VZCZCXRO5909
RR RUEHCN RUEHGH RUEHVC
DE RUEHIN #0099/01 0181010
ZNR UUUUU ZZH
R 181010Z JAN 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 7955
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 TAIPEI 000099 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/RSP/TC AND EEB 
STATE PASS TO AIT/W FOR RICK RUZICKA 
STATE PASS TO USTR FOR DAVID KATZ AND CHRIS WILSON 
COMMERCE FOR ITA/OPB BRENDA CARTER-NIXON 
 
E.O. 12958: N/A 
TAGS: ETRD ECON ECPS TW
SUBJECT: Taiwan Telecom: NCC Crisis Averted? 
 
Reftel: 2007 Taipei 2370 
 
Summary 
------- 
 
¶1. (SBU) On December 20, 2007--the day before the end of the 
Legislative Yuan (LY) session--the LY reached a compromise between 
KMT and DPP legislators and passed an amendment to the National 
Communications Commission (NCC) Organization Law.  The amendment 
provides a legal basis for the authorities to appoint new 
Commissioners if the current seven Commissioners resign from office 
at the end of January.  Encouraged by the amendments and the new, 
larger KMT majority in the LY, the seven current NCC Commissioners 
are now considering staying on until their terms expire in December 
¶2008. End summary. 
 
Background 
---------- 
 
¶2. (SBU) The National Communications Commission (NCC) is an 
independent body established in February 2006 to regulate the 
telecommunications and broadcasting industries.  It is modeled after 
the U.S. Federal Communications Commission. Shortly after it was 
established, however, the future of the Commission was put in doubt 
as political bickering ensued over how much control the Executive 
Yuan (EY) would have to appoint Commissioners.  As originally 
structured, Taiwan's main political parties nominated candidates for 
the 13 NCC Commissioner spots in approximate proportion to each 
party's respective seats in the LY, and candidates were then 
confirmed by a panel whose members were also chosen by the LY 
(reftel). As the bickering continued, four Commissioners either quit 
or refused to take office, and in April 2007 the EY suspended two 
Commissioners for alleged improprieties.  There are currently only 
seven serving Commissioners, the minimum needed to make 
legally-binding decisions. 
 
¶3.  (SBU) Further complicating matters, in July 2006, Taiwan's 
highest court ruled that the current Commissioner-selection process 
was unconstitutional, since the EY has the exclusive authority under 
Taiwan's constitution to appoint personnel in all administrative 
agencies.  To give the authorities time to amend the NCC 
Organization Law, however, the court rules the current NCC 
Commissioners could stay on with full powers until the end of their 
three-year term on December 31, 2008.  The seven serving 
Commissioners--concerned about their ambiguous constitutional 
mandate--collectively decided that they would resign at the end of 
January 2008. 
 
Public and Industry Pressure Spurs Compromise 
--------------------------------------------- 
 
¶4.  (SBU) Over the next year and a half, there was little progress 
on the matter.  Industry grew concerned that a lame-duck NCC could 
halt television and radio license approvals and hamstring plans to 
begin or expand satellite and wireless broadcasting in Taiwan. 
Responding to these concerns, in December 2007, the speaker of the 
KMT-controlled LY, Wang Jin-pyng, arranged negotiations between the 
DPP and KMT, and on December 20, both sides reached a compromise for 
amending the NCC Organization Law.  Under the compromise, the 
Premier would put forward nominations that the LY would then review 
and approve. 
 
Size Reduced to Seven, Term Raised to Four Years 
--------------------------------------------- --- 
 
¶5. (SBU) Under the amended Law, which will take effect on February 
1, the number of Commissioners will be reduced from 13 to seven, and 
Commissioners' terms in office will be extended from three years to 
four, though the first group of Commissioners to be chosen under the 
amended Law will have two-year terms. In addition, the Law 
stipulates that Commissioners from the same political party cannot 
hold more than three seats, and also allows serving Commissioners to 
stay in office until successor Commissioners can be nominated and 
approved under the aforementioned procedures. 
 
Commissioners May Decide to Finish Terms 
---------------------------------------- 
 
¶6.  (SBU) The NCC could face a gap in operations if current 
Commissioners resign as planned at the end of January 2008, since 
the EY and LY will need at least several weeks to appoint new 
Commissioners after the LY returns to work on February 1--although 
if the new, KMT-dominated LY will not consider nominations by the 
expiring Chen administration, this gap could last for the entire 
three-month period until the new presidential administration takes 
office.  To avoid disruptions, LY Speaker Wang asked current 
 
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Commissioners to stay on until new Commissioners are appointed.  NCC 
Commissioner and Vice Chairman Howard Shyr recently told econoff 
that the seven current Commissioners are now considering this 
request. 
 
Comment 
------- 
 
¶7. (SBU) Although the debate over the selection of NCC Commissioners 
has been highly partisan, the current Commissioners have worked 
together in a relatively collegial manner.  Industry, though, has 
been highly critical of the NCC, charging at various times that the 
Commission unfairly targets foreign firms and limits consumer choice 
by capping cable TV rates.  Despite this, we see it as a success 
that both political parties found a way to move forward on this 
issue, which if unsolved would have halted or delayed spectrum 
allocation decisions and license approvals for importing or 
upgrading broadcasting equipment (reftel).  We will continue to stay 
in close contact with current NCC Commissioners as they decide 
whether to resign this month as planned or stay on until 
end-December.  End comment.