Consumer Council Submission Telecommunications Authority Consultation Paper Creation of Class Licence for Terminal Equipment

Introduction

1.　The Consumer Council welcomes this opportunity by the Telecommunications Authority (TA) to provide comments on the above proposal to create a system of class licences for terminal equipment.

2.　As noted in the consultation paper, terminal equipment in the context of the proposal refers to the equipment which is used or is intended for use by a customer of :

1. the holder of a fixed carrier licence;
2. a mobile carrier licence;
3. a fixed telecommunications network services (FTNS) licence;
4. a public radiocommunications service (PRS) licence; or
5. a public non-exclusive telecommunications service (PNETS) licence

  　collectively referred to as "public telecommunications network or service licences").

3.　The proposal therefore covers persons who use radiocommunications apparatus such as mobile telephones and apparatus for non-radiocommunications such as telephones, fax terminals, private automatic branch exchanges (PABX) and modems [1]. Accordingly, it can be assumed that a substantial majority of people in Hong Kong, of various ages, categories of employment, or business, will come under the proposed class licence system.

Reason for class licences

4.　The TA has stated in the Consultation Paper that the reasons for changing to a class licence system is that this method is preferable to the current system of granting exemption from the provisions of section 8(1)(a) and 8(1)(b) of the Telecommunications Ordinance. Those provisions require that

1. any person who establishes or maintains a means of telecommunications is required to obtain a licence; or
2. for radio communications apparatus for direct radio communications with the radio stations licensed under a public telecommunications network or service licence, a licence is required as soon as a person possesses or uses such apparatus.

5.　In paragraph 7 of the Consultation Paper, the TA notes that

　　"as the telecommunications industry is evolving at a fast pace with technological advancement, the class licence regime is considered to be the more appropriate alternative to class exemption in that the TA can be more flexible and efficient in responding to the changing needs of the telecommunications market by creating or amending a class licence in a shorter timeframe. It is not only administratively simple, but also places the operation of the installations and services concerned within the regulatory framework under the Telecommunications Ordinance rather than outside of it."

Council comment

6.　Class licences are used as regulatory tools by telecommunications regulators in other jurisdictions. For example in the United Kingdom and Australia. However, the Council understands that this form of licence control is largely used in those jurisdictions to regulate specifically targeted telecommunications activities or services, with concerns on technical aspects of the services concerned. Examples of class licences in the above two jurisdictions are found in Annex A.

7.　The class licence proposed by the TA is much broader in concept than those found in the attached examples, as it covers all the equipment which comes under the services noted in paragraph 2 above.

8.　The licence is granted on the condition that the user does not use the terminal equipment to provide a public telecommunications service; and sell or lease the terminal equipment in the course of trade or business; and in addition, as a licensee, the user is required to comply with:

1. the Ordinance;
2. regulations made under the Ordinance;
3. licence conditions;
4. guidelines;
5. codes of practice; and
6. any other instruments which may from time to time be issued by the TA under the Ordinance [2].

9.　It appears to the Council that the class licence mechanism in itself appears to be an efficient means to replace the general exemption provisions, and is also a suitable means to control various technical aspects of telecommunications services usage.

10.　The TA has noted that the class licence system is more flexible and efficient in responding to the changing needs of telecommunications markets and that class licences can be created in a short time frame.

11.　Nevertheless, the Council has concerns with the proposed system. Those concerns emanate from the fact that:

1. the means by which consumer usage of telecommunications services can be controlled under the class licence system is extremely wide (as noted in 8 (a) to (f) above);
2. in particular, the extent of control or oversight could conceivably extend to content of telecommunications messages; and
3. there is no clear indication by the TA as to the proposed circumstances of telecommunications usage under which the various mechanisms in 8 (a) to (f) will be put in place.

12.　Such uncertainty goes against the general principle of fairness in the making of laws that affect the interests of consumers as well as service providers.

13.　In view of the fact that the range of issues conceivably within the TA's ambit is so wide, and that there is no clear indication from the TA as to the circumstances under which he will use his powers, the Council cannot support the TA's proposal as it currently stands.

14.　The Council is of the view that until more details on the types of issues that the TA will address under the class licence system are made known, then it would prefer that the current exemption provisions, which are apparently working satisfactorily, should remain. If circumstances arise where a specific issue needs to be addressed quickly, then the public can be given a more detailed proposal on the creation of a specific class licence to address that issue and a more fruitful debate can then arise.

15.　If the TA chooses to proceed with the current broad based class licence proposal then the Council expects that the TA will engage in public consultation before imposing conditions on consumers in the manner in which they use terminal equipment, or transmit material over telecommunications networks.

Annex A 

Examples of Class Licences issued in Australia and the United Kingdom

Australian Communications Authority (ACA)

The ACA describes its class licensing as an effective and efficient means of spectrum management for services where a limited set of common frequencies are employed, and equipment is operated under a common set of conditions. It also involves minimum licence administration by the ACA. A class licence sets out the conditions under which any person is permitted to operate; it is not issued to an individual user, and does not involve licence fees or licence conditions applied to individuals.

Class licences authorise users of designated segments of spectrum to operate on a shared basis. The licences are issued by the ACA by a notice published in the Commonwealth of Australia Gazette.

The ACA has made the following class licences:

• Citizen Band Radio Stations Class Licence
• Handphone Stations (27 MHz) Class Licence
• Radiocommunications Class Licence (861-865 MHz Land Stations)
• Radiocommunications Class Licence (Infrared Devices)
• Radiocommunications Class Licence (Low Interference Potential Devices)
• Radiocommunications Class Licence (Miscellaneous Devices)
• Radiocommunications Class Licence (Radio-controlled Models)
• Radiocommunications Class Licence (Spread Spectrum Devices)
• Radiocommunications (Cellular Mobile Telecommunications Devices) Class Licence 1999
• Radiocommunications (Communication with Space Object) Class Licence 1998
• Radiocommunications (Cordless Telecommunications Devices) Class Licence 1999

United Kingdom Office of Telecommunications (OFTEL) 

OFTEL states that class licences are granted generally to large groups of unnamed people for common telecommunications activities, e.g.

• Class licence for the running of telecommunications systems for the provision of access control services.
• Class licence for the running of telecommunication systems by PTO group associates to provide value added and data services.
• Class licence to run branch systems to provide telecommunication services granted by the Secretary of State under Section 7 of the Telecommunication Act 1984.
• Class licence for the running of telecommunication systems providing value added and data services.
• Class licence to run sound broadcasting systems.
• Class licence for the running of self provided telecommunication systems.
• Class licence for the running of outside broadcast links.
• Class licence to run telecommunication systems for the provision of satellite telecommunication services.
• Class licence to run radio transmission systems for the purposes of controlling and monitoring television and radio cable relay systems.
• Class licence for the running of self provided telecommunication systems in the electricity industry.
• Class licence for conditional access services.
• Class Licence to run broadcast relay systems carrying terrestrial channels only.
• Dover Harbour Board - Class licence for the running of certain branch telecommunication systems connected to the telecommunications system.
• General licence for telecommunication apparatus for the reception of programmes transmitted for general reception by wireless telegraphy and conveyed by means of wireless relay systems.
• Licence for the running of telecommunication systems connected to hearing aids and acoustically coupled apparatus.
• Licence for the running of certain telecommunication systems first run before 5 August 1984 - covers systems first run before 5 August 1984 which met the conditions of the 1981 Telecommunications Act or were exempt from licensing which now require a licence and are not covered by any other licence.
• Class licence to run mobile radio systems to provide telecommunication services to third parties by public service organisations.
• Class licence to run mobile radio systems to provide telecommunication services to third parties granted by the Secretary of State for Trade and Industry under section 7 of the Telecommunications Act 1984.
• Licence for the running of hearing aids and acoustically coupled apparatus which are telecommunications systems.
• Class licence for mobile or portable apparatus connected to land mobile radio telecommunications systems run by British Telecommunications.
• Class licence for mobile or portable apparatus connected to cellular telecommunications systems including class licence for mobile or portable apparatus connected to mobile radio or mobile paging systems.
• Class licence to run branch systems to provide cordless telecommunication services

Notes:
1.　The Consultation Paper notes that radiocommunications apparatus not for direct radiocommunications with the radio stations licensed under public telecommunications network or service licences, such as cordless telephones or wireless local area networks, are not covered in this class licence. The TA has noted that another class licence to cover the use and possession of cordless telephones and other low power devices will be created separately, and that another consultation will be conducted to seek views from interested parties.

2.　As outlined in Annex 2 of the Consultation Paper.