All questions

Telecommunications and internet access

i Internet and internet protocol regulation

Purely internet-based services are not regulated in Taiwan; hence, no licence would be required. However, some communications services using both IP networks and the public switched telephone network (PSTN) are still regulated under the Type II Regulations. For instance, under the Type II Regulations, VoIP services are defined as voice services received and transmitted through the internet. Nonetheless, the NCC holds the view that, in principle, providing voice communications services via the internet should not be deemed as a telecom service and should thus not be subject to the Type II Regulations. Only when a VoIP service is provided with an E.164 number (i.e., E.164 VoIP services) or allows calling parties on the internet to make calls to receiving parties in the PSTN by connecting to a fixed network switch and using a phone number leased from a telecom operator (i.e., PC to phone), said VoIP service would be deemed as a telecom service and be subject to the Type II Regulations. Under the TMA, except for voice services through interconnection with foreign telecom carriers, a registered telecom operator is only allowed to connect or switch calls from another registered telecom operator.

On 29 June 2022, the NCC announced a bill of the Digital Intermediary Service Act (DISA Bill) for public consultation. The DISA Bill was formerly named the Digital Communications and Broadcasting Act (DCBA). A bill of the DCBA had been submitted to the Legislative Yuan for deliberation in November 2017. After an overhaul by reference to the proposed draft Digital Service Act of the EU, the DISA Bill aims to regulate digital intermediary (DI) service providers and imposes different obligations on different types of DI service providers (especially hosting services and online platform services). On the other hand, considering the transnational nature of DI services, the DISA Bill is not only applicable to those service providers having a commercial presence in Taiwan but also applies to those service providers without a commercial presence in Taiwan, but there are sufficient facts to support that they have a 'substantial connection' with Taiwan. Said 'substantial connection' means 'having a significant number of recipients of the service within the territory of Taiwan' or 'targeting the Taiwan market as the main business market'.

According to the current proposal, among other obligations, when any competent authority obtains from the court an access restriction order or imposes an interim warning annotation measure, DI service providers must comply with this order or measure with respect to restrictions on information flows. Hosting service providers must establish a notice and action mechanism allowing anyone to notify them of the presence of illegal content on their services and, when they decide to remove or disable access to specific items of information provided by a recipient of their services, to notify the recipient of the decision and provide a clear and specific statement of reasons for that decision. As for online platform service providers, among other obligations, they must provide an electronic and free-of-charge complaint-handling mechanism allowing recipients of their services to contest their decisions with respect to restrictions on information flows and issue warnings to recipients of their services that frequently provide manifestly illegal content or submit manifestly untrue notices or complaints and suspend the provision of their services to such recipients.

Another relevant issue regarding internet regulation that raises industry concerns is whether OTT audio and video streaming services should be regulated as traditional broadcasting services. Currently, there is no law specifically regulating online audio and video streaming services. Nonetheless, the NCC announced a bill of the Internet Audiovisual Service Management Act (ASMA Bill) for public consultation in July 2020. The ASMA Bill aims to regulate OTT audio and video streaming services and encourages OTT operators to apply for registration with the NCC on a 'voluntary' basis. Nevertheless, the NCC may, after considering the number of users, turnover, clicks, traffic volume, market impact or other material public interests, require certain OTT operators (mainly large OTT operators) to register with the NCC. Registered OTT operators must make regular reports on their operations in Taiwan and comply with burdensome requirements with respect to information disclosure. However, according to the current proposal, user-generated content platforms (such as Facebook, YouTube and Instagram) will not be subject to the ASMA Bill because the aforesaid content is mainly edited and uploaded by users rather than platform providers. The legislative process of the ASMA Bill has been suspended for over two years because of criticism from the concerned parties.

ii Universal service

The NCC is active in promoting the universal service. Under the Regulations Governing Telecommunications Universal Service (Universal Service Regulations), the scope of universal service includes voice service and access to data communications. The former refers to the provision of uneconomic public payphone services and telephone services in uneconomic areas. The latter refers to the provision of access to data communications in uneconomic areas and to elementary and secondary schools and public libraries at a preferential rate. Since mobile broadband has become a fundamental part of the information society, besides traditional voice services and internet access services, providing ubiquitous wireless broadband access has become a key issue of universal service. In light of the foregoing, in 2019, the NCC revised the Universal Service Regulations to extend the scope of universal service to offering mobile broadband services in uneconomic areas.

Under the TA, only Type I telecom operators providing integrated network services, local network services, local leased circuits or long-distance leased circuits would likely be designated by the NCC to provide the universal service. Besides Type I telecom operators, Type II telecom operators providing simple voice resale services or VoIP services also must share expenses from the universal service and make contributions to the Universal Service Fund depending on their sales revenue in the previous fiscal year. Similarly, the TMA authorises the NCC to require registered telecom operators whose annual turnover exceeds a certain amount (according to the NCC's announcement dated 30 September 2020, NT$100 million) to make contributions to the Universal Service Fund to share expenses from the universal service. With the establishment of the MoDA, the competent authority of universal service has been changed from the NCC to the MoDA.

iii Restrictions on the provision of serviceTelecom sector

Due to their nature as common carriers, telecom operators are required to provide telecom services in a fair and non-discriminatory manner, unless otherwise stipulated by law. With regard to price controls, under the TA, only a Type I telecom operator's primary tariff (such as fees for internet access or mobile communications service and wholesale price of the items designated by the NCC) is subject to a price cap. The currently effective price cap provides that the aggregate price increases of a Type I telecom operator during any given year shall not exceed 'ΔCPI-X',2 where X is a coefficient set by the NCC. Moreover, the Administrative Rules on Tariffs of Type I Telecommunications Operators requires a market-dominant Type I telecom operator not to commit any act of unfair competition against other telecom operators. Under the TMA, the NCC may adopt special control measures to require a business operator that has significant market power in a certain telecom service market to take certain actions (even if such business operator does not register as a telecom operator under the TMA), which include:

  1. requiring such business operator to publicise necessary information, terms and conditions, procedures and prices concerning interconnection, access to networking components, or use of the relevant telecom infrastructure;
  2. requiring such business operator not to discriminate against other telecom operators (to be specific, the commercial terms provided to their subsidiaries, affiliates or business partners shall not be more preferential than those provided to other telecom operators);
  3. requiring such business operator to provide access to interconnection, networking components, or the relevant telecom infrastructure;
  4. requiring such business operator to reach an agreement with another telecom operator within three months after receiving said telecom operator's request to provide access to interconnection, networking components, or the relevant telecom infrastructure or to amend the relevant commercial terms;
  5. requiring such business operator to prepare and publicise its interconnection and access service agreement templates within a designated time limit;
  6. requiring such business operator not to engage in cross-subsidisation, price-squeezing or any other act of unfair competition by setting prices; and
  7. imposing price control measures on the services provided by such business operator.
Broadcasting sector

Similar to telecom operators, CATV operators are deemed by the NCC to be quasi-common carriers. Therefore, Article 49 of the CRTA provides that CATV operators shall not reject, without any legitimate reason, requests from the local populace to subscribe to a CATV service. Under the current regulatory regime, a price cap of NT$600 per month per household for CATV services was set by the NCC, which cap has not been adjusted since the 1990s even though the CPI has risen substantially during the past 20 years. In addition, CATV operators are required to report the subscription tariff to local government agencies within a month after 1 August every year. Local government agencies will examine and decide the actual subscription tariffs within the price cap set by the NCC (i.e., NT$600) and then make an announcement of its decision on subscription tariffs accordingly. To offer multiple options for subscribers, the NCC has proposed a bill of multiple subscription tariff schemes for CATV services, which requires CATV operators to adopt a tiered scheme and provide subscribers with different packages that contain different combinations of channels. Under the bill, the price cap of NT$600 remains unchanged; however, CATV operators may be exempt therefrom under some circumstances. On the other hand, to increase TV channel operators' bargaining power, the bill stipulates that CATV operators shall not, without any legitimate reason, reject the price set by a TV channel operator to charge subscribers on an à-la-carte basis when negotiating a licensing agreement with the TV channel operator.

iv Privacy and data security

The Personal Data Protection Act (PDPA) is the general law regulating the collection, processing and use of personal data in Taiwan. The PDPA requires data controllers to have in place appropriate measures to prevent personal data from being stolen, altered, damaged, destroyed, lost or disclosed. The Enforcement Rules of the PDPA further provide certain technical and organisational measures that data controllers may consider adopting based on the principle of proportionality (i.e., based on the quality and quantity of the personal data involved). Moreover, under the authorisation of the PDPA, the central competent authorities may designate one or more industry sectors under their supervision and require them to set up a security maintenance plan for personal data files.

To urge ministries and commissions to implement the supervision and management of non-government agencies, the Executive Yuan stipulated the Collaborative Practice Guidelines on the Implementation of Personal Data Protection by the Executive Yuan and its Subordinate Agencies (the Collaborative Practice Guidelines) on 11 August 2021. The Collaborative Practice Guidelines require ministries and commissions to amend their existing data protection regulations for specific industry sectors under their supervision, thereby requiring non-government agencies using IT systems to collect, process or use personal data to adopt additional data security measures, and review the necessity of stipulating new data protection regulations for specific industry sectors under their supervision on a regular basis by considering the scale of non-government agencies, the quantity or nature of personal data retained by non-government agencies, the potential impact on data subjects as a result of data breach and the frequency of cross-border transfer, etc.

Pursuant to the Communication Protection and Surveillance Act, telecom operators must enable the law enforcement authority to conduct monitoring and interception of communications on their systems. Under the TA, only Type I telecom operators and certain Type II telecom operators are obligated to assist the law enforcement authority in conducting lawful interception, namely E.164 and non-E.164 VoIP service providers (excluding voice communications over the internet without using VoIP gateway); voice simple resale service providers; and internet access service providers (IASPs) additionally providing email services. Article 7 of the TA further requires telecom operators to retain communications records and user data and provide the law enforcement authority with the same when the latter raises such request pursuant to the relevant applicable laws and regulations. Unlike the retention obligations in terms of communications records imposed on Type I telecom operators, which are limited to phone calls, those imposed on Type II telecom operators (to be specific, IASPs) may cover IP address-related information. Under the TMA, only registered telecom operators and enterprises establishing a public telecommunications network need to comply with the aforesaid interception requirements.

To protect network security, the TA requires telecom operators to regularly conduct self-inspection in accordance with the NCC's guidelines. Among other measures, telecom operators should set up an information security task force for establishing an information security management mechanism. Under the TMA, telecom operators establishing a public telecommunications network by using telecom resources or other telecom operators announced by the NCC must set up and implement a cybersecurity maintenance plan according to their cybersecurity safeguards levels. Moreover, the TMA also authorises the NCC to ban the purchase and use of certain telecom equipment for national security reasons. With the establishment of the MoDA, the competent authority overseeing telecom operators' cybersecurity matters has been changed from the NCC to the MoDA.

On the other hand, to strengthen national cybersecurity safeguards and mitigate information security risks, the Executive Yuan promulgated the Guidelines on Limitation on the Government Agencies' Use of Products Endangering National Cybersecurity (Product Limitation Guidelines) on 18 April 2019. The aforesaid products refer to any information and communications technology (ICT) system or service that may affect government operations or social stability and thereby directly or indirectly endanger national cybersecurity. The Product Limitation Guidelines restrict government agencies, public schools, state-owned businesses and administrative legal persons from using said ICT products and require the central competent authorities to urge critical infrastructure providers and government-sponsored foundations under their supervision to comply with the Product Limitation Guidelines.