A decision made by the National Communications Commission to bar Chunghwa Telecom’s investment in Global Mobile Corp was overruled by the commission’s appeals committee last week, but researchers said the impact of the ruling on the telecommunications industry was not immediately clear.
In March, the commission rejected Chunghwa Telecom’s application to invest in Global Mobile, one of eight companies that secured a license to offer Worldwide Interoperability for Microwave Access (WiMAX) wireless services.
The commission said that the investment by Chunghwa Telecom had not been mentioned when Global Mobile had applied for its license.
It would be unfair to other companies that bid for the licenses if the commission approved Chunghwa’s investment in Global Mobile after Chunghwa was turned down for a license, it had said.
The commissioners interpreted Global Mobile’s company status as a “quasi-telecom service operator,” which falls under Article 15 of the Telecommunications Law (電信法), which stipulates that investment or mergers involving two telecom service operators must be approved by the government.
The commission then rejected Chunghwa’s application.
Chunghwa Telecom took the case to the appeals committee in August, which reversed the original decision.
NCC spokesperson Lee Ta-sung (李大嵩) said Article 15 of the law did not specify that it applies to companies in the process of launching telecommunications services. Global Mobile has yet to launch its WiMAX services.
“The commission has to follow the law and it is inappropriate to expand the application of the law in this case,” he said.
Lee said the commission was aware its ruling might cause confusion in the telecom industry and that it would soon amend regulations.
Although Chunghwa will be allowed to invest in Global Mobile, the investment may not exceed 15 percent of Global Mobile’s capital.
Some observers, however, have cast doubts on the decision, as the rules for WiMAX licenses included giving precedence to new market players and limiting the influence of dominant players like Chunghwa Telecom.
Jason Lin (林一平), a professor at National Chiao Tung University, where he is chair of the Computer Science and Information Engineering Department, said the ruling had both advantages and disadvantages.
“If the ruling actually motivates Chunghwa Telecom to speed up the development of WiMAX services, then it will help the industry,” he said. “The bad news is that the move will likely put tremendous pressure on other telecom operators and could limit their growth.”
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