On July 21, 2021, the National Communications Commission (NCC) announced the passing of the consultation document, “Delimitation of Specific Telecommunications Service Market,” and it will hold consultation hearings in the near future to solicit opinions from the public.

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According to Article 27 & 28 of the Telecommunications Management Act, to ensure effective competition in the telecommunications service market, the competent authority is entitled to adopt control measures for those with market significance (or significant market power, “SMP”) in the specific telecommunications service market if necessary. When defining the scope of the specific telecommunications service market as described in the preceding paragraph, the competent authority shall take the following factors into consideration: the technology and service development level; the importance thereof in the overall telecommunications service market; the region or range of competition and the demand or supply substitutability of that service; the structure and competition of the telecommunications service market, etc.

If the telecommunications enterprise of a specific telecommunications service market  can obviously affect the market price or service conditions; the number of subscribers or revenue of telecommunications service items operated thereby is above the percentage announced by the competent authority; or possesses or controls essential facilities, then the competent authority may recognize it as an enterprise with significance in the market.

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NCC also noted that the consultation document will propose delimitation of specific telecommunications service markets which have no effective competition and require ex ante regulation, including: fixed-network voice retail services market, fixed- network broadband retail services market, fixed- network wholesale services market, fixed-network voice connection services market, and mobile voice connection services market, altogether five markets.

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It is worth noting that, according to the aforementioned measures, the NCC has authorities to substantially identify and regulate the telecommunications services competitive market, yet the responsibility of defining  markets originally pertains to the Fair Trade Commission (FTC).

Under the circumstances where the Telecommunications Management Act does not expressly exclude the Fair Trade Commission from the responsibility of regulating the telecommunications service market, it is easy to have overlaps or vacuum of regulation. And if the findings of the two authorities conflict, industry players would not know which one to follow.

From the perspective of the most fitting institution, the Fair Trade Commission is the expert regarding common market delimitation. However, regarding the operations of the telecommunications services market, the NCC is relatively more knowledgeable. Hence, more discussions are warranted with respect to which institution should define the telecommunications service market or whether the NCC and the FTC should conduct some sort of inter-commission collaboration or cooperation. Under the current system, the NCC and the FTC each has its authorities on market definition, and after such authority being asserted, different legal effects will ensue separately in accordance with the Telecommunications Management Act or the Fair Trade Act is referenced, which is the law relied upon in defining the market,.

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The way to scope and define the market, in a certain degree,  has a of direct impact on the findings on the SMP. And if a company is identified as an SMP, according to Articles 29 to 35 of the Telecommunications Management Act, asymmetric regulation would be adopted, and such a company would need to deal with information disclosure, prohibition of discriminatory treatment, mandatory interconnection, price control, accounting separation and other obligations, which may have a huge impact on the company.

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Regarding the consultation hearing mentioned earlier, the legal compliance work of a service provider should be on: Could it be identified as an SMP under the Telecommunications Management Act and the Regulations Governing the Determination and Cancellation of Significant Market Power? What would be the basis for such identification? Is there any other possible ways of identification? In case of any questions, the service provider should put forward its opinions in a timely manner to protect its rights.

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(Author: Kun-An Liao, Esq.)

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