Taipei Times: At what stage is Level 3 in its move into the Taiwan market?
Liddell: We're just beginning our operations here in Taiwan. Our license application was accepted in January. We received our establishment permit in April which means we can now go ahead and inject capital into the joint venture we've formed with Yulon Motors ... we can incorporate that joint venture, we can register the joint venture ... and from there we can go through the process by which we achieve a concession license in the future.
TT: When will Level 3's Tiger submarine cable make landfall here in Taiwan?
Liddell: The first leg of the cable is already completed between Hong Kong and Japan and will be operational in the second quarter of this year. The next segment which is the connection into Taiwan will be landed in the fourth quarter of this year and we expect to be in full operation in the first quarter of 2002. We tend as a company to quote conservative time frames with the expectation of beating them. We would prefer to do that than quote aggressive time frames and then miss them.
TT: Your company, along with the Office of the United States Trade Representative and international submarine cable company Asia Global Crossing, has been critical of Taiwan's regulatory framework. Is the government taking the right steps to further open the market to new and foreign competition?
Liddell: Taiwan is on a path towards liberalization like many countries where it has adopted a step-by-step process. We firmly believe that an open and liberalized telecommunications market is in Taiwan's long-term best interest. Telecommunications and the services that Level 3 will be bringing to the Taiwan marketplace underpin many aspects of the IT industry. By bringing a large amount of undersea capacity to Taiwan, Level 3 will be able to adopt our strategy of continuously reducing the price of these services to the community of usage. Typically our customers are ISPs, ASPs, content providers and other telecommunications providers. Any company that has a large proportion of their costs in the underlying bandwidth will naturally look at Level 3 as an attractive solution. So by allowing new submarine cables to be constructed and landed in Taiwan the Taiwanese government is making positive steps towards an open and liberalized market. We encourage the [continuation] of that process.
TT: One area identified as being of particular concern to submarine cable companies is the government's insistence that foreign firms must negotiate with one or more of the four fixed-line operators for the provision of a backhaul service preventing them from providing capacity directly to end-users. Your comments?
Liddell: The regulations on backhaul allow for a commercial negotiation with one of the existing fixed-network providers and we're in discussions with a number of the fixed-line providers and have successfully have found ways in which we can work with one or more of the fixed-line providers to provide the connection between Toucheng, where our cables land, and Taipei, where the bulk of our customers will be located. We expect to complete those negotiations well in advance of the landing of our submarine cable.
TT: Any clues on who you might sign up with?
Liddell: When it comes to looking for a local company to work with we're working on a purely commercial relationship with one or more of the existing fixed-line providers. We hope they will become our customers because we are delivering a huge amount of international capacity to Taiwan and these are the very companies that need that international connectivity to connect their customers to the rest of the world.
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