Administrative Regulation Governing Tariffs of Type I Telecommunications Enterprises

Link to law: http://law.moj.gov.tw/ENG/LawClass/LawAll.aspx?PCode=K0060056

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Article 1


These Regulations are enacted in accordance with Paragraph 3, Article 26 of the Telecommunications Act.


Article 2


"Dominant Type I Telecommunications Enterprises" refers to any Type I Telecommunications Enterprise which is declared by the NCC as such and which meets any of the following criteria:
1. Control of critical and key telecommunications infrastructure.
2. Dominance over market prices.
3. A market share of over 25 percent of any given service, as measured by the number of subscribers or business volume.
Any dominant Type I Telecommunications Enterprises which does not meet any of the criteria set forth in the preceding paragraph may submit relevant information to the NCC and request removal of its designation as a dominant carrier.


Article 3


Primary tariffs of dominant Type I Telecommunications Enterprises shall be regulated by price cap and shall be subject to the following formula:
[(Pt - Pt-1) ÷Pt-1] x100% (ΔCPI - X)


Article 4


The parameters of the formula set forth in the preceding Article shall refer to the following:
1."Pt" refers to the rates or amounts of tariffs (hereinafter, the "Tariff Rates") following adjustment by Type I Telecommunications Enterprises during each year of implementation.
2."Pt-1" refers to the Tariff Rates implemented by Type I Telecommunications Enterprises the year immediately preceding each year of implementation.
3."ΔCPI" refers to the most current annual rate of increase of the consumer price index in Taiwan, as announced by the Directorate General of Budget, Accounting and Statistics prior to each year of implementation.
4."X" refers to the adjustment coefficient.
5. [(Pt - Pt-1) ÷Pt-1] x100% refers to the percentage adjustment to the tariffs.
The "year of implementation" set forth in the preceding paragraph shall refer to the period between April 1 of each year and March 31 of the following year.


Article 5


The Pt-1 value of Article 3 shall be determined in the following manner:
1.For initial tariffs, such first-time tariff rates shall be the Pt-1 value for the first year of implementation.
2.The Pt-1 value for the second year of implementation and thereafter shall be the tariffs effective as of March 31st in the year immediately preceding each year of implementation.


Article 6


The adjustment coefficient shall be determined and regularly announced by the NCC.


Article 7


Adjustment to the primary tariffs of dominant Type I Telecommunications Enterprises for each year of implementation under the formula set forth in Article 3 shall be subject to the following requirements:
1. Where the (ΔCPI-X) value is greater than "0," the percentage by which the tariffs of Type I Telecommunications Enterprises are raised during the implementing year shall not exceed the (ΔCPI-X) value.
2. Where the (ΔCPI-X) value is smaller than "0," the percentage by which the tariffs of Type I Telecommunications Enterprises for the first day of the year of implementation is reduced shall not be lower than the absolute value of (ΔCPI-X); and the tariff rates during any given year of implementation shall not be greater than the tariff rates adjusted by the reduction percentage based on (ΔCPI-X).
3. Where (ΔCPI-X) is equal to "0," tariffs of Type I Telecommunications Enterprises shall not be raised during the year of implementationay


Article 8


Where the primary tariffs of dominant Type I Telecommunications Enterprises may be raised in accordance with the provisions of the preceding article, the tariff rates following each adjustment during any given year of implementation shall not exceed the tariff rates calculated by the percentage of increase as determined under subparagraph 1 of the preceding article.
Where the percentage by which the primary tariffs of dominant Type I Telecommunications Enterprises are raised during any given year of implementation does not reach the ceiling percentage determined under subparagraph 1 of the preceding article, the remaining percentage may not be used to raise tariff rates for subsequent years of implementation.


Article 9


The adjustment scheme of primary tariffs of dominant Type I Telecommunications Enterprises shall be submitted to the NCC for approval at least 14 days prior to the scheduled effective date of such adjustment. Following approval, the adjustment scheme shall be announced through the media, websites, and at all business premises, shall be disclosed fully in an appropriate manner, and shall go into effect after 7 days of the announcement.
The promotional scheme of dominant Type I Telecommunications Enterprises, including primary tariffs, shall adhere to stipulations set forth in the preceding paragraph.
The "primary tariffs" set forth in the preceding paragraph shall include the following items:
1.Local network services:
(1) Monthly rents for local networks.
(2) Communications charges for local networks.
(3) Monthly rents for leased local network circuits.
(4) Communications charges for pay phones.
(5) Internet connection service.
2. Monthly rents for leased long-distance network circuits of long-distance network services.
3. Monthly rents for leased international network circuits of international network services.
4. Monthly rents and the prepaid communication charges (prepaid card) of Mobile Communication network services.
5. The wholesale price enacted in accordance with Article 11.
6. Any tariff items announced by the NCC.
If the tariffs reported by a dominant Type I Telecommunications Carrier in accordance with the provisions of Paragraph 2 violate the provisions of the preceding two articles, the NCC may demand rectification.


Article 10


When the provision, adjustment, or promotional scheme of dominant Type I Telecommunications Carrier tariffs have been awarded approval but have not been implemented, or if they have been withdrawn, the dominant Type I Telecommunications Carrier shall submit its reasons for undertaking such measures to the NCC for approval.
If previously announced, it shall be through the media, websites, and at all business premises. If it has not previously been announced, it may not be announced.


Article 11


Dominant Type I Telecommunications Enterprises shall set a wholesale price for the telecommunications services they provide for other telecommunications enterprises.
Sets or adjustments of the wholesale price, set forth in the previous paragraph, shall include the establishment, change, cancellation, and connection fees.
The service items and eligible telecommunications enterprises of the telecommunications services, aforementioned in Paragraph 1, shall be reviewed annually by the NCC and are specified in the table below.
The wholesale price, aforementioned in Paragraph 1, shall be initially set by deducting the avoidable costs and fees from the retail price and shall not exceed special promotional rates offered for that service.
Adjustments to the wholesale price, aforementioned in Paragraph 1, shall be determined using the following methods and shall be calculated separately; if this results in inconsistent tariff rates, dominant Type I Telecommunications Enterprises shall offer the lower rate:
1. The avoidable costs and fees shall be deducted from the retail price, and shall not exceed special promotional rates offered for that service.
2. The wholesale price shall be calculated in accordance with Article 3 of these regulations.
Dominant Type I Telecommunications Enterprises shall not conduct practices of unfair competition against other telecommunications enterprises.
The filing deadline and effective date of wholesale prices for dominant Type I Telecommunications Enterprises shall be announced by the NCC.


Article 12


Asides from the dominant Type I Telecommunications Enterprises, the adjustment and promotional scheme of tariffs of Type I Telecommunications Enterprises shall be announced through the media, websites, and at all business premises, shall be disclosed fully in an appropriate manner, and shall be reported to the NCC prior to the effective date of such implementation or cancellation.
If the tariffs and promotional scheme reported or implemented by Type I Telecommunications Enterprises are deemed to be against consumer interest or cause unfair competition, the NCC may order the enterprises to undertake corrective measures within a prescribed period of time.


Article 13


The following information shall be included in by dominant Type I Telecommunications Enterprises for approval of primary tariffs in accordance with Article 9:
1. Detailed descriptions of adjusted tariffs, operating income and expenditures, break-even analysis, and old-new tariffs' checklist.
2. Effective date or scheduled date of implementation.
3. Applicable period, if any.
4. Applicable area, if any.


Article 14


For initial first-time primary tariffs of dominant Type I Telecommunications Enterprises, the approval, or announcement thereof shall be governed by the provisions of Articles 9 to 13.


Article 15


Components of any package tariffs, related to primary tariffs, tie-in sales tariffs, or volume discount tariffs implemented by dominant Type I Telecommunications Enterprises shall be governed by relevant provisions of Articles 7 to 13.
The "package tariffs" referred to in the preceding paragraph refers to combinations of different tariff components for the same telecommunications service as arranged by Type I Telecommunications Enterprises, where subscribers may select from different combinations of tariffs. "Tie-in sales tariffs" shall refer to combinations of tariffs for different telecommunications services as arranged by Type I Telecommunications Enterprises, where subscribers may select from different combinations of tariffs. "Volume discount tariffs" shall refer to the different discounted rates offered by Type I Telecommunications Enterprises to subscribers for the same telecommunications service based on the different levels of traffic volume used by the subscribers.
The wholesale price and relevant cost analysis information shall be included in any submission by dominant Type I Telecommunications Enterprises telecommunications services under Paragraph 3 of Article 11 for approval in accordance with Articles 9, 14 and 15.


Article 16


During any year of implementation, should primary tariff adjustment by Dominant Type I Telecommunications Enterprises involve price discrimination by area, the percentage of such tariff adjustment shall be determined through calculations considering the adjustment percentage of each tariff bracket and the traffic volume thereof and shall be weighted by the Laspeyres Price Index (see Attachment).
Such adjustment may not exceed the percentage of tariff adjustment for a given year of implementation as set forth in Article 3.
The calculations considering the adjustment percentage of each tariff bracket referred to in the preceding paragraph may be weighted by traffic volume or by subscribers.
The different "tariff brackets", aforementioned in Paragraph 1, shall refer to tariffs set for different times, communications locations, or speeds with respect to the same service.


Article 17


Before granting approval of tariffs, the NCC shall require dominant Type I Telecommunications Enterprises to conform to regulations set forth in Article 52 and Article 55 of Telecommunications Act, as well as Article 13 of these Regulations.


Article 18


Any subscriber or other telecommunications operator that determines that the fixing or adjustment of tariffs by any Type I Telecommunications Enterprises violates the provisions of these Regulations may file a complaint with the NCC.
A complaint set forth in the preceding paragraph shall be filed in writing and specify the following:
1. Name and address of complainant.
2. Name of the operator against whom the complaint is filed and the services involved.
3. Reasons for filing.
The NCC shall handle such complaint within two months and notify the complainant of the results thereof.


Article 19


If any of the following irregularities is found in connection with any tariff submitted or implemented by dominant Type I Telecommunications Enterprises, such primary tariffs shall be changed by order of the NCC:
1. The fixing or adjustment of tariffs violates the Guidelines for Type I Telecommunications Enterprises Accounting System and Accounting Procedures, Regulations Governing Network Interconnection among Telecommunications Enterprises, and other related regulations.
2. The formula set forth in Article 3 is violated.
3. Any provision of Paragraphs 1 and 2 of Article 9, Paragraphs 4 and 5 of Article 11, Article 12 or Article 14 is violated.
4. A complaint has been filed in accordance with the provisions of Article 18 and is verified.
Where any tariff is changed by dominant Type I Telecommunications Enterprises pursuant to the preceding paragraph, if the tariff prior to the change is higher than the tariff so changed, the excess shall be returned to the subscribers within three months.


Article 20


Each dominant Type I Telecommunications Enterprise shall submit detailed information regarding the fixing or adjustment of tariffs for a given year of implementation to the NCC within three months following the end of each year of implementation.


Article 21


These Regulations shall become effective from the day of promulgation.