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This case investigates the issues and difficulties of IDD connection when there is policy asymmetry between two regions/countries, and highlights the importance of interconnection decisions. The unilateral sudden increase in interconnection charges by China Telecom in November 2002, is cited as an example. The response of Hong Kong’s IDD operators and the regulatory authority are described. The case also goes back into the Hong Kong Telecom (the monopoly) era when technical innovators find ways to offer new services which undercut or bypass monopolistic arrangements. This kind of innovation and entrepreneurship is possible, however, only when there are also liberal arrangements on the foreign side of the circuit. Reasons for the failure of the accounting rate system are identified. The findings provide a factual base for policy discussions on interconnection decisions.