Telecom official says high prices are union's fault

The liberalization of the telecommunications sector has been postponed for the foreseeable future following a bitter conflict between Chunghwa Telecom Co (中華電信) and its union over the company's monopoly of last-mile access, a government official said yesterday.

"For years, Chunghwa Telecom has been reluctant to liberalize access to `last-mile' connections, even though we have continually pressed them to do so," said a public relations official at the Directorate General of Telecommunications, who spoke on condition of anonymity.

Chunghwa's control over last-mile access, which is the terminal portion of a telephone line that enables users to connect to the network, has allowed the state-run company to easily maintain a dominant position in the local market.

Despite pressure by the directorate, Chunghwa Telecom has not opened up last-mile access to private fixed-line operators yet. The Chunghwa Telecom Workers' Union's strong opposition to last-mile liberalization has delayed the opening of the sector indefinitely, the telecom regulator said.

To resolve the problem, the directorate has proposed establishing a second fixed line and renting it to private operators, the official said. The proposal has been passed by the legislature and is expected to be implemented next year, he added.

The union claimed the liberalization of last-mile access will reduce the company's market share. The official said that was beside the point.

"If the market is opened, prices for broadband or high-speed Internet services will drop due to competition, and the slash in prices will definitely boost overall revenue for the company," he said.

Taiwan has a low penetration rate for broadband service because of the higher costs of asymmetrical digital signal line (ADSL) services. The current set-up fee for ADSL services is around NT$700 and the monthly charge is NT$499 or above. In addition, a users' fee is charged depending on the time spent online.

According to a report issued by the Taiwan Network Information Center (台灣網路資訊中心) last month, over 80 percent of broadband users complained that the service rates are too high.

In comparison, the total charge for ADSL service in Japan is about NT$500 a month.

Chunghwa Telecom's three competitors -- Sparq (速博電信), Taiwan Fixed Network Corp (台灣固網) and Eastern Broadband Telecommunications Co (東森寬頻) -- have complained several times that the government has not provided equal access for them. They also requested a fair pricing policy for last-mile access.

The three private operators are renting lines from Chunghwa Telecom to provide broadband Internet and telecommunications services.

"Chunghwa Telecom said it is going to charge us a monthly rental fee of NT$200 per fixed line," said Karen Lee (李怡青), a public relations official at Taiwan Fixed Network.

"The price is so high that no private operator can survive," she said.