NCC has power and obligation to protect people's rights

Under the directive by the National Communications Commission (NCC) that will cover a period from April 1 to March 31, 2013, local carriers must lower mobile phones rates by 5.87 percent and landline service (local and long distance calls as well as Internet connection via asymmetric digital subscriber lines or ADSL) rates by 4.816 percent.

Companies failing to comply to the directive are subjected to fines from NT$300,000 to NT$5 million and may have their licenses suspended. The service carriers are calling foul. After the executives from Chunghwa Telecom, Taiwan Mobile, Far Eastone Telecom and Vibo Telecom met in January, the four carriers combined, who represent over 90 percent of Taiwan's mobile market share decided to go head on with the NCC. The companies will produce their own price cut plans by March and are prepared to plead their case to the Executive Yuan.

“Telecom companies are prepared for the NCC's penalties,” a spokesperson from the Taiwan Telecommunication Industry Development Association said. The nearly 6 percent mandatory cut could be a potentially devastating blow to the carriers' revenue, many in the private sector worried. The plan, which will affect an estimated 40 million users, could cost the industry NT$20 to 30 billion. The NCC's estimation, in comparison, put the number at NT$3.5 billion. Even NT$30 billion might seem less than it appears compared to the over NT$60 billion combined annual profits the three major carriers (Chunghwa, Taiwan Mobile and Far Eastone) posted from 2007 to 2008. In the three quarters in 2009 alone, the three companies posted a total profit of NT$50.5 billion. Since the telecom companies enjoy less competition as the number of government-granted licenses is limited, they should redistribute part of their high profits to customers and provide better services, the NCC said. The government also called on the private sector to look beyond short term profit and think about the greater good to the industry's development as prices become more affordable.

However, the carriers explained that the NT$60 billion profits only appear on the books, as the multimillion-NT-dollars they paid to set up base stations for 3-G cellular service is written off as expenditures by installment. The government plan will substantially limit the carriers' ability to upgrade their service as their revenue dries up and will actually hurt customers. Wireless bandwidths are public property, carriers that build their profits on them should therefore consider themselves not only as private companies. The government has the responsibility to monitor the telecom business in order to protect the people's rights. A more hands-on approach by the NCC will earn deserved cheers from the public.

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