providing quality of service (“qos”) information to...

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Providing Quality of Service (“QoS”) Information to Consumers of

Residential Broadband Internet Access Services

Statement of the Telecommunications Authority

31 January 2005

EXECUTIVE SUMMARY

With all sectors of the telecommunications industry in Hong Kong

liberalised and open to competition, consumers and businesses can now enjoy

the outcome of market liberalisation and competition: more choices of service

providers, a wide range of innovative services as well as competitive prices.

In such a competitive market, service providers are expected to compete on

both price and quality. Service providers failing to meet consumers’

requirements or expectations in price or service quality would be forced out of

market. However, to get the full benefit of competition, consumers need to be

well informed, particularly on the non-price aspects of the service to be

provided, for example, QoS of different service providers in the market. To

enable consumers to make better-informed purchasing decisions, the

Telecommunications Authority (“TA”) has issued a public consultation paper

on 23 July 2004 (“Consultation Paper”) to propose a framework for providing

QoS information to consumers whereby the QoS of service providers in the

market will be measured, reported and published, based on definitions and

measurement methodology uniformly applied across the industry. The QoS

framework would first focus on the residential broadband Internet access

service market.

2. The objective of the QoS framework is to increase the transparency

of the QoS in the broadband Internet access service market. A significant

number of complaints received by OFTA are attributable to the

lower-than-expected performance, or misunderstanding of the QoS pledges, of

service providers. Furthermore, customers are usually bound by fixed-term

contracts. Even if a customer finds the service quality unsatisfactory or

different from expectations during the commitment period, many of them

would have to continue to subscribe to the service reluctantly to avoid losses

resulted from penalty charges. One of the effective ways to address

consumers’ concerns is to enhance the transparency of QoS and service

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information of different service providers in the market so that consumers have

sufficient comparable QoS and service information for making informed

choices. It is hoped that with ready access to information on the non-price

aspects of the various competitive residential broadband services on offer in the

market, market forces can work effectively and QoS can be upheld. Under the

framework, QoS information (based on both technical and service performance

indicators) as well as service information (i.e. helpline numbers, information of

billing and service termination) of the residential broadband Internet access

service providers will be made available to the public. The scheme will not

set any minimum service standards for the service providers because consistent

with the light-handed regulatory philosophy that he has all along adopted, the

TA considers that the service standards in a competitive market should be

determined by the market itself.

3. All stakeholders (including the industry, consumer interest groups,

end users and the public) have been invited to comment on all aspects of the

proposal put forward in the Consultation Paper. By the closing of the

consultation period, the TA received a total of thirteen submissions from the

following respondents:

� China Resources Peoples Telephone Company Limited

(“Peoples”)

� Consumer Council (“CC”)

� Hong Kong Broadband Network Limited (“HKBN”)

� Hong Kong Telecommunications Users Group (“HKTUG”)

� Hutchison Global Communications Limited (“HGC”)

� i-Cable WebServe Limited (“i-Cable”)

� Liberal Party

� New World Telecommunications Limited (“NWT”)

� Pacific Supernet Limited (“Supernet”)

� PCCW IMS Limited (“IMS”)

� The Law Society of Hong Kong (“Law Society”)

� Two members of the public

4. The submissions can be downloaded from OFTA’s website. Having

duly considered the submissions, the TA sets out in this Statement his final

views on the QoS framework for residential broadband Internet access services.

The TA’s final views are summarised as follows:

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a. The QoS framework should be implemented on a mandatory

basis for the top four residential broadband Internet access

service providers based on the number of residential broadband

service subscribers. Based on the market share information of

the period of September – November 2004, the top four

residential broadband service providers (in alphabetical order) are

HGC, HKBN, i-Cable and IMS. The new list of the top four

residential broadband Internet access service providers for the

second year of implementation will be announced by OFTA by

end of December 2005. Residential broadband Internet access

service providers other than the top four as well as the business

broadband service providers are encouraged to participate in the

scheme on a voluntary basis. For more details of voluntary

participation, please refer to Section IV of this Statement.

b. Under the QoS framework, three types of information of the

service providers will be published by the TA: (i) performance

statistics of five technical key performance indicators (“KPIs”);

(ii) information of helpline numbers, billing and service

termination; and (iii) performance pledges and statistics of two

service KPIs.

c. For the five technical KPIs, OFTA will commission an

independent institution to develop the detailed definition and

measurement methodology, as well as to conduct the

measurement. Under this arrangement, service providers will not

need to expend resources in the development and measurement

processes. The proposed technical KPIs are

(i) download time from the service provider’s website,

(ii) download time from a local website,

(iii) download time from overseas websites,

(iv) upload time to the service provider’s file transfer

protocol (“FTP”) server and

(v) network latency.

For details of the technical KPIs, please refer to Section III(A)

and Appendix I of this Statement. The performance statistics of

the five technical KPIs for the month of July 2005 will be

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published on OFTA’s website in August 2005 and will thereafter

be updated on a monthly basis.

d. The top four residential broadband Internet access service

providers shall on a mandatory basis submit to OFTA their

(i) helpline numbers,

(ii) billing information, and

(iii) information on service termination.

For details of information to be submitted, please refer to Section

III(B) and Appendix II of this Statement. The service

information will be published on OFTA’s website beginning

August 2005. The service providers are required to submit the

updated information to OFTA for amending the website whenever

there are changes to the information. Residential broadband

Internet access service providers other than the top four as well as

business broadband service providers are encouraged to

participate on a voluntary basis and disclose the service

information to the public.

e. The top four residential broadband Internet access service

providers shall on a mandatory basis submit to OFTA

(i) their performance pledges of the QoS standard of the two

service KPIs (i.e. complaint handling time and enquiry

call answering time) and

(ii) their quarterly performance statistics of the two service

KPIs, signed off by the chief executive officer, directors or

company secretary of the company, certifying the

statistical information provided is “true and fair”.

For details of the two service KPIs, please refer to Section III(C)

as well as Appendix III and IV of this Statement. The pledges

and performance statistics of the two service KPIs for the quarter

of April – June 2005 will be published on OFTA’s website in

August 2005 and will be updated quarterly thereafter.

Residential broadband Internet access service providers other

than the top four as well as business broadband service providers

are encouraged to participate on a voluntary basis and disclose

the service information to the public.

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f. As explained above, the three types of information to be

disclosed under the QoS framework (as set out in point b of this

paragraph) will first be published on OFTA’s website in August

2005 and will be updated regularly by OFTA.

g. The QoS framework will be reviewed biennially.

5. The following sections of this Statement will give the TA’s

preliminary views, the summary of submissions, the TA’s responses to

submissions as well as his final views on the following aspects of the QoS

framework.

I. Why we need a QoS scheme?

II. Who will participate in the QoS scheme on a mandatory basis?

III. What kind of information will be disclosed under the QoS

scheme?

A. Technical KPIs

B. Service information of Helpline Numbers, Billing and

Service Termination

C. Service KPIs

i) Approach

ii) Legal basis

iii) What are the two service KPIs and why are they

selected?

iv) How to ensure the truthfulness of the Performance

Statistics?

v) Enforcement of Performance Pledges

IV. Participation on a voluntary basis

V. Review of the QoS framework

VI. Business market segment

VII. Other issues

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(I) WHY WE NEED A QoS SCHEME?

Summary of Submissions and the TA’s Responses

6. CC and HKTUG supported the initiative in implementing the QoS

scheme. CC strongly believed that consumers need to be well informed of the

QoS of different service providers in the market. HKTUG considered that, in

a fully liberalised telecommunications market, QoS information among other

pricing and service feature information, should be made transparent to end

users such that they can make an informed choice.

7. i-Cable doubted whether a QoS scheme was necessary. It suggested

the TA to take into account the availability and effectiveness of market-based

solutions, in lieu of regulatory intervention. The company submitted that

information asymmetry possibly existed in every market and this should not be

a cause for regulatory intervention unless there was evidence establishing the

existence of market failure. i-Cable further commented that if operators and

regulator were to invest in the scheme, the need of the scheme and the actual

benefit had to be first proved and quantified. However, in the Consultation

Paper, the actual benefits for consumers to have comparable QoS information

in making informed decisions were not proven or quantified, the need for the

proposed KPIs was not proven, whether the proposed KPIs could succeed in

measuring what really mattered to consumers was not established, consumers’

likely take-up of this QoS scheme was not established or quantified, whether

and how consumers would suffer from the lack of comparable QoS information

was not proven, and the likely positive influence of the QoS framework on the

overall performance of service providers was not established.

8. The TA does not subscribe to i-Cable’s views. As mentioned in the

Executive Summary, customers are usually bound by fixed-term contracts.

Even if a customer finds the service quality provided by the service provider

unsatisfactory during the commitment period, many of them would have to

continue to subscribe to the service reluctantly to avoid losses resulted from

penalty charges. One of the effective ways to address consumers’ concerns is

to enhance the transparency of QoS and service information of different service

providers in the market. There is an obvious need for consumers to have

access to sufficient comparable QoS and service information for making

informed choices, and needless to say, the QoS framework will bring benefits

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to consumers by enhancing the transparency in the market. CC took a similar

view in its submission and supported that information asymmetry between

service providers and consumers was a cause of market imperfection, and the

market could achieve better levels of efficiency if sufficient information was

available to consumers. As a matter of fact, there are many economic

researches and empirical examples showing the problems brought about by

asymmetric information between sellers and buyers in the market (e.g. adverse

selection) as well as the benefits brought to consumers when they have

sufficient information to make informed choices.

9. Lack of transparency and asymmetric information between sellers and

buyers in the market may lead to consumers’ misunderstanding of the QoS

pledges and performance of service providers, which may possibly result in

consumers’ dissatisfaction and complaints. According to the consumer

complaint statistics published by CC on 10 January 2005, 29% of the total

consumer complaints received by CC in the past year were related to

telecommunications services, among which Internet services topped the list and

accounted for 45% of the total telecommunications-related complaints.

Internet services also accounted for the largest number (i.e. 43%) of consumer

complaints received by OFTA in 2004. While it is an undeniable fact that

consumers are getting good value for money from telecommunications services

in Hong Kong, there is an urgent need for all parties concerned, including the

industry and the regulator, to face the challenge of ensuring that service quality

will be upheld in the face of intense competition. The QoS framework will

not only address the issue of lack of transparency of QoS level in the market,

but also stimulate healthy competition among service providers on non-price

aspects and improve the QoS in the market ultimately.

10. The TA does not agree with i-Cable that the proposed QoS framework

to publish pledges and performance statistics of service KPIs is too

interventionist. It is a very light-handed regulatory initiative which aims at

providing a unified mechanism for service providers to report their QoS level

of the service KPIs. Having duly considered the submissions received during

the consultation exercise as well as the statistics of consumer complaints

received by both the CC and OFTA in 2004, the TA decides to adopt, at this

initial stage, only the “complaint handling time” and “enquiry call answering

time” as service KPIs, as compared to the original proposal of five service KPIs

(please refer to Section III(C)(iii) for more details). The technical KPIs are to

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be measured by an independent institution and therefore service providers do

not need to expend resources in collecting the statistics of technical KPIs.

Furthermore, the ultimate level of QoS to be pledged by individual operators is

determined by market forces, not by the regulator.

11. The TA takes note of i-Cable’s concern that the proposed KPIs may

not be able to address consumers’ need. As explained below in paragraphs

19 – 21, the major four types of consumer complaints received by OFTA can be

largely addressed by the three types of information to be disclosed under the

QoS framework. The TA is of the view the QoS framework as a whole can

address the genuine concerns of consumers in the residential Internet access

service market. The KPIs as well as the service information to be disclosed

under the framework are not only meaningful to consumers, they are also easy

for consumers to understand. HKTUG, who represents the interests of

business users, fully supported the proposed KPIs and submitted that these

were the industry best practice parameters. Regarding the comments on

quantification of benefits, it is indeed very difficult, if not impossible, to

quantify the benefits and other effects/influences at this point in time but it is

expected that, as the consumers become more aware of the QoS scheme, the

direct and indirect benefits brought to them will gradually increase. After

implementing the QoS framework for a reasonable period of time, the industry

and the regulator may then be in a better position to gauge the consumers’

actual take-up of the scheme, the actual benefits to be gained by consumers, as

well as the actual positive impact of the QoS framework on the overall

performance of service providers. As mentioned earlier in this paper, there

will be a biennial review on the proposed KPIs. OFTA will take that

opportunity to review the effectiveness of the QoS framework.

(II) WHO WILL PARTICIPATE IN THE QoS SCHEME ON A

MANDATORY BASIS?

The TA’s Preliminary Views

12. To determine who will be required to participate in the QoS scheme,

the TA proposed two possible approaches in the Consultation Paper. One

approach was to include only the top five residential broadband service

providers (based on the number of residential broadband Internet access service

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subscribers) on a mandatory basis in the QoS framework. Residential

broadband Internet access service providers that are not among the top five

providers would be exempt from the QoS monitoring scheme. However,

voluntary participation from these service providers as well as business

broadband service providers would be welcomed. Another approach

proposed in the Consultation Paper was to implement the scheme on a

completely voluntary basis.


13. CC and HKTUG supported the TA’s proposal that the QoS framework

should apply to the top five residential broadband Internet access service

providers. On the other hand, HKBN and IMS submitted that the QoS

framework should be applied to all residential broadband Internet access

service providers. IMS was concerned that those service providers who were

not covered by the QoS framework would be free to do whatever they wanted

although they were in fact bound by the same licence conditions as the top five

service providers. The Law Society was concerned that applying the QoS

framework on only some of the service providers might disturb the level

playing field. HGC also argued that consumers might want to subscribe

services from smaller service providers.

14. HGC, i-Cable, NWT, Peoples and the Liberal Party supported the

proposal for implementing the QoS framework on a voluntary basis. HGC

explained that, with intense market competition, service providers would be

expected to provide QoS information to consumers upon request and

consumers would differentiate those service providers who provide QoS

information from those who do not, and therefore would be able to make

informed choices in the market. On the other hand, HKBN and HKTUG were

concerned that reliance on voluntary participation would make the QoS

framework incomplete and meaningless.

15. The TA is rather sceptical about HGC’s claim that service providers

will provide QoS information to consumers upon request due to intense market

competition. While it may be true that some service providers have published

their performance pledges on their websites, the TA is not aware that any

service providers have published their statistics of KPIs of QoS albeit the

competition on price has been intense. Even if some of the service providers

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do take the initiative to publish their QoS pledges and statistics, there is a need

for a unified framework to ensure that comparable and meaningful QoS

information of the major service providers is made available to consumers so

that they can make comparison among the service providers. Majority of the

consumers would still be unable to make an informed choice if none of the

major service providers participate in the voluntary QoS scheme. As such, the

objective of the QoS framework cannot be achieved if this is to be implemented

on a voluntary basis. Based on the statistics of residential broadband Internet

access service subscribers in the period from September to November 2004, the

top four residential service providers have already accounted for over 95% of

total market share. The market share of the 5th

largest service provider is

significantly lower than that of the 4th

largest service provider. The benefits to

be brought to the consumers by including the 5th

largest service provider into

the QoS framework may not justify the administration costs. In fact, the

market shares of the 5th

, 6th

and 7th

largest service providers are very close. In

view of the market dynamics, it is possible that the 5th

largest service provider

participating in the QoS framework might change every year. Having

considered that consumers would almost have the full picture of the QoS of

residential broadband services in Hong Kong if the top four service providers

are covered by in the QoS framework, the TA decides to mandate only the top

four service providers to participate in the QoS framework. Other service

providers may volunteer to participate. Having said that, OFTA will monitor

the market situation closely after its implementation in the first year.

16. Based on the market share information for the period of September –

November 2004, the top four residential broadband service providers (in

alphabetical order) are HGC, HKBN, i-Cable and IMS. Three types of

information (i.e. (i) performance statistics of five technical KPIs; (ii)

information of helpline numbers, billing and service termination; as well as (iii)

pledges and performance statistics of two service KPIs) of these four service

providers will first be published on OFTA’s website in August 2005 and will be

updated regularly during the first year of implementation.

17. The TA takes note of IMS’s concern that service providers which were

not covered by the QoS framework would be free to do whatever they wanted.

All licensees are obliged to comply with the licence conditions and provisions

in the Telecommunications Ordinance (the “Ordinance”). That some of the

licensees would not be obliged to submit QoS pledges and statistics to the TA

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does not mean that these licensees would not be subject to their licence

conditions and the Ordinance. As such, the TA does not subscribe to the view

that the level playing field would be disturbed. Based on the statistics of

November 2004, the remaining ISPs (over 180 in number) only accounted for

less than 5% of the residential broadband service market. Consumers’

benefits from the QoS information of these ISPs may not justify the heavy

administrative burden brought about by mandating all these remaining ISPs to

participate in the QoS scheme. Accordingly, mandating the top four

residential broadband service providers to participate in the QoS scheme is a

more efficient and economical way to achieve the objective of enabling

consumers to have sufficient comparable QoS information to make informed

choices.

18. However, residential broadband Internet access service providers

other than the top four as well as business broadband service providers are

welcome to participate in the QoS scheme on voluntary basis. Although the

technical KPIs of these voluntary participants will not be measured by the

institution commissioned by the TA under the QoS scheme, they are welcome

to disclose information of their helpline numbers, billing and service

termination, as well as pledges and performance statistics of the two service

KPIs. For more details of voluntary participation, please refer to Section IV

of this Statement.

(III) WHAT KIND OF INFORMATION WILL BE DISCLOSED

UNDER THE QoS SCHEME?

19. According to the statistics of consumer complaints received by OFTA

from January to November 2004, the complaints against residential Internet

access services accounted for 76% of the total number of consumer complaints

received by OFTA during the said period. There were four major categories of

complaints, namely:

� technical aspects of the Internet access services;

� disputes on billing;

� disputes on service termination; and

� quality of customer services

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Major Category of

Complaint Nature

Examples % of Total Cases

(Jan – Nov 2004)

I. Technical aspects of

the Internet access

service

Downloading speed, network stability, etc.

29%

II. Disputes on billing Disputes on traffic volume, service charges

and service plans

15%

III. Disputes on service

termination

Arrangement for terminating service

provision, notice period, penalty charges for

early service termination, etc.

17%

IV. Quality of customer

services

Complaint handling procedures/time, enquiry

call answering time, after-sales customer

services, etc.

14%

V. Others Email spamming, appointment of agents for

collection of debt

25%

TOTAL

100%

20. The TA considers that complaints related to technical aspects of the

Internet access service (i.e. category I of the above table) should be largely

covered by the technical KPIs under the QoS framework. Information on

billing and service termination (i.e. categories II and III of the above table) is

important service information which should be disclosed to consumers to

enhance transparency in the market. The quality of customer services (i.e.

category IV of the above table) should be largely covered by the service KPIs.

21. Accordingly, three types of information should be made available to

consumers under the QoS framework, namely:

� performance statistics of technical KPIs (please refer to

subsection (A) under this section);

� service information related to helpline contact information,

billing and service termination (please refer to subsection (B));

and

� performance pledges and statistics of service KPIs (please refer to

subsection (C)).

With these three types of information made available to consumers, the QoS

framework should be able to address the genuine concerns of consumers in the

residential broadband Internet access service market and can provide the most

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meaningful information from the consumers’ perspectives when they are

considering whether to sign up for a service with a particular service provider.

The TA is of the view that it is prudent to start the QoS framework with a

manageable number of KPIs and progressively increase the number of

indicators later as more operational experience is gained.

(A) Technical KPIs


22. In the Consultation Paper, the TA proposed that the definitions and

measurement methodology of technical KPIs should be carried out by an

independent institution since these KPIs were more complicated and would

take longer time to formulate the measurement details. Five technical

performance indicators were proposed, namely (i) download time from the

service provider’s website, (ii) download time from a local website, (iii)

download time from overseas websites, (iv) upload time to the service

provider’s FTP server and (v) network latency.


23. There were no adverse comments on the proposal of commissioning

an independent institution to conduct the measurement of technical

performance indicators. HKTUG considered that the five proposed KPIs were

industry best practice parameters and should be adopted when the QoS

framework commenced. CC and IMS supported the TA’s proposal of

commissioning an independent institution for the measurement exercise.

24. Although the proposal on the technical KPIs may not address each

and every aspect, it will give an indication of the technical performances

associated with a range of applications that are commonly used by the public.

Making the performance statistics of service providers on these KPIs available

to consumers would help consumers to make informed choices.

25. Since the TA receives no adverse comments on the proposal of

commissioning an independent institution to conduct the measurement of

technical performance indicators, he decides to adopt such an approach. The

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institution to be commissioned will be responsible to develop the detailed

definitions and measurement methodology of the technical KPIs, as well as to

carry out the measurement process. The institution will take into account the

views and comments received in response to the consultation. Details of the

comments on the technical performance indicators and the TA’s responses may

be found in Appendix I of this Statement.

26. Subject to the progress of the measurement exercise, the publication

of measurement result for the month of July 2005 is scheduled for August 2005

and will thereafter be updated on a monthly basis.

(B) Service Information of Helpline Numbers, Billing and Service

Termination

27. As explained in paragraph 19, a large number of consumer complaints

are related to disputes on billing and service termination. Accordingly, the TA

considers that there is a need to disclose detailed information on billing (e.g.

methods of delivering the bills to customers, payment options, deadline for

disputing the bill, etc.) and service termination (e.g. what the customers need to

do in order to terminate the service, penalty charges for early service

termination, notice period, etc.) to consumers in order to address their genuine

concerns when they subscribe to a service. In addition to information on

billing and service termination, the TA also considers helpline number(s) to be

very useful service information for consumers.

28. Information of helpline number(s), billing and service termination is

readily available. Service providers do not need to incur costs or resources in

collecting and reporting such information to OFTA and the public, yet the

consumers will find the information very useful for them to make informed

purchasing decisions. For details of information to be disclosed, please refer

to Appendix II of this Statement.

29. Service providers are required to submit the relevant information to

the TA by 31 July 2005. The service information will first be published on

OFTA’s website in August 2005. Service providers are required to submit the

updated information to OFTA for amending the website whenever there are any

changes to the published information.

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(C) Service KPIs

(i) Approach


30. In the Consultation Paper, the TA proposed that there would not be

any universal minimum QoS level. Residential broadband Internet access

service providers themselves could make pledges of their own QoS standard of

service KPIs and the QoS level would then be determined by the market. To

enable consumers to make informed choices in the market, service providers

should submit their performance pledges and quarterly statistics of the five

service KPIs to the TA, who would collate the returns and publish the pledges

and performance statistics of the service providers. In this way, consumers

would have ready access to information regarding comparable non-price

performance of the service providers.


31. CC, HKBN, IMS, NWT and the Liberal Party agreed with the TA that

any universal minimum QoS standard, set either by the TA or the industry,

would not be meaningful for service providers or consumers. The service

level should be determined by market forces.

32. IMS agreed that the approach of reporting whether the licensee has

“passed or failed” the universal minimum standard would not be able to make

distinctions for various levels of substandard and superior service. On the

other hand, Supernet supported the “pass or fail” approach since it would be

easier for consumers to understand. While it may be true that the “pass or

fail” approach may be easier for consumers to understand, the TA is concerned

that this approach may fail to make distinctions for various levels of

substandard and superior service. The TA considers that a mere indication of

“pass or fail” would not provide sufficient QoS information for the consumers

to make an informed choice.

33. HKBN highlighted the importance to ensure that consumers could

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ultimately benefit from the QoS information and would not be confused or

misled by the information. As such, all KPIs should be clearly defined to

avoid ambiguities, different or conflicting interpretations or even manipulations.

The TA agrees with HKBN on the importance of clear definitions of the KPIs.

The TA has duly considered the comments received on the KPIs and has made

appropriate amendments to the definition and/or calculation methodology of

the KPIs. The TA has also studied the statistics of complaints received by

OFTA in 2004 and has made some changes to the choice of service KPIs such

that the type of information to be disclosed under the QoS framework can

better address the genuine concerns of the consumers in the market.

34. i-Cable submitted that the information submitted by service providers

to OFTA should be for OFTA’s monitoring purpose only. Publication of such

information might invite unhealthy competition among service providers. The

TA rejects i-Cable’s view. The objective of the proposed framework is to

provide QoS information of the residential broadband Internet access service

providers to consumers such that they can make informed choices. Without

publishing the QoS information, the objective of the framework simply cannot

be achieved. As explained in the Consultation Paper, publication of

comparable performance statistics will encourage service providers to strive for

higher level of QoS and stimulate healthy competition in the market on

non-price aspects. Pressure from public scrutiny of the performance figures

will also motivate the service providers to address substandard performance.

The TA does not agree with i-Cable that publication of QoS information would

invite unhealthy competition. On the contrary, the TA is of the view that such

publication would encourage healthy competition among the service providers

on aspects other than pricing.

35. Having considered the comments received during the consultation

exercise, the TA maintains his view that service providers should submit their

performance pledges and quarterly statistics of the service KPIs (please refer to

subsection (iii) for the details of the service KPIs) to the TA, who will collate

the returns and publish the pledges and performance statistics of the service

providers. The QoS level should be determined by the market. The pledges

and statistics of service providers on service KPIs for the quarter of April –

June 2005 will first be published on OFTA’s website in August 2005 and will

be updated on a quarterly basis. For the detailed implementation timetable for

publishing the performance pledges and statistics of service KPIs on OFTA’s

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website, please refer to Appendix V of this Statement.

(ii) Legal Basis


36. General Condition (“GC ”) 18(1) of the Fixed Telecommunications

Network Services (“FTNS”) Licence, Special Condition (“SC”) 6(1) of the

Fixed Carrier Licence as well as SC 5(1) of the Public Non-exclusive

Telecommunications Service (“PNETS”) Licence for International Value-added

Network Services1 (“IVANS”) require the licensee to furnish the TA with such

information related to the business run by the licensee under the licence, as the

TA may reasonably require in order to perform his functions under the licence.

GC 10(1) of the FTNS Licence, SC 5(1) of the Fixed Carrier Licence as well as

GC 1 of the PNETS Licence for IVANS require the licensee to operate,

maintain and provide the service in a manner satisfactory to the TA. The

information required to be submitted and published pursuant to this Statement

is, where appropriate, of relevance to the obligations to provide a satisfactory

services as prescribed under GC 10(1) of the FTNS Licence, SC 5(1) of the

Fixed Carrier Licence or GC 1 of the PNETS Licence for IVANS. As such, the

performance pledges made by the licensee as well as the performance statistics

of the licensee are considered as information that “the TA may reasonably

require in order to perform his functions under the […] licence”, and should be

furnished to the TA under GC 18(1) of the FTNS Licence, SC 6(1) of the Fixed

Carrier Licence or SC 5(1) of the PNETS Licence for IVANS. A 2-month

consultation period had duly offered an opportunity to all concerned licensees

to make representations to the TA on the proposed disclosure of QoS pledges

and performance statistics.


37. IMS argued that none of the conditions in the licence or the Ordinance

required information on QoS pledges and performance statistics of a licensee

and that the TA did not need this information for performing his functions

under the licence and the Ordinance. As such, IMS doubted whether the TA

was legally empowered to mandate the concerned licensees to furnish him with

1 Under the current licensing regime, Internet service provider is issued with a PNETS licence for

IVANS.

- 18 -

the information on QoS pledges and performance statistics.

38. As explained in the Consultation Paper, under GC 10(1) of the FTNS

Licence, SC 5(1) of the Fixed Carrier Licence or GC 1 of the PNETS Licence

for IVANS, the licensee has the obligation of providing the service in a manner

satisfactory to the TA. The TA considers that in order to ensure that the

service is being provided in a satisfactory manner, the licensee should take

adequate steps to measure and monitor its service performance and to take

corrective actions if the performance falls below targets set by the licensee. In

particular, answering enquiries and handling complaints from consumers are

two important aspects of satisfactory service performance. Past statistics of

OFTA have shown that these two aspects were significant sources of consumer

dissatisfaction. Therefore the licensee should reasonably be expected to set

targets for these two aspects of service performance, pledge such targets to its

customers, and regularly monitor actual performance to ascertain whether it is

meeting the pledged targets. The TA needs to have access to such targets

established, and statistics collected, by the licensee in order to ascertain

whether the licensed service is provided satisfactorily by the licensee. Thus

the performance pledges made by the licensee as well as the performance

statistics of the licence are considered as information that “the TA may

reasonably require in order to perform his functions under the […] licence”,

and should be furnished to the TA under GC 18(1) of the FTNS Licence, SC

6(1) of the Fixed Carrier Licence or SC 5(1) of the PNETS Licence for IVANS.

The TA therefore does not agree with IMS’s position.

39. Having considered the submissions received during the consultation

period, the TA has duly revised the parameters for publication to address the

industry’s concern. It is appreciated that licensees might be concerned that the

limited disclosure as prescribed by this Statement could arguably, in some

circumstances, adversely affect the licensee’s financial and commercial

position, as inferior service performance might be exposed. Nevertheless, given

the competitiveness of the market, it is reasonable to expect that poor QoS

should naturally lead to poor market performance. The TA is satisfied that the

disclosure by the TA would not reasonably be expected to adversely affect the

licensee’s lawful business or commercial or financial affairs. Meanwhile,

disclosure of service performance pledges and statistics is in the public interest

as the disclosure would enable the consumers to make informed choice and the

market mechanisms to work effectively to uphold and improve QoS. After

- 19 -

having due deliberations upon the submissions received, the TA is satisfied that

the parameters for disclosure of service performance pledges and statistics

prescribed by Statement has struck a right balance between protecting the

public interest and preserving licensees’ legitimate commercial interests within

the ambit as envisaged by GC18 of the FTNS Licence, SC 6 of the Fixed

Carrier Licence or SC 5 of the PNETS Licence for IVANS. Accordingly, the

TA decides to publish, on OFTA’s website, the information of service

performance pledges and statistics of residential broadband Internet access

service providers.

(iii) What are the Two Service KPIs and Why?


40. Five service performance indicators were proposed in the

Consultation Paper, namely (i) service provisioning time, (ii) service

restoration time, (iii) customer-reported faults per 1000 customer lines, (iv)

complaint handling time and (v) enquiry call answering time.


41. HKTUG considered that the five proposed KPIs were industry best

practice parameters and should be adopted when the QoS framework

commenced. On the other hand, HKBN questioned the basis of how the TA

decided which particular aspects of QoS shall be of the greatest concern to the

consumers and how the TA defined the various KPIs. It elaborated that QoS

was basically a subjective matter and no single measure could satisfactorily

capture all aspects of QoS that were of concern to consumers. Furthermore,

defining KPIs would involve a great deal of details which might not be easily

understood by the general public and might even bring complexity and

potential confusion to consumers. i-Cable opined that apple-to-apple

comparison would drive operators to compete along narrow aspects of quality

and might fossilise quality competition at the expense of other important

dimensions of differentiation and innovation.

42. As explained in paragraph 19, one of the major categories of

consumer complaints received by OFTA is “quality of customer services”

which mainly refers to complaint handling procedures/time, enquiry call

- 20 -

answering time, after-sales customer services, etc. While “service

provisioning time”, “service restoration time” and “number of

customer-reported faults” are widely adopted by other developed economies for

monitoring QoS of their public telecommunications services, it seems that the

consumers in the residential broadband Internet access service market in Hong

Kong do have not particular concerns over these three aspects. Having

balanced the costs and benefits, the TA considers that it is more appropriate to

adopt “complaint handling time” and “enquiry call answering time” as the

service KPIs under the QoS framework at this initial stage. However, the

number and choice of service KPIs will be reviewed after two years of

implementation of the QoS framework. More importantly, service providers

are free to disclose QoS pledges and performance statistics for indicators which

are not covered in the QoS framework. As such, the TA does not subscribe to

i-Cable’s argument that the QoS framework would drive service providers to

compete along narrow aspects of QoS.

43. Some broadband service providers are offering other

telecommunications services under the same licence and using a unified

customer service platform, including the customer hotlines and complaint

handling mechanisms. Examples are fixed carrier licensees who operate their

residential broadband Internet access services under their fixed carrier licences.

These fixed carriers may already be capturing the two service KPIs without

further classifying the acquired data according to their service types. To ensure

minimal disruption to the day-to-day operation of service providers, it will not

be necessary for these service providers to modify their service platforms in

order to capture the data specifically for residential broadband Internet access

services for the sake of conforming to the current QoS Scheme. These service

providers will though need to inform the TA that the figures that they report

under the QoS Scheme apply to other services as well.

44. The TA takes note of HKBN’s concern that defining KPIs would

involve a great deal of details which may not be easily understood by the

general public. At this initial stage, service KPIs only include “complaint

handling time” and “enquiry call answering time”. The definition of these

two KPIs should be easy for consumers to understand yet meaningful for them.

As a matter of fact, no submissions received during the consultation exercise

considered that definition of these two KPIs would be difficult for consumers

to understand or would bring complexity or potential confusion to consumers.

- 21 -

45. Comments on the two service KPIs and the TA’s responses can be

found in Appendix III of this Statement. Having considered the comments

received, the TA has finalised the definitions and calculation methodology of

the KPIs, which can be found in Appendix IV of this Statement.

(iv) How to Ensure the Truthfulness of the Performance Statistics?


46. In order to ensure that service providers submit “true” performance

statistics of the service KPIs, the TA proposed in the Consultation Paper that

service providers should submit audited performance statistics once a year.

The TA also invited views and comments on whether section 7M of the

Ordinance would be a sufficient safeguard against incorrect information on

QoS reported by service providers.


47. i-Cable, IMS and NWT submitted that section 7M should be a

sufficient safeguard against incorrect information on QoS reported by service

providers. On the other hand, the Law Society took an opposite view and

considered that external auditing should be set as a mandatory requirement.

IMS and Peoples considered that external auditing would not only impose

financial burden on service providers, but also create additional administrative

work. Furthermore, the auditing result might not be timely for the purpose of

statistics publication. Supernet suggested OFTA to fund an external auditor to

audit the information submitted by all participating service providers. As an

alternative to external auditing, IMS suggested to have the performance

statistics endorsed by a senior officer of the service providers.

48. The TA is of the view that section 7M of the Ordinance and external

auditing are two separate and distinct means of ensuring truthful and reliable

reporting of performance statistics by service providers. The difference is that

section 7M may be considered as a more “passive” means of regulation (i.e. the

TA may start investigation under section 7M upon receiving a complaint),

whereas external auditing is a more “proactive” means (i.e. an annual

examination exercise to ensure the submitted statistics are true and accurate).

- 22 -

However, it should be emphasised that the requirement of external auditing

does not preclude enforcement actions under section 7M.

49. The service KPIs will be meaningful only if service providers submit

true performance statistics. If consumers do not have any confidence in the

statistics submitted by service providers, the service KPIs would become

meaningless at all. While external auditing may be the most effective and

efficient way to ensure that the service providers submit reliable statistics, the

TA takes note of the concern that external auditing might impose financial

burden on service providers. Having considered that this is a new scheme and

the service providers may be occupied during the initial years of

implementation in making and further improving the arrangements for

collecting the performance statistics of the service KPIs, the TA is of the view

that in the first two years of implementation the top four residential broadband

Internet access service providers should have the discretion to decide whether

or not to submit an external auditor’s report for their performance statistics of

the two service KPIs. If the service providers choose not to submit the

external auditor’s report, they are required to submit the quarterly statistics

together with a letter signed by the chief executive officer, directors or

company secretary of the company, certifying that the performance statistics

submitted are “true and fair”. Whether service providers would be required to

submit external auditor’s report for their performance statistics will be

reviewed by the TA two years after the implementation of the QoS framework.

(v) Enforcement of Performance Pledges


50. The Law Society requested OFTA to clarify the sanctions it intended

to impose on service providers which failed to meet the performance pledges

and the rights their customers would have in relation to such failure. On the

contrary, IMS submitted that failure to meet the performance pledges should

not be taken as a breach of GC 10 of the FTNS Licence, SC 5 of the Fixed

Carrier Licence or GC 1 of the PNETS Licence for IVANS, which required the

licensee to operate, maintain and provide service in a manner satisfactory to the

TA. IMS submitted that the frequency of failure to meet the pledges should

be taken into consideration when the TA formed his view on breach of licence

condition. NWT also submitted that, in case of severe weather and emergency

- 23 -

situations, service providers might not be able to meet the QoS pledges.

51. The TA takes note of the service providers’ view that failure to fulfill

their performance pledges should not be considered as a breach of licence

condition. The TA understands that failure to achieve the level of pledges is

sometimes caused by factors which are beyond the service providers’

reasonable control. In handling complaints against service providers for

failing to meet performance pledges, the TA would look into the circumstances

of individual cases and would take into account whether reasonable steps or

measures to rectify or avoid the faults have been put in place.

52. IMS mentioned that some small service providers might like to gain

credibility by voluntarily participating in the QoS monitoring scheme but

choosing to falsely report the performance statistics. OFTA would require all

service providers, whether they participate on a mandatory or voluntary basis,

to verify and sign off the performance statistics of the two service KPIs by

chief executive officer, directors or company secretary of the company.

(IV) PARTICIPATION ON A VOLUNTARY BASIS

53. As explained in Section II of this Statement, the TA will mandate only

the top four residential broadband Internet access service providers to

participate in the QoS scheme. However, the TA welcomes residential

broadband service providers other than the top four as well as business

broadband service providers to participate on a voluntary basis. Participation

in the QoS scheme on either mandatory or voluntary basis will bring benefits to

the service providers.

54. With a view to prioritizing resources, the institution commissioned by

the TA to measure the technical KPIs will only conduct measurement of the top

four residential broadband service providers who will be required to participate

in the QoS scheme on a mandatory basis. In other words, at the initial stage,

the technical KPIs of the voluntary participants will not be available to

consumers under the QoS framework. As more experience is gained, OFTA

may review the arrangement and may consider extending the scope to cover the

voluntary participants. However, for those voluntary participants who are

really keen to have their performance statistics of technical KPIs measured and

- 24 -

published on OFTA’s website, they are welcome to approach the TA to discuss

the arrangement on the understanding that they will have to deploy their own

resources for the exercise.

55. Under the QoS framework, service providers participating on the

voluntary basis will submit to the TA two types of information, namely:

� service information of helpline numbers, billing and service

termination (please refer to Section III(B) of this Statement); and

� performance pledges and statistics of service KPIs (please refer to

Section III(C)).

56. Voluntary participants who wish to have their service information (i.e.

information of helpline numbers, billing and service termination) published on

OFTA’s website in August 2005 are required to inform OFTA of the intention

by 15 March 2004 and provide the information to OFTA by 31 July 2005.

Updated information should be submitted to OFTA whenever there are changes

to the information. Some voluntary participants may join the QoS scheme

later. They may provide their service information to OFTA at any time on the

understanding that OFTA will need sufficient lead-time to upload the

information to the website.

57. Since the measurement exercise of the service KPIs will commence in

April 2005 (i.e. the first measurement quarter is April – June 2005), voluntary

participants who wish to publish service KPIs on OFTA’s website in August

2005 are required to notify the TA by 15 March 2005. Voluntary participants

may of course join the QoS scheme later. They are required to notify the TA

two weeks before the commencement of the measurement exercise. They are

also required to follow the implementation timetable in Appendix V for the

publication of their performance pledges and statistics of the service KPIs. For

example, the deadlines for them to submit the pledges and statistics of service

KPIs to OFTA are 31 January, 30 April, 31 July and 31 October every year.

(V) REVIEW OF THE QoS FRAMEWORK


58. In view of the dynamics of the broadband Internet access service

- 25 -

market, the TA proposed in the Consultation Paper reviewing the QoS

regulatory framework biennially, including but not limited to the criteria for

defining the targets of the QoS framework as well as the choice of KPIs. A

public consultation might be initiated for the review exercise to solicit views

and comments from the industry, consumer interest groups and the general

public.


59. IMS agreed with the TA’s proposal and submitted that any

amendments or modifications of the QoS framework should be consulted prior

to implementation. HKBN questioned the justification for setting a timeframe

of 2 years.

60. The broadband Internet access service market is changing fast and the

QoS framework should be reviewed frequently in order to keep pace with the

market. On the other hand, a review exercise of a framework might not be

meaningful if the framework has not been implemented for a reasonable period

of time. Having taken into account the time required to enhance consumers’

awareness of the QoS framework and educate the consumers about the KPIs, as

well as the time required by service providers to gradually improve the level of

their QoS through healthy competition, the TA maintains his view that the

proposed 2-year timeframe is reasonable.

(VI) BUSINESS MARKET SEGMENT


61. In view of the fact that business users were generally protected by the

service level agreements signed with the broadband service providers and that

business users usually had stronger power to bargain with the service providers

than residential consumers do, the TA proposed in the Consultation Paper to

focus the QoS framework on residential market segment first. The TA might

consider monitoring the business market segment at a later stage.


- 26 -

62. Since the TA has not received any opposing view against his proposal,

he maintains his view that he may consider monitoring the business market

segment at a later stage. However, he welcomes participation in the QoS

scheme by the business broadband service providers on a voluntary basis.

(VII) OTHER ISSUES


63. CC suggested that OFTA should conduct a customer satisfaction

survey to identify the crucial elements (apart from price) which were most

relevant to the purchasing decision concerning telecommunications services.

The result of the survey would help to define the KPIs and help service

providers to focus on areas which were concerned by consumers the most.

The TA takes note of CC’s suggestion of conducting customer satisfaction

survey. OFTA may consider this in the review exercise which will be held

two years after the implementation of the QoS framework.

64. The Liberal Party submitted that the sales and marketing tactics as

well as the contractual issues were not discussed in the Consultation Paper

although consumers were generally very concerned about these issues. A

member of the public also raised his concern that customers were subject to a

penalty if they terminated the service before end of the commitment period

even though the service provider was unable to provide satisfactory service to

the customers. The TA is well aware of the consumers’ concern about the

service providers’ sales and marketing tactics as well as the contractual issues.

In fact, OFTA has been working closely with the industry to ensure that the

sales and marketing activities are conducted in a satisfactory manner. For

example, OFTA has issued on 12 November 2004 the Code of Practice for the

Service Contracts for the Provision of Public Telecommunications Services,

which covers the service contracts of broadband Internet access services.

Section 7M of the Ordinance also prevents licensees from engaging in conduct

which is misleading or deceptive.

Office of the Telecommunications Authority

31 January 2005

- 27 -

Appendix I

Comments Received on Technical Performance Indicators and the TA’s Responses

(1) General Comments

Proposal in the

Consultation Paper

Comments Received The TA’s Responses

The TA will consider

commission an independent

institution to measure the

technical indicators for

residential broadband service

providers.

CC: supports the Government

commissioning an independent

institution to measure the

technical indicators for

residential broadband service

providers. CC urges the

Government to publish the

technical performance statistics

as soon as possible and make

effort to ensure that the

indicators and statistics are

easily comprehensible to

consumers.

Noted.

HKTUG: technical performance

indicators are industry best

practice parameters and

HKTUG is in agreement that

these to be used initially. The

same set of performance

indicators for business services

should be included in later

phases for Small and Medium

Enterprises (SMSs) and

corporate users.

Noted.

IMS: Agrees that the TA should

commission an independent

institution with the necessary

technical expertise to work out

the measurements of the

technical indicators.

Noted.

HGC: The public Internet is an

uncontrolled environment, so it

is impossible to have a set of

meaningful technical

performance indicators as there

are countless reasons giving rise

to service unavailability.

The set of technical

performance indicators will

not gauge the performances of

individual ISPs under all

possible circumstances, but it

will give an indication of the

technical parameters

- 28 -

associated with a range of

applications that are

commonly used by the public.

The TA considers that

availability of these indicators

should foster a more

conducive environment for

customers making informed

choice.

Supernet: OFTA should verify

with the service providers before

publishing the figures. It will

be unfair to the service

providers if the figures are not

correct.

The 2-month consultation

period provided an

opportunity to all concerned

licensees to make

representations on the

proposed disclosure of

information. However, OFTA

may consider giving advance

notice to the service providers

about their own technical

performance before the actual

release of the figures if the

circumstances so warrant.

i-Cable: Technical indicators

cannot be truly objective because

there are many variables in the

measurement process that cannot

be controlled by the service

providers, e.g. customer’s

computer hardware and software

configuration.

We will strive to minimize

uncertainties which might

happen during the

measurement process.

HGC: Alternative indicators such

as bandwidth to HKIX and

overseas Internet service

providers would provide useful

information to the consumers.

Noted.

(2) Download Time from the Service Provider’s Web-site

Proposal in the

Consultation Paper


It refers to the time required for

downloading a file from the

service provider’s web-site to

the customer’s computer.

HGC: Only those indicators

involving transmission between

end user and the service

provider (i.e. download time

from service provider's web

Noted.

- 29 -

site and upload time to service

provider's FTP server) can be

given by HGC. All other

suggested indicators involve

third party network and

equipment, and are

uncontrollable.

i-Cable: A dedicated server

should be developed and used

in the download test so as to

reflect the network

performance in a fair and

correct manner.

The objective of the

measurement is not to reflect

the optimal network

performance of individual

service providers but the

general performance

perceived by the consumers

during their normal use. The

TA does not see how the use

of a dedicated server is

conducive to attaining this

objective.

(3) Download Time from a Local Web-site

Proposal in the

Consultation Paper



downloading a file from a local

web-site other than the service

provider’s to the customer side.

In order to measure the

download time, a

representative web-site in Hong

Kong should be selected to

facilitate the measurement.

Since most of the major service

providers have direct

connections with the Hong

Kong Internet Exchange

(HKIX) for routing their local

Internet traffic, OFTA proposes

to designate the web-site of the

HKIX (www.hkix.net) as the

“local web-site” in the

measurement.

HGC: Only those involving

transmission between end user

and the service provider (i.e.

download time from service

provider's web site and upload

time to service provider's FTP

server) can be given by HGC.

All other suggested indicators

involve third party network and

equipment, and are

uncontrollable.

As the leased lines connecting

the service providers and

HKIX should not involve any

third party network,

measurement of the indicator

should be effective and

objective.

(4) Download Time from Overseas Web-sites

- 30 -

Proposal in the

Consultation Paper



downloading a file from a

group of overseas web-sites to

the customer’s computer.

Three representative overseas

web-sites that are popular with

users of Hong Kong in respect

of browsing activities would be

selected.










equipment, and are

uncontrollable.

Noted. The institution to be

commissioned will consider the

comment.

i-Cable: Upstream providers of

the overseas websites, cache

servers of some service

providers and the file size for

downloading may affect the

correctness of the measurement

results.



comment.

(5) Upload Time to the Service Provider’s FTP Server

Proposal in the

Consultation Paper



uploading a file using FTP

from the customer’s computer

to the service provider’s FTP

server.










equipment, and are

uncontrollable.

Noted.

i-Cable: A dedicated server

should be developed and used in

the upload test so as to reflect

the network performance in a

fair and correct manner.

The objective of the

measurement is not to reflect

the optimal network

performance of individual

service provider but the general

performance perceived by the

consumers during their normal

- 31 -

use. The TA does not see how

the use of a dedicated server is

conducive to attaining this

objective.

- 32 -

(6) Network Latency

Proposal in the

Consultation Paper



a network to respond to a

customer command. This

indicator serves as a

quantitative figure to reflect the

round trip delay which is

crucial to real-time interactive

applications such as on-line

games. Three representative

overseas servers that are

popular with users of Hong

Kong in respect of real-time

interactive applications would

be selected.

i-Cable: The measurement of the

network latency may not be

possible because some of the

upstream providers may block

‘ping’ or ICMP protocol.



comment.

(7) Measurement Methodology

Proposal in the

Consultation Paper


File size: Taking into account

the typical size of multimedia

files (e.g. JPEG photos) and the

need to avoid overloading the

network during the

measurement, the file to be

used in the download and

upload process should be

approximately 2 M bytes in

size.

i-Cable: In order to achieve the

highest download speed, a file

size of 2M bytes is not large

enough to give the testing

computer and server sufficient

time to achieve their highest

performance.

The institution to be

commissioned will take this

into consideration.

However, it should be pointed

out that the measurement is

not intended to reflect the

optimal network performance

of individual service provider

but the general performance

perceived by the consumers

during their normal use.

Peak hour: 23:00-24:00 hour,

based on the switching

statistics of the HKIX.

i-Cable: A measurement during

non-peak hours is needed as a

comparison to that obtained

during peak hours to give a

more representative picture on

the network performance of the

operator using IBCCDS based

facilities.

It is noted that “peak-hour” is

commonly used as a reference

time window to compare

network performance. Taking

into account the difficulty in

reaching an industry consensus

on the reference time window

outside “peak hour” and the

resources required in the

measurement, the TA considers

- 33 -

that “non-peak hour”

measurement is not worthwhile.

However, the TA may consider

advising the consumers that the

network performance might

vary significantly during peak

and non-peak hours. One

possible means is to incorporate

a note to the measurement

results.

Measurement locations: 20

locations at the customer side

which are to be randomly

selected within the coverage

area of a broadband network

and the selected locations

should be spaced out evenly.

i-Cable: The proposed 20

measurement locations are not

sufficient and the measurement

results would not be meaningful.

It considers that the sample size

should be at least 300.

Conducting measurement at

more than 300 locations comes

at a price. The costs and

benefits need to be assessed and

weighted against each other.

The apparatus to be deployed

should be a personal computer

with the widely used hardware

and software configurations

(e.g. web browser).

NWT: In order to provide a fair

comparison of the technical

performance indicators among

various service providers, all

testing and measurements

should be done under same

conditions. NWT raised

several queries about the test

mode, test frequency, test

standard, test date, test location

and the overseas website details.

The consultation paper was

intended to outline the

measurement framework with a

view to facilitating industry

submissions of proposals. The

TA will commission an

independent institution with

technical expertise to work out

the detailed measurement

arrangements.

The technical performance

indicators should be measured

at the customer side and during

peak hour to reflect the real

network situations.

i-Cable: Some service providers

offer both broadband Internet

access and other multimedia

services (e.g. television service).

The comparison of the

measurement results between (a)

broadband service and (b)

broadband service with

multimedia service, is unfair.

The consumers may be

confused.

The measurement is intended to

place a focus on the

performance of Internet

connection from a user’s

perspective. The TA proposed

in the Consultation Paper that

an indicator should be the

average values collected from a

number of samples concerned.

Therefore, the indicator should

be able to provide a fair

assessment on the overall

bandwidth performance. In

any case, the institution to be

commissioned will take this

into consideration.

- 34 -

Appendix II

Information to be Disclosed on Helpline Numbers, Billing and Service

Termination

1. Helpline Numbers

Contact information of service providers will be made available under the QoS

framework so that customers or potential customers could be aware of the

appropriate channels to communicate with the service providers. Sufficient

contact information should be made available such that common types of

customers’ enquiries including general enquiry, billing enquiry, technical

helpdesk, sales registration, etc. can be catered for. Service providers can

choose to disclose one single general hotline number, or several different

hotline numbers which address different categories of customers’ enquiries.

To allow customers or potential customers to have effective channels to contact

the service providers whenever necessary, the minimum contact information to

be provided should consist of the following:

(i) telephone number, and

(ii) e-mail address.

2. Billing Information

Billing information will be made available under the QoS framework. Billing

information should clearly and explicitly specify the rights and obligations of

each party during the entire process of bill handling procedures, from issuance

of bill to bill dispute resolution, such that customers can have sufficient

information to make informed choices.

Billing information should at least include the following:

(i) method of delivery of bills,

(ii) payment options, and

(iii) deadline for raising dispute.

- 35 -

Method of delivery of bills - Service providers should set out all options of

methods of delivering bills to customers, such as electronic bill by email, paper

bill by post, and any other options available to customers (e.g. Braille bill for

blind people or a bill with larger character size for people with reading

difficulty, etc.). Where surcharge is levied on customers for requesting a

particular method for delivering the bill or other special requirements on the

presentation of the bill, service providers shall explicitly specify the surcharges

as well as other relevant terms and conditions.

Payment options – Service providers should set out all payment options

available to customers for settling the bill, e.g. auto-pay, PPS, cash, cheque, etc.

Where deposit or surcharge is required for a particular mode of payment,

service providers shall explicitly specify the amount of deposit required as well

as other relevant terms and conditions.

Deadline for raising dispute – Service providers should specify the deadline, if

any, for customers to raise dispute on bill.

3. Information on Service Termination

Service providers shall specify information on service termination so as to

inform customers on relevant procedures and potential liabilities arising from

service termination. The information should be sufficient and clear enough in

order to avoid disputes.

Service termination information should at least include the following:

(i) Service termination fee,

(ii) Period of notice for service termination, and

(iii) Relevant procedures to request for service termination.

Service termination fee – Where a fee is levied on customers for terminating

the service, the calculation basis of the fee as well as other relevant terms and

conditions should be fully disclosed. The service termination fee for

customers who are still bound by a fixed-term contract may be different from

that for customers who are not. Service providers should clearly and

explicitly specify the fee, the relevant terms and conditions for terminating the

service for customers bound by different types of contracts.

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Period of notice for service termination – Service providers should specify the

period of notice (either in calendar days or working days) required for service

termination as well as other relevant terms and conditions. If customers

bound by different types of contracts are subject to different requirements of

period of notice, all details should be clearly and explicitly specified.

Relevant procedures to request for service termination – Where customers are

required to follow a standard procedure for service termination, such as filling

in service termination application form, returning certain equipment, etc., the

detailed procedures shall be explicitly set out.

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Appendix III

Comments Received on Service Performance Indicators and the TA’s Responses

(1) Complaint Handling Time

Proposal in the Consultation

Paper


“Complaint” is defined as an

expression of dissatisfaction

with the service provider or

the service provided, received

from a user or a member of

the public by the service

provider.

NWT: Service provider

provides service and

satisfaction to its customers

and owes no particular duty to

members of the public.

Therefore the definition of

“complaint” should not include

“expression of dissatisfaction

from a member of the public”.

The TA does not subscribe to

NWT’s view. When a service

provider carries out sales and

marketing activities to the potential

customers or provides service to its

existing customers, it is possible that

the service provider may conduct

some behaviour which may cause

dissatisfaction from members of the

public. As a responsible service

provider, it should resolve the

complaints within a period of

pledged time. However, it should

be noted that so long as either one of

the criteria as set out in Appendix IV

is met, the complaint will be

regarded as having been “resolved”

by the service provider.

A complaint will be regarded

as having been “Resolved” by

the service provider when (i)

the complainant agrees that

all issues have been

satisfactorily dealt with; (ii)

the complaint is withdrawn;

OR (iii) the service provider

has completed all stages of its

internal complaint handling

procedures and has informed

the complainant accordingly.

HGC: The proposed definition

of complaint resolution, which

requires the complainant to

agree that all issues have been

satisfactorily dealt with, is

quite ambiguous. It would be

difficult to assess the service

provider’s performance based

on such ill-defined yardsticks,

and consumers would very

likely be misled.

It should be noted that a complaint

is regarded as having been resolved

under either one of the following

scenarios: (i) the complainant agrees

that all issues have been

satisfactorily dealt with; (ii) the

complaint is withdrawn; or (iii) the

operator has completed all stages of

its internal complaint handling

procedures and has informed the

complainant accordingly. As such,

even the complainant does not agree

that all issues have been

satisfactorily dealt with, the

complaint is still deemed as having

been resolved as long as the

operator has completed all stages of

its internal complaint handling

- 38 -

procedures and has informed the

complainant accordingly, or the

complaint is simply withdrawn.

NWT: A complaint should be

regarded as resolved if the

operator cannot contact the

customer for investigation or

otherwise fails to obtain the

customer’s full cooperation in

an investigation.

Agrees. Please see Appendix IV

for the amendment made.

Law Society: When a major

fault occurs, customers might

not even be able to get

connected to the service

provider’s hotline to report the

fault. How can this “line

busy” situation be counted in

the calculation?

The TA agrees that the indicator

cannot capture those calls which

cannot get through to the service

provider’s hotline.

Complaint acknowledgement

time

IMS: Unnecessary since the

pledges and statistics on

complaint handling time appear

to be more meaningful to

consumers.

Customers would not feel satisfied

unless the complaint is resolved.

The TA agrees that statistics on

complaint handling time is much

more meaningful and important to

consumers, and therefore decides

not to include complaint

acknowledgement time as one of the

indicator. Please see Appendix IV

for the amendment made.

(2) Enquiry Call Answering Time

Proposal in the Consultation

Paper


HGC: The indicator depends on

a number of factors, e.g. no.

and scale of promotional

programmes offered to

customers within a certain

period of time. An average

figure would not give any

meaningful indication of the

service provider’s QoS. Any

statistics so published can be

misleading unless they are

From the consumers’ perspective,

the main concern would be how

long it would take for a service

provider to answer their enquiry

calls. They would not care

whether there are promotional

programmes being offered to

customers. In fact, if the service

providers foresee that the launch of

promotional programmes would

affect their performance on

- 39 -

heavily and clearly qualified to

the extent necessary to explain

to consumers all relevant

factors which may have a

bearing on the “Answering

Time”.

answering enquiry calls, they should

consider arranging more staff to

answer the enquiry calls such that

the pledged service level would be

achieved.

If the service provider

operates an interactive voice

response system (“IVRS”) for

answering enquiry call, the

measurement of “Answering

Time” should commence

when the customer chooses

the option to talk to the

hotline operator.

IMS: It is unclear whether (i)

the time for a customer to wait

for getting connected to the

IVRS and (ii) the time used in

interacting with the IVRS,

should be considered as the

“Answering Time”.

The measurement of “answering

time” should commence when the

customer chooses the option to talk

to the hotline operator. As such,

the time for customer to wait for

getting connected to the IVRS and

the time used in interacting with the

IVRS would not be counted as the

“answering time”.

IMS: Will the call be counted

in the calculation if the

customer does not need to talk

to the hotline operator?

When the customers do not need to

talk to the hotline operator, they are

normally seeking information by

interacting with the IVRS and the

information would be made

available automatically. As such,

there is no point to include this type

of enquiry calls in the indicator.

Consumers would be more

concerned about the waiting time for

an operator to answer their calls.

In fact, according to the definition,

“enquiry call” covers the customer

interface with the hotline operator

on all issues. Therefore, if

customers do not need to talk to the

hotline operator, these calls should

not be counted. Amendment has

been made to the definition to

highlight this particular point.

Please refer to Appendix IV for the

amendment made.

IMS: If the customer waits too

long to get connected to the

IVRS and abandons the call,

will this call be included in the

total number of calls

abandoned?

Law Society: Sometimes,

customers might not be able to

Only those calls waiting to be

answered by a hotline operator

would be relevant to the calculation.

Since some customers waiting to get

connected to the IVRS do not need

to talk to the hotline operator, the

abandoned calls envisaged by IMS

should not be counted in the

calculation. On the other hand, if

- 40 -

get connected to the service

provider’s hotline. How can

this “line busy” situation be

counted in the calculation?

the customer has chosen to talk to a

hotline operator and has waited too

long to be answered, and therefore

abandoned the call, this call should

be counted in the total number of

abandoned calls.

The TA agrees that the indicator

cannot capture those calls which

cannot get through to the service

provider’s hotline or IVRS.

- 41 -

Appendix IV

Finalised Definitions and Calculation Methodology for

Service Performance Indicators

1. Complaint Handling Time

The indicator measures the performance of the service provider in resolving

complaints within the period of pledged time, i.e. performance pledge on

complaint handling time.

Definitions

“Complaint” is defined as an expression of dissatisfaction with the service

provider or the service provided, received from a user or a member of the

public by the service provider, whether or not the complainant has used any key

words such as “complaint” or the complainant's tone of voice is irate. The

dissatisfaction must be related to “non-performance of the contractual

agreement by service providers”. All complaints irrespective of the means by

which they were communicated (including telephone, fax, letter or email) shall

be included. It should be noted that a complaint should not be confused with a

query (a request for information) or with a fault report (when a customer is

reporting a service or equipment failure, etc.)

A complaint shall also be included irrespective of whether it is deemed by the

service provider to be justified, or whether it is satisfactorily processed at the

first point of contact. Complaint about how a fault has been handled should be

counted as a complaint, although the original fault report itself is not counted as

a complaint. A single complaint that involves several service issues requiring

different timeframes to process should nonetheless be counted as one complaint.

It should not be deemed to be resolved until all the individual issues are

themselves processed.

A complaint will be regarded as having been “Resolved” by the service

provider when:

� The complainant agrees that all issues have been satisfactorily dealt

- 42 -

with;

� The complaint is withdrawn;

� The service provider has completed all stages of its internal complaint

handling procedures and has informed the complainant accordingly; or

� The operator cannot contact the customer for investigation or fails to

obtain the customer’s full cooperation in an investigation.

Calculation Methodology

The complaint handling time should be presumed to be roughly the same

regardless of the means by which the complaint was communicated to the

service providers.

% of complaints resolved within the pledged time during the period being

reported upon

= 100 * A / B

where

A = No. of complaints received during the period resolved within

the pledged time

B = Total number of complaints received during the period

2. Enquiry Call Answering Time

This indicator measures the performance of the service provider in fulfilling its

commitment in answering the enquiry call within the period of time pledged by

the service provider, i.e. performance pledge on enquiry call answering time.

Definitions

“Enquiry Call” covers the customer interface with the hotline operator on all

issues. If the customer can get all the required information by interacting with

the interactive voice response system (“IVRS”) and does not need to talk to

hotline operator, this call should not be counted in the calculation.

If the service provider operates an IVRS for answering enquiry call, the

measurement of “Answering Time” should commence when the customer

- 43 -

chooses the option to talk to the hotline operator (i.e. the time for a customer

waiting to get connected to the IVRS or interacting with the IVRS would not be

counted as “Answering Time”). In the absence of an IVRS, the measurement

should start when the customer hears the first ringing tone.

Calculation Methodology

Some service providers may pledge different target times for answering

technical support enquiry call, customer service enquiry call and other types of

enquiry call. For those service providers who do not have separate pledges,

they can make a single pledge for answering all kinds of enquiry call.

Scenario 1 – The service provider has made different pledges for answering

different types of enquiry call

% of calls for a particular type of enquiry answered within the

pledged time during the period = 100 * A / (B+C)

where

A = Total number of calls for a particular type of enquiry

answered within the relevant pledged time during the period

B = Total number of calls for a particular type of enquiry

answered during the period

C = Total number of calls for a particular type of enquiry

abandoned during the period

Scenario 2 – The service provider has made a single pledge for answering all

types of enquiry call

% of enquiry calls answered within the pledged time during the

period

= 100 * A / (B+C)

where

A = Total number of enquiry calls answered within the pledged

time during the period

B = Total number of enquiry calls answered during the period

C = Total number of enquiry calls abandoned during the period

- 44 -

Appendix V

Implementation Timetable for the

Publication of Performance Pledges and Statistics of Service KPIs

(For Service Providers Participating in the QoS Scheme on

Both Mandatory and Voluntary Basis)

First Year of Implementation

31 Jan 2005 - TA announces his final decisions on the QoS framework.

- The detailed definition and calculation methodology of the two

service KPIs are finalised.

- The list of the top four residential broadband service providers is

announced for the first year of implementation.

Feb – Mar 2005 - Voluntary participants are required to notify the TA before 15 Mar

2005 if they wish to have their service information and service KPIs

published on OFTA’s website in August 2005.

- Service providers to make preparation for collecting the required

statistics of the two service KPIs.

The 1st Quarter

Apr – Jun 2005

- Service providers to collect statistics of the service KPIs for the 1st

quarter.

31 Jul 2005 - Service providers to submit their performance pledges and statistics

of service KPIs for the 1st quarter to OFTA together with a letter

signed by the chief executive officer, directors or company secretary

of the company.

Aug 2005 - OFTA to publish the QoS comparison table on its website.

The 2nd Quarter

Jul – Sep 2005

- Service providers to collect statistics of the service KPIs for the 2nd

quarter.

31 Oct 2005 - Service providers to submit their performance pledges and statistics

of service KPIs for the 2nd

quarter to OFTA together with a letter


of the company..

Nov 2005 - OFTA to update the QoS comparison table on its website.

The 3rd Quarter

Oct – Dec 2005

- Service providers to collect statistics of the service KPIs for the 3rd

quarter.

31 Jan 2006 - Service providers to submit their performance pledges and statistics

of service KPIs for the 3rd



of the company.

Feb 2006 - OFTA to update the QoS comparison table on its website.

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The 4th Quarter

Jan - Mar 2006

- Service providers to collect statistics of the service KPIs for the 4th

quarter.

30 Apr 2006 - Service providers to submit their performance pledges and statistics

of service KPIs for the 4th



of the company.

May 2006 - OFTA to update the QoS comparison table on its website.

providing quality of service (“qos”) information to...

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