Application Procedures and Arrangements for Shared Use of the Fibre-based Networks to Villages in Remote Areas Under the Subsidy Scheme by Qualified Fixed Network Operators for Projects 1, 3 and 4
1. Background
The Office of the Communications Authority (“OFCA”) has implemented a subsidy scheme1 (“Scheme”) to provide fixed network operators (FNOs) with financial incentives in the form of subsidies to encourage the extension of fibre-based networks (“Network”) 2 to villages in remote areas. The Scheme covers 235 villages across nine districts in the New Territories and outlying islands (namely North, Sai Kung, Tai Po, Sha Tin, Yuen Long, Tuen Mun, Tsuen Wan, Kwai Tsing and Islands). These 235 villages are grouped under six projects. After conducting two tender exercises, OFCA awarded Project 1 (North) (“Project 1”), Project 3 (Part of Sha Tin, part of Tai Po, Yuen Long, Tuen Mun, Tsuen Wan and Kwai Tsing) (“Project 3”) and Project 4 (Part of Sha Tin and part of Sai Kung) (“Project 4”) (collectively the “Relevant Project”) to HGC Global Communications Limited (“HGC”). HGC is required to roll out fibre-based lead-in connections (“LIC”) to the vicinity of the entrances of the villages concerned (applicable to Projects 1, 3 and 4) (“Village(s)”).
2. Sharing of the Network with other FNOs
HGC shall share at least 50% of the capacity of the LIC between the network interconnection point (means one of the two end points of the LIC where interconnection with the fibre-based networks of the Qualified FNOs (as defined in Clause 2(a) below) takes place) (“Network Interconnection Point”) and the network termination point (means one of the two end points of the LIC where the LIC terminates in the vicinity of the entrance of the Village concerned) (“Network Termination Point”) under the Relevant Project, in relation to Villages which obtained the project milestone completion certificate(s) issued by OFCA, for use by the Qualified FNOs in accordance with the requirements set out below:
(a) Qualified FNO:
i. A “Qualified FNO” refers to an FNO which holds a carrier licence issued by the Communications Authority pursuant to the Telecommunications Ordinance (Chapter 106 of the Laws of Hong Kong) for the provision of public internal fixed telecommunications services in Hong Kong (“Relevant Carrier Licence”) and a block licence issued by the Lands Department to an FNO for laying telecommunications facilities on unleased Government land or public street (“Block Licence”), and is not connected with HGC of the Relevant Project concerned;
ii. an FNO (FNO A) is regarded as “connected” with another FNO (FNO B) if:
(I) FNO A holds a “material interest” in FNO B;
(II) FNO B holds a “material interest” in FNO A; and
(III) FNOs A and B are under common ownership of a third party who holds a “material interest” in both FNOs A and B;
iii. a “material interest” refers to a direct or indirect interest of one of the following
(I) a holding of or a right to acquire or subscribe for 25% or more of the issued share capital of the body corporate;
(II) a holding of or a right to acquire voting power in respect of 25% or more of the issued share capital of the body corporate; and
(III) control of the body corporate through holding of, a right to acquire or having voting power of 50% or more of the issued share capital of the body corporate, or through other means by which the affairs of the body corporate are conducted according to the wishes of the holding party.
(b) With respect to the Network (or any part thereof) deployed using underground duct system, so far as the part using underground duct system is concerned, HGC shall make available on aggregate at least 50% of the number of underground ducts laid to at least four (4) Qualified FNOs which are not connected with each other, with each Qualified FNO sharing at most one-fourth of the capacity made available for sharing. HGC has no obligation to install any fibre cables in the underground ducts to be shared with the Qualified FNOs.
(c) For the avoidance of doubt, the sharing of Network means sharing of the entire LIC from the Network Interconnection Point to the Network Termination Point of the Village concerned. HGC has no obligation to offer sharing of the LIC to any Qualified FNO on a partial basis.
(d) HGC shall provide facilities and services reasonably necessary for the prompt and efficient shared use of the Network. Examples of such facilities and services may include but not be limited to:
i. carriage services for the delivery of codes, messages or signals or other communication across and between the interconnected networks;
ii. those facilities necessary to establish, operate and maintain interconnection between the Network and the networks of the Qualified FNOs which have entered into Network Capacity Agreements (as defined in Clause 3(d) below) with HGC in relation to the shared use of the Network (“Parties Sharing Use”); and
iii. other ancillary facilities and services required to support the shared use of the Network.
(e) HGC shall make available the Network for Qualified FNOs to use on a non-discriminatory basis.
(f) HGC shall not levy any charges for access to and / or usage of Network on the Parties Sharing Use, but may recover reasonable expenses incurred by HGC as set out in Clause 3(d) below.
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