Off-Line City

For Hong Kong’s power elite, the communications crisis that began on December 26 when the sea floor south of Taiwan suddenly heaved and damaged a clutch of undersea cables has long since been over. But for the thousands of small and medium-sized enterprises that find access to the Internet to be crucial, it is anything but over.

“We are suffering,” said Christopher Slaughter of APV, a Hong Kong production company. “We are a typical SME and we don’t have a dedicated IT department, not a particularly well-developed internet network to begin with. Our net configuration is far from optimal at the best of times. And when we are now faced with problems with our internet service provider, it has turned a livable situation into a nightmare.”

Slaughter, also the president of Hong Kong's Foreign Correspondent's Club, is remarkably philosophical about his troubles. But the communications disaster for these SMEs is adding to Hong Kong’s already tarnished reputation as a financial center, says a frustrated personal investor. Nine days after the 7.1 earthquake fractured the bundles of fragile 20-mm fiber-optic cables 3,400 meters beneath the sea that deliver massive amounts of data to and from Asia, the hoi polloi of the business world are still scrambling just to open their email or access their own websites. (That includes the Asia Sentinel, whose editors have had only intermittent even access to our administrator website.)

“Superb communication has been a Hong Kong hallmark,” said the investor. “That has been tarnished. I would have hoped for rather more resilience, particularly what in the scheme of things should not have been an overwhelming disaster.”

In many countries, an Internet breakdown of this magnitude would be considered a major crisis, but in Hong Kong the various powers that be have been largely silent. The Office of the Telecommunications Authority (OFTA), with jurisdiction over communications, merely issued a bland press release saying 80 percent of communications had been restored. PCCW, the territory’s fixed-line carrier, referred all questions to OFTA. A Legislative Council member said a meeting wouldl be held in10 days time to discuss the issue. The government itself has largely not brought it up. The Hong Kong Chamber of Commerce referred questions to OFTA.

Nobody yet has calculated the financial damage to companies that depend on the Internet for business, but it must be staggering. Internationally, call centers particularly face continuing delays. In the Philippines, which just over the last couple of years has begun to develop a strong call-center industry, the major telecommunications company PLDT has been scrambling to find alternate routes. Some call centers say they are worried about losing clients permanently. As of Jan. 4, the Japan office of the Asia Development Bank still had no access to the bank’s Internet or intranet and was even cut off from the Bank’s internal headquarters telephone system in Manila.

But Hong Kong particularly appears in a state of denial. OFTA, in its Jan. 2 press release, assured the media that everything is good and getting better:

“Over the past week,” the authority press release said blithely, “there has been continued improvement in the access to the Internet. The major Internet service providers have recovered about 80 percent of their international connection capacity. During the normal business hours, the Internet services for business users should be basically acceptable.”

The release described access to overseas websites as “generally slower than usual,” an astonishing understatement. For most of Hong Kong's small businesses, there has been no progress at all. Although the investment banks, insurance companies and other heavy hitters of the corporate world are largely back to normal, it is because nearly all have alternative sources of communication.

“We have a lot of redundancy,” said an information technology specialist for a major bulge-bracket American investment bank. “We also have a lot of indirect links, a lot of different ways to move information and we have had. The idea once was that the Russkies would bomb a city in the US and we would need to have alternative ways of moving information.”

For the SMEs, however, there is no redundancy and there are plenty of questions as to why PCCW has been unable to provide it. One source ascribed the telecommunications company’s dilemma to a “massive lack of contingency planning” and speculated that corporate turmoil stemming from the failed attempt to sell the company by Richard Li had contributed to PCCW’s lack of response as executives turned their attention elsewhere.

“They should have had the ability to call on capacity, to route (data transfer) in other ways,” he said. “I can understand not being able to get full capacity, but we shouldn’t be without the ability to have people contact us.”

He also speculated that PCCW has been allocating capacity to those they regard as high-priority customers. “I suspect that if you are a major customer, an investment bank, you have got 90 percent plus capacity. But if you are a nobody, you have no capacity. Residential users are at the end of the line, small business users the same.”

As noted, a PCCW spokesman referred all questions to OFTA but did repeat that 80 percent of capacity has been restored. At this point, one damaged cable is expected to be brought to the surface and repaired “by the middle of the month,” according to an OFTA spokeswoman, who declined to be interviewed or to furnish an official to be interviewed.

“This should significantly improve the situation,” the press release said. “The repair of the other damaged systems is expected to be completed progressively by the end of January or by the beginning of February, if the environment and the weather permit.”

In the United States or Europe, a communications failure of this magnitude almost certainly would be an occasion for a government investigation. So far, however, there have been no calls for a probe on the part of either the government itself or members of the Legislative Council, Hong Kong’s mini-parliament.

Sin Chung-kai, a Democrat Party member who represents the information technology functional constituency, said in an interview that the failure would be the subject of a committee meeting on Jan. 15 – the day theoretically that one cable is brought to the surface for repair.

Sin, however, said that his office has received few complaints, although OFTA has received more than 100. “I think at the moment, the overall infrastructure has been recovering,” he said. “Definitely nobody wants this situation. It seemed chaotic, but we were lucky because it hit during the early days when Hong Kong was on holidays, and most executives were not in town. So demand for traffic has not been high.”

Told that small businesses have been frustrated by their delayed access to Internet communications, Sin answered: “We need to look into the issues, to see whether we should have bypassing routings.”

Indeed they do. Said the IT specialist for the American investment bank: “Wherever we are in the world, we would never rely on a single link, and for us there are always ways to switch.”

Rerouting means a diminution of line quality as too much traffic is rerouted through other links, he said. But for those without the ability to switch, diminution is not an option.