Here as requested in today's phone call are my notes on Hong Kong/ Singapore 
for use in
writing your questionnaire:


The Regulatory Structure in Wayne's e-mail is proposed because of a number of 
regulatory characteristics of Japan which may or may not each apply in HK and 
in Singapore.

We should go through each of the regulatory characteristics of Japan and
determine if it applies in HK and then in Singapore.   For example;

-  The requirement for half-circuits

-   Whether there is a requirement that resellers of local capacity in HK/Sin 
must hold a
    license directly and cannot use a US affiliate to do the trading

 -  Whether resellers in HK and SIngapore sell, or need to sell,  only to 
companies 
    licensed in HK and Singapore
  
 -   The different and lower tax rates in HK and SIngapore - - 16% in HK and 
      from 10% to zero in Singapore compared with the 62% in Japan.  These 
are even
      lower than the US 35% rate.  All other things being equal which they 
never are,
      for HK and Singapore maybe we don't want models that tilt it toward the 
US.
      Maybe we want models that tilt HK and Singapore trades to occur in HK 
      and SIngapore with their lower rates.  Maybe we even want to shovel 
other
      country trades in Asia there. 

-   Also to find out whether the trades are even taxable in HK and Singapore 
in the
      first place.

From conversations with Clifford Chance/HK, already I am pretty certain the 
HK and
probably SIngapore as well differ from the Japan situation in several ways, 
such as:

In Hong Kong:

       - no half circuit requirement .  We can buy/sell capacity from HK all 
the way to 
        US.    HK only cares about what's happening in HK - not the  mid 
points
        in the Pacific.   May be same for Singapore. (?) 

      - our entity buys capacity from properly licensed HK fixed network 
         facilities  based carriers and sells (if sold in HK) to licensed 
entities. 

      - we are a service operator .  we don't get  the circuit itself, we get 
the capacity.
        We buy capacity from a properly licensed HK fixed network carrier
        
      -  may be way for US entity to be used for most of the transaction.
          If our US entity buys and sells capacity from the entity here 
without
          needing any facilities here,  it may be able to do it w/o its own 
license
           in HK:

              If US entity sells to non-HK customers, no license is needed for
                    the sales

              If US entity  sells to licensed HK customers, it may have
                    to get a class license

       -  But again, which is better for us, a US entity or a Hong Kong/ 
SIngapore one,
          tax-wise and regulatory-wise.  

In Singapore , we need to see if it is like HK but I think it probably will
be close.     We need to come up with a model suitable for the HK situation 
with input of 
locally based telecom lawyers and do the same for Singapore.   

Additional notes from the call:

Robbi will take lead  to identify Singapore telecom law firms, and whether 
Clifford Chance is the right firm to continue with in HK.

Need to put in questionnaire Robbi's question about whether buying as well as 
selling
     was covered.  Robbi has specific formulation of question.
 
I will proceed with the Arthur D Little consultant contract for analytical 
support for
our Pioneer Status application in Singapore, working with Anthony Duenner.

I will proceed to progress the Singapore license application using the 
existing SIngapore
entity.   Will get input from commercial.  

Robbi will look at the question of additional directors for the company.
Separate e-mail on that to her.  

David