The massive financial scandal surrounding the Rebar Asia Pacific Group (
On the surface, the irregularities have highlighted the government's serious delinquency in its oversight and management role. But on a deeper level, it reflects the disorder caused by government policies aimed at boosting Taiwan's national telecommunications industry. The mess created by the opening up of the fixed network industry, which the government specially designated for deregulation in 1999, is yet another example of the ugly consequences of the entanglement between state and business interests, which has remained even after the Democratic Progressive Party (DPP) took power in 2000.
At the end of the Chinese Nationalist Party (KMT) era in 1999, in the name of market liberalization, the Ministry of Transportation and Communications (MOTC) formally announced that it would begin accepting applications for special licenses permitting companies to enter the fixed network market. This drew the interest of a number of large companies, which raced to group together to compete for the licenses.
Another main goal of liberalization was to speed up construction and modernization of the domestic broadband infrastructure, as well as the overall development of all telecommunications networks by allowing new companies into the market. The MOTC set a high threshold for applying, requiring groups to have NT$40 billion (US$1.22 billion) in capital. Several companies intending to apply competed to raise funds on capital markets. Banking on a rosy future and high profitability for the industry, they raised large amounts of capital by issuing shares. Taiwan Fixed Network (台灣固網), Eastern Broadband Telecom and New Century Infocomm Tech Co (新世紀資通), the three companies that won the licenses, raised NT$92.2 billion, NT$65.7 billion and NT$47.5 billion respectively.
However, the problems caused by this NT$200 billion in capital are just now about to emerge. Not long after they received their permits, word came out that the three private companies would not immediately invest the money in building infrastructure. Instead, they would inappropriately use it for other purposes. The media covered the story extensively and there were repeated reports that prosecutors would probe the matter. This all resulted from the government's serious inability to monitor and set standards for private fixed network companies. This amounted to a veiled incentive for companies to misuse their capital.
At the time that it began issuing the licenses, the MOTC declared the plan would help reach the goal of an "extensive Internet infrastructure, and broadband in 6 million households."
The three companies were contractually obligated to finish connecting 1 million subscribers and network loops within six years. However, after succeeding in raising such a large reserve of funds, for years they only built the most easily constructed Internet framework. For example, Taiwan Fixed Network had to rely on investment from the MOTC's Taiwan Railway Administration to provide for its nation-wide fiber optic network. Meanwhile the licensed companies were slow to construct a broadband network to connect consumer subscribers.
Most outrageous of all, when the DPP came to power after the licenses were issued, it proved unable to effectively encourage the companies to expand their broadband networks. The old slogan of "broadband in 6 million households" quickly vanished into thin air. At the end of 2003, the government's "Mobile Taiwan" plan to develop wireless regional networks included a plan to construct underground broadband pipes. Now taxpayers have had to foot the bill for the NT$37 billion budget, which was to carry on the task of laying 6,000km of underground broadband pipes across the country in the hope of achieving a complete fixed network for Internet, cable television and mobile phones.
It's been more than seven years since the fixed network market was opened up. As countries like South Korea and Japan have forged into the fiber optic network era, Taiwan has floundered, and its mission of creating a complete telecommunications network is back where it started. Now there are major doubts and suspicions about just where APBT's money went.
Look at the situation from the perspective of those outside companies that were denied licenses because they couldn't raise NT$40 billion to apply, or the previously state-run Chunghwa Telecom as it continues working to establish a broadband and fiber optic network, or the stock holders who invested enthusiastically in what looked like such promising companies.
All they can do is shake their heads.
Simon Chang is chairman of Chunghwa Telecom Workers' Union. Translated by Daniel Cheng and Marc Langer
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
RSS