommittee

APEC(Standards) HK

IndustrialTechnology

CentreCorporation

HKProductivity

Council

Techno-Economic& MarketResearchStudies

AppliedResearch &

DevelopmentScheme

Developmentof a Science

Park

Co-ordinationof APECActivities

· new or improved products· new or upgraded technology· high added value based on the use of local materials and manpower· products for which there is a strong demand from local industry· substantial contribution to Hong Kong’s exports· significant investment particularly in new machinery and equipment· employment at a higher level of skill

2.2.2 Hong Kong Industrial Technology CentreHong Kong Industrial Technology Centre Corporation is a statutory body set up by the Hong Kong Government in 1993. Its mission is to facilitate the promotion of technological innovation and application of new technologies in Hong Kong industry.

Incubation ProgrammeAs a unique programme in Hong Kong to help young high-tech companies grow, the Incubation Programme offers support and services in 5 specific areas:Infrastructure, Finance, Marketing, Support & Services Management, Technology

There are currently 40 incubatees with numbers expected to grow to 60 in 1998 and eventually 200. The incubation period is for three years and approximately 50% of incubatees are profitable. The programme includes a quarterly review with each incubatee to assess their progress and establish future directions. Hong Kong is ahead of many other countries with this type of facility and programme. In comparison, the USA has 550 incubators of which 30% are focused on high technology with an average of 17 incubatees per facility.

Technology Transfer ProgrammeThe Technology Transfer Programme provides a collection of services and activities to facilitate the promotion of technological innovation and application of technologies in Hong Kong industry. The programme provides and facilitates:· Promote the awareness of technology in Hong Kong and promote technology

excellence of Hong Kong aboard.· Technology Sourcing - provide latest technological trends and the rapid

exploitation of technology development and opportunities.· Facilitate the exchange and transfer of technology through seminars, conferences,

exhibitions and publications.· Technology Transfer - provide the infrastructure, knowledge and resources to

actualise the application of technology.

R&D Support & Services ProgrammeThe programme is designed to assist companies to reduce entry barriers and shorten the time to market. For meeting the challenges of high technology industry, such as the fast turnaround time, the need to access the best technological know-how and high entry costs for new companies and products, we have provided both the facilities and information to support R&D.Facilities Leasing

To lease office space, conference and exhibition facilities to technology related companies to promote synergy at the Tech Centre.

Technology Venture Assistance ProgrammeThe Technology Venture Assistance Programme was created to assist and support high technology start-up companies in their funding and finance needs. The programme’s activities include:

· The Seed Capital Fund & the Innovation Loan · Assistance in Government funding · Access to venture capital quarterly seminars · Annual High Technology Investment and Business Conference · Other financial consultation and support

TechLinkTechLink is an interactive database that facilitates the building of strategic business partnerships in the high-end technology arenas. It can facilitate the buying and selling of technologies and it provides a channel to source high value-added technology, products and joint venture partnerships.

2.2.3 The Science ParkThe Industry Department is planning the development of a Science Park to be established at Pak Shek Kok, Tai Po. The objectives of such a development are:· To play a catalytic role in supporting technology development and transfer in

Hong Kong.· Maintain Hong Kong’s competitive advantage over other cities.· Complement the SAR’s current enabling infrastructure.The project is expected to provide 7,000 new jobs in skill intensive areas and provide “quantifiable benefits” in the form of added and multiplier effects of HK$6.5 billion over the 15 year development period.

The park will provide an environment for research and development on high tech projects and capitalise on the skills and resources of Hong Kong’s Universities and the SAR’s links and relationship with the Productivity Council.

According to the current timeline the first building will be opened in 2001.

2.3 Investment Promotion

Industry Department operates a “One Stop Shop” for businesses planning to locate in Hong Kong. This organisation will facilitate an off-shore companies’ introduction to various Government Departments and utilities. The Industry Department is particularly interested in high tech manufacturing businesses with high added value. However, unlike other countries that actively seek out investors, but consistent with the Hong Kong Government’s policy of “positive non-intervention” the Industry Department does not take a proactive role. The Department also feels the need to be even handed in order not to upset other sectors of Hong Kong industry.

2.3.1 Consultative StudiesIn order to plan out areas of industry that may need support, the Industry Department conducts “Consultative Studies”.

A Consultative Study on the Software Industry was conducted in 1994 and led to the implementation of the following:· Establishment of the Software Industry Information Centre under the auspices of

the Productivity Council to provide support to small HK software companies including information on developments in the region. The Information Centre has been established for one year. A review will be conducted at the end of the second year to determine future actions.

· Establishment of the Cyberspace Centre at HKUST to promote the use of Internet in Hong Kong through holding seminars for local companies and exploiting Internet technologies that are useful to Hong Kong.

· Development of schemes to improve the quality of local software development. A series of quality awareness seminars were held, two developers were assisted down the path of ISO9000 accreditation and a software process improvement project has been started with 10 companies.

· Overseas promotion of Hong Kong’s software industry at Softworld ’97 in Vancouver in which 20 local companies participated.

A Consultative Study on “The formulation of strategies for promoting the use of IT in Hong Kong” is currently in progress. A contact has been let to consultants to conduct the study which commenced in November 1997 and is expected to be completed by January / February 1998. Objectives of the study are:

· Take stock of the current usage of IT within the local services industry, including an assessment of the technologies employed, extent of applications adopted, levels of investment and problems encountered.

· Assess the implications of technology developments with special reference to electronic commerce, Internet and Intranet.

· Examine the adequacy of local IT infrastructure, especially information superhighways.

· Research models and strategies adopted in other countries.· Identify opportunities for the local software industry.· Formulate a strategy for promoting the use of IT across all sizes of enterprises.

2.3.2 Project FundingThe Industry Department operates four sources of funding available to the community:

Industry Support Fund· Objective is to enhance the competitiveness of the local manufacturing industry.· Those eligible to apply for funding are industry support bodies, trade and industry

associations, higher education institutions, professional bodies and research institutes.

· The fund was established in 1994 and had a budget of $250m for 1996/97.

· Some of the IT related projects already approved are Multimedia Server for Video Distribution (CUHK), Software Process Improvement Programme (HKPC), Prototype Real-time MPEG2 Encoding System (HKU), Cyberspace Centre (HKUST) and Software Industry Information Centre (HKPC).

Services Support FundThe objective of the Services Support Fund is to provide financial support for projects that are beneficial to the development of HK as a service centre. Those eligible to apply for funding are: service support bodies, trade and industry associations, higher education institutions, professional bodies and research institutes. Funding of $50m was available in 1996/97.

Applied Research and Development SchemeThe objective of the Applied Research and Development Scheme is to provide financial support as a catalyst to encourage applied R&D activities in HK. Those eligible to apply for funding are companies incorporated under the Companies Ordinance which undertake local R&D. Types of projects are those that will contribute to product innovation, productivity growth, quality improvement or increased competitiveness of the local industry.

Co-operative Research and Development SchemeThe objective of the Co-operative Research and Development Scheme is to enhance the technological capability of and competitiveness of the local manufacturing industry by leveraging the expertise in tertiary institutions and research bodies in HK and China. Those eligible to apply for funding are companies incorporated under the Companies Ordinance in HK and must involve a researcher from a local tertiary institution and a researcher from China.

2.4 Trade Development Council

The Trade Development Council has a high level of Information Technology utilisation both internally and for communication with external organisations. The acquisition process for IT appears to be vastly different from the way “mainstream” Government Departments operate and is more like commercial sector. TDC has an approved long term strategic IT plan containing 13 projects. Each project is individually justified on tangible benefits to the organisation. User departments within TDC have a high level of involvement right from the time of system specification through to acceptance testing. The internal IT department works closely with both users and vendors to procure a suitable system. Where possible a systems integrator is used to take responsibility for the entire project, and where possible, solutions are based on standard software packages. The aim is to get solutions in quickly, sometimes with limited functionality,

and then work on gradual improvements with increasing complexity. Current systems and planned projects are as follows:Internet mail Started with Eudora and then gradually improved.Trade matching system Accessible through Internet. This system matches

potential buyers with sellers. Launched in Jan 97 and currently has 3,000 paying corporate users.

TDC Link Another Internet accessible service. TDC Link contains a database of 700,000 Hong Kong, PRC businesses and businesses that buy from Hong Kong.

Exhibition and Visitor Management SystemPayroll systemCustomer DatabaseFinance systemPublication systemWork flow management system Being investigated.Document Management System Pilot to confirm value of this approach.Knowledge Management System In discussion stage. Objective is to reduce the

impact of staff churn.Research system Contains market research reports, but TDC still

receives a lot of telephone enquiries.

3. Provisional Urban Council

FindingsThe Urban Council is leveraging Internet and other technologies to provide information access to the community. Examples include:

· An extensive web home page listing the UC organisation, contacts, accomplishments, resources, services and projects.

· An Internet Public Library Online Catalogue was launched in November 1997 which allows the public to search the catalogue via the Internet.

· An Information Kiosk project is expected to transition from internal pilot to initial public rollout early in 1998 at 6 sites. These kiosks will allow touch screen inquiry of events like cultural performances, sports games, museums and exhibitions and provide information on the environment and health.

Information systems are being developed or enhanced to streamline operations and increase effectiveness. These include:

· PCs have been provided to about 70% of the mid-management ranks and above for office automation applications like email, word processing, spreadsheet, etc. and for personal productivity enhancement like music scoring.

· Major new systems being planned include a ticketing system and a library system. An integrated ticketing system will support both cultural and sporting events,

replacing the 30 outlet URBTIX and 50 outlet SPORTIX systems. The new library system will serve the new central library and integrate the district libraries.

· Other systems that can facilitate ease-of-use by the community are being contemplated. An example is the use of MONDEX card for petty cash payments such as entrance fees to public swimming pools and other public facilities. Another example is a Restaurant Licence Application system that will increase ease of public access and streamline the application process.

· Other major IT projects include the upgrade of the mainframe based systems for the year 2000.

4. Provisional Regional Council

FindingsThe Regional Council completed an Information Systems Strategy Study in mid 1997. Subsequently, a master plan has recently been approved. In general, the IT plan is to:

· Extend the computing infrastructure through more PCs, networking and open systems.

· Develop high priority and high benefit applications with an approach which includes a) integrated systems which support multiple relevant functions; b) procure packages where possible; and c) outsourcing to leverage expertise.

· Organise team structures and use standard methodologies to achieve objectives.· Increase the use of Chinese in systems.· Use Internet and other user interface technologies to provide alternate means of

public access to information.· Build two key operations systems: the Library system and the Booking system.· Define future improvements in office automation in a study that considers areas

like workflow automation, processing re-engineering and the use of email and groupware.

Currently the Regional Council is leveraging Internet and other technologies to provide information access to the community and automate internal operations. Examples include:

· A web home page listing the Regional Council organisation, accomplishments, services and projects.

· PCs have been provided to many of the mid-management ranks and above for office automation applications like word processing and spreadsheet.

· The Provisional Regional Council shares the URBTIX ticketing systems from the UC.

· Other systems which can facilitate ease-of-use by the community are being contemplated. An example is the use of Visa Cash card for petty payments at the Tuen Mun Golf facility.

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