Thu, Aug 06, 2009 - Page 12 News List

Chunghwa, TFN settle peering fee dispute

By Shelley Shan  /  STAFF REPORTER

Chunghwa Telecom Co (中華電信) and Taiwan Fixed Network Co (TFN, 台灣固網) yesterday resolved a fee dispute after Chunghwa agreed to lower charges for Internet protocol (IP) peering with other Internet service providers (ISPs).

Prices were cut by 46 percent on average, with the new peering fee taking effect on July 1, the National Communications Commission (NCC) said.

“Since Chunghwa has agreed to reduce the peering fee, we hope that the ISPs could simultaneously lower their Internet service charges for customers,” said Chen Jeng-chang (陳正倉), spokesperson for the commission said.

“If they fail to do so, we will not ask Chunghwa to lower the fees when we review peering charges next year,” Chen said.

Based on Chunghwa’s new rate plan, the peering fee discounts will be based on the bandwidth that the ISPs lease from the company. The more bandwidth the ISPs lease, the bigger discounts they get.

The basic fee has been reduced from NT$1,500 to NT$1,480 per megabit per second (Mbps). The peering charge will drop further from NT$1,480 to NT$1,391 per Mbps if the leased bandwidth is between 1G and 2G, and will fall to NT$1,317 if the leased bandwidth is between 2G and 3G.

Chunghwa used to charge NT$1,500 per Mbps for bandwidths of less than 500 megabyte and NT$3,000 per Mbps for higher bandwidths. The NCC, however, described the charges as unreasonable, saying fees for larger bandwidths should be discounted.

While the plan is set for corporate customers, the commission wants the plan extended to cover consumers.

The dispute over the peering fee started about four months ago when Chunghwa decided to restrict the bandwidth used for the 2G peering service with TFN because the latter had not paid its fees this year.

TFN, a unit of Taiwan Mobile Co (台灣大哥大), asked to renegotiate a new peering fee, saying it had been overcharged.

After learning of the dispute, the NCC dispatched officials to the two companies to monitor the traffic flow in between and Chunghwa resumed its prior service agreement with TFN immediately under the NCC’s orders.

The NCC tried to solve the dispute by hosting a three-way meeting with the two and launched an investigation into whether Chunghwa had abused its status as the market leader and whether TFN had infringed on its customers’ interests.

The two firms did not violate any regulations, the NCC said.

The changes in peering fees are expected to cost the nation’s largest telecom carrier NT$240 million (US$7.3 million) in revenue. Last year, Chunghwa posted revenues of NT$20 billion from Internet access and value-added services, which contributed about 10 percent of its total revenues of NT$866.78 billion

For Taiwan Mobile, the nation’s No. 2 telecom operator, the commission’s favorable ruling could help it save between 30 percent and 35 percent in overall data transfer cost, company spokeswoman Josephine Juan (阮淑祥) said, adding that it had paid off the IP peering payment owed to Chunghwa.

ADDITIONAL REPORTING BY LISA WANG

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