Starlink was reluctant to offer services in Taiwan because of the nation’s extremely high penetration rates in 4G and 5G services, the Ministry of Digital Affairs said yesterday.
The ministry made the comments at a meeting of the legislature’s Transportation Committee, which reviewed amendments to Article 36 of the Telecommunications Management Act (電信管理法).
Article 36 bans foreigners from holding more than 49 percent of shares in public telecommunications networks, while shares foreigners directly and indirectly hold are also capped at 60 percent of the total, unless specified otherwise by law.
Photo: Reuters
The amendments, sponsored by Chinese Nationalist Party (KMT) Legislator Ko Ju-chun (葛如鈞), would exempt public telecommunications network operators from shareholding regulations if they obtain special government approval, granted after it is determined that their services would not adversely affect the security of the public telecommunications network, the use of telecommunications resources, the overall development of the telecommunications services market, national security or other public interests.
The proposed amendment was widely perceived to be an incentive for SpaceX to provide Starlink in Taiwan, as the company has expressed an interest in having a wholly-owned subsidiary in the nation.
Two other low Earth orbit satellite operators — Eutelsat OneWeb and Amazon LEO — have agreed to follow Taiwan’s shareholding regulations by having proxies in the nation.
Minister of Digital Affairs Lin Yi-jin (林宜敬) said that SpaceX cited high penetration rates of 4G and 5G services as the main reason for not prioritizing Taiwan in its business plans.
“They said there is not much room left for them to grow business here,” Lin said, adding that it could just be one of its negotiation tactics.
Democratic Progressive Party Legislators Lin Chun-hsien (林俊憲) and Chen Su-yueh (陳素月), and Chinese Nationalist Party (KMT) Legislator Hung Meng-kai (洪孟楷) asked whether the shareholding regulations need to be relaxed and how unintended side effects, such as further increase in online fraud, could be prevented.
Japan, South Korea, the Philippines and Vietnam relaxed regulations for Starlink in different ways, National Communications Commission Acting Commissioner Chen Chung-shu (陳崇樹) said.
Starlink has satellite gateways in Japan and the Philippines, while South Korea and Vietnam exempt satellite operators from following regulations governing foreign investments, as the two countries have trade agreements with the US, he said.
Article 39 of the act already provides the government with the flexibility to handle cases such as Starlink, he said.
“Japan is able to address potential issues stemming from satellite communications — such as communications surveillance, cybersecurity and fraud — because Starlink’s satellite gateways are located domestically, while South Korea involves local stakeholders in these efforts,” he said.
Taiwan would have a hard time maintaining its “digital sovereignty” in dealing with fraud and cybersecurity issues without domestically installed satellite gateways and participation of local stakeholders, he said.
The participation of local stakeholders is particularly urgent as the second-generation Starlink, for which SpaceX has secured 52 patents, can transmit video and audio files between satellites, rather than just texts, and this could seriously affect Taiwan’s telecommunications industry, Chen Chung-shu said.
The government should ensure that agreements signed between domestic and foreign satellite service providers must incorporate provisions for local ground station control rights and guaranteed emergency bandwidth, DPP Legislator Lee Kun-tse (李昆澤) said.
In the meantime, efforts should be accelerated to establish satellite cybersecurity standards in line with international practices, he said.
Chen Su-yueh warned that Starlink owner Elon Musk has taken strongly pro-China positions.
Allowing pro-China companies to control Taiwan’s critical infrastructure could potentially put the nation at risk, she said.
“Taiwan has many talent, and we should develop our own low Earth orbit satellites to ensure our own safety,” she added.
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