- The Washington Times - Sunday, July 9, 2006

A typical family in Hong Kong can choose from among four broadband Internet providers, some of which offer high-speed connections of 100 megabits per second for about $30 a month. A U.S. household, whether city or rural, usually has two provider choices and pays about $40 monthly for connection speeds of 1.5 megabits per second, the lowest offered in Hong Kong.

The higher speeds allow for real-time video conferences, enhanced sound quality and the ability to share massive files. They also eliminate much of the lag time involved with downloading and watching large video files, which will become more prevalent as high-definition programming evolves.

Most of Hong Kong’s 6.9 million residents live in high-rise buildings with hundreds of other families, which makes it easier and more cost-effective for providers to connect homes compared with the 300 million Americans spread across a vast country.

U.S. companies, however, are interested in Hong Kong’s free-market system and consumer choices, said M.H. Au, Hong Kong’s director-general of telecommunications.

Broadband networks cover all of Hong Kong’s commercial buildings and 98 percent of its residences, and 65 percent of households have high-speed connections. In the U.S., 72 percent of homes use broadband connections, up from 57 percent last year, Nielsen/NetRatings reported.

The Hong Kong telecommunications market faces limited regulatory hurdles and no foreign ownership restrictions. The open market should appeal to U.S. investors looking for global network hubs and local providers, Mr. Au said.

Hong Kong uses facility-based competition with parallel networks, rather than the resale of Internet pipes that is common in the U.S. The city is among the world’s best from a telecommunications operator’s point of view, Mr. Au said.

Mr. Au was in Washington last month to meet with representatives from the Federal Communications Commission, which helps regulate the U.S. telecommunications industry, and the Telecommunications Industry Association (TIA), which in December will bring as many as 50 U.S. companies to an International Telecommunications Union conference in Hong Kong.

Mr. Au gave TIA members an overview of Hong Kong’s telecommunications environment in an effort to lure investment.

The FCC and Hong Kong’s government are taking a “hands-off, technology neutral” position on telecommunications regulation, said Jason Leuck, TIA vice president of global policy.

Matthew Flanigan, president of the Arlington-based association, said he expects Internet connections to U.S. homes to reach 100 megabits per second within five years, although he could not predict how much that will cost consumers.

Hong Kong, unlike mainland China, objects to online censorship. Broadband providers in Hong Kong initially blocked Voice over Internet Protocol (VoIP) telephone service but relented when faced with a legal provision that prohibited restrictions on any telecommunications messages. The rule was not drafted with VoIP in mind but was wide enough to cover it, Mr. Au said.

“In principle, when a consumer has already paid for the broadband connection, they should be free to access all applications,” he said. Providers should at least make a “best effort” to deliver the application. If they do not, consumers can choose to use a competitor, he added.

Hong Kong trails the U.S. in adopting digital, high-definition television (HDTV). All U.S. broadcasters must transmit digitally by February 2009.

Hong Kong has been waiting for China to adopt a digital standard and will choose its own if no agreement is reached by the end of the year. Broadcasters will need to start complying by the end of 2007, Mr. Au said, and all analog service should be shut down by 2012.

“My friend was watching the World Cup in high-definition television with 5.1 surround sound, so I think this is something that I need to bring back to Hong Kong, that we need to catch up on this one,” he said.

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