ISPs up pressure on Chunghwa

In a last-ditch try to combat the power of telecom giant Chunghwa Telecom Co (中華電信), Giga Media Ltd (和信超媒體) and its Internet-service provider (ISP) peers are desperately urging the government to increase efforts to resolve the prolonged problems of the monopoly in the nation's broadband market.

The call is the latest step in a series of complaints from college students and Internet advocates about state-run Chunghwa Tele-com's surcharges for broadband services that require high-speed asymmetrical-digital-signal line (ADSL) technology.

"Local Internet service providers including Giga Media are also treated unfairly by Chunghwa Tele-com," Tarn Chen-wen (譚昌文), vice president of Giga Media, told the Taipei Times during an exclusive interview on Friday night.

Bowing to hefty pressure from the government and the public, Chunghwa Telecom announced a lower broadband service tariff last Tuesday.

With 2.6 million ADSL sign-ups, Chunghwa holds about 80 percent of the nation's 3.3-million-strong broadband market, according to government statistics.

Seizing the chance to refocus public attention on Chunghwa's monopoly over "last-mile" access, private ISP players decided to launch a counterattack, Tarn said.

"We're not aiming to push for a further price cut, but for a telecom market based on fair competition," Tarn said.

Chunghwa, which charges both ways for ADSL connections -- to on ISPs and Internet end-users -- , has acted against fair trade rules, he added.

Additionally, the new ADSL service package Chunghwa proposed offering its subscribers, which would upgrade bandwidth for a relatively small price increase, will put ISPs in the corner, Tarn said.

Giga Media and its local ISP rivals will be forced to follow suit by providing higher-speed ADSL services at lower rates at the expense of a spike in the connection payouts, as Chunghwa will not reduce its charges to the ISPs, he said.

The spending on access makes up 20 percent to 40 percent of ISPs' total cost, according to Tarn.

"Taiwan's local ISP players will shut down their businesses in less than a year if this situation continues," Tarn warned.

Last Friday, Giga Media, Seednet (數位聯合電信) and Sparq (速博) sought aid from the Directorate General of Telecommunications by submitting a petition asking the regulatory agency to use its muscle to influence Chunghwa.

"All we want is a price reduction for ISPs on ADSL access," Cherng Chia-jun (程嘉君), president of Seednet, said at the time.

ISP players will not rule out the possibility of seeking a legal solution to the anti-trust issues, said Tarn, although he said that would be a last resort.

The request from ISPs for reasonable rates for ADSL access is just a small corner of the formidable problem the government faces in liberalizing the telecom market as it committed to do when entering the WTO on Jan. 1, 2002.

"Opening `last-mile' access to the three private fixed-line operators is the biggest obstacle on the road to full liberalization," said a government official who asked not to be named.

However, Chunghwa's president, Lu Shyue-ching (呂學錦), told legislators last week that more than two years of talks with fixed-line operators could finally lead to an agreement in June.

"We're trying to bridge the gap on the rates and contract terms," said Chunghwa spokesman Chang Feng-hsiung (張豐雄) yesterday.