Lawmakers in the legislature’s Transportation Committee lashed out at National Communications Commission (NCC) Chairwoman Bonnie Peng (彭芸) yesterday, accusing the commission of being powerless to regulate Chinese investment in the telecommunications industry.
Peng and NCC officials were asked to brief the committee on Far EasTone Telecommunication’s (遠傳電信) announcement last week that China Mobile (中國移動), China’s largest telecoms carrier, would invest in the nation’s third largest telecoms operator by purchasing a 12 percent stake in the firm.
Should the deal go through, it is estimated it will cost China Mobile NT$17.7 billion (US$534 million), less than 1 percent of its annual revenues.
The companies signed an agreement in Hong Kong and made the announcement through a Web cast.
Far EasTone’s share price has risen to NT$37.25 as at the close of trading yesterday, from NT$35.2 on April 29.
The unexpected move incurred criticism from lawmakers on the Transportation Committee. Chinese Nationalist Party (KMT) Legislator Lo Shu-lei (羅淑蕾) said the announcement had been made to cause speculation on the markets. Lo claimed that Far Eastern Group had been able to boost its total market value to NT$94.3 billion following the announcement.
“[The announcement] is intended to cheat and lie to individual investors in the stock market so they will invest in the company,” Lo said. “But the NCC have done nothing about it.”
Lo said the maximum penalty of NT$600,000 for violating the Act Governing Relations between peoples of the Taiwan Area and the Mainland Area (兩岸人民關係條例) meant nothing to the company.
Peng said the Mainland Affairs Council (MAC) remained the nation’s highest authority when approving Chinese investment in the telecommunications industry. The NCC was only planning to allow Chinese investment in second-category telecoms carriers, not first-category carriers, she said.
The Telecommunications Act (電信法) states that first category businesses hold licenses allowing them to construct networks and offer services, whereas second category firms can only lease networks to offer services.
“Chinese firms are prohibited from investing in telecommunication services,” Peng said, adding that the MAC is canvasing suggestions from different administrative authorities to formulate a list of industries in which Chinese firms would be allowed to invest.
Peng said the NCC has asked Far EasTone to brief the commission about the investment on Monday. The firm’s representative assured the commissioners that so far it had yet to receive any investment from China Mobile.
Democratic Progressive Party Legislator Yeh Yi-ching (葉宜津) said Far EasTone had openly challenged the government because the NCC sets no standards and different government authorities were busy passing the buck, rather than handling the problem.
Peng said the commission was entitled to revoke Far EasTone’s license if it deemed the investment a serious violation of the Telecommunications Act. Yeh encouraged Peng to take action.
KMT Legislators Yang Li-huan (楊麗環) and Yang Jen-fu (楊仁福) also criticized government officials.
Yang Jen-fu asked officials from the Ministry of Economic Affairs and the MAC to work with the NCC to handle the matter.
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