VZCZCXRO4025
RR RUEHCN RUEHGH RUEHVC
DE RUEHIN #0580/01 1340805
ZNR UUUUU ZZH
R 140805Z MAY 09
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 1574
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 TAIPEI 000580 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/RSP/TC AND EEB 
STATE PASS TO AIT/W FOR RICK RUZICKA 
STATE PASS TO USTR FOR ERIC ALTBACH AND MCHALE 
COMMERCE FOR ITA/OPB BRENDA CARTER-NIXON 
 
E.O. 12958: N/A 
TAGS: ETRD ECON ECPS TW
SUBJECT: Taiwan Telecom: Broadband Deployment Initiatives 
 
Reftel: State 27310 
 
Summary 
------- 
 
¶1.  (SBU) As you would expect of one of the world's leading 
Information and Communications Technology (ICT) hardware 
manufacturers, Taiwan's broadband infrastructure is well-developed 
and growing.  Since the year 2000, the Taiwan authorities have 
appropriated almost USD five billion to fund a series of 
initiatives--E-Taiwan, M-Taiwan, U-Taiwan, and I-Taiwan--that have 
pushed broadband availability to almost 90 percent of households. 
These initiatives have each included funding to address the "digital 
divide" between Taiwan's different regions and ethnic groups, as 
well as measures to help small and medium-sized businesses become 
more connected. End summary. 
 
Background 
---------- 
 
¶2. (U) Taiwan is one of the leading ICT hardware manufacturers in 
the world, and a major procurement center for information technology 
(IT) companies.  Taiwan is the world's biggest producer of 15 IT 
products, including 99 percent of the world's motherboards, 86 
percent of notebook computers, and 76 percent of LCD monitors. The 
latest (2008) Business Software Alliance (BSA) and Economist 
Intelligence Unit (EIU) joint report on IT competitiveness ranked 
Taiwan number two, second only to the United States. [Note: Taiwan 
follows the OECD standard defining broadband as having a 
data-transmission rate capability of at least 256 kilobits per 
second. End note.] 
 
¶3. (U) Over the past ten years, the Taiwan authorities have pursued 
a series of ICT infrastructure development projects, beginning with 
the "E-Government" initiative in 2000 that aimed to create more 
efficient, networked public services.  The authorities expanded 
E-Government to include "E-Society," "E-Industry," and 
"E-Opportunity" initiatives under 2002's "E-Taiwan" plan. According 
to James Lo, Section Chief in the National Communications Commission 
(NCC) Department of Planning, from 2003-2007, the Taiwan authorities 
and private sector partners spent over USD 10 billion on the 
broadband development. By the end of 2007, there were six million 
broadband internet accounts in Taiwan. 
 
¶4. (U) In 2005, the authorities launched the ongoing National 
Information and Communications Initiative (NICI), or "M-Taiwan" 
program. M-Taiwan aims to expand broadband access across Taiwan, 
including providing a broadband Fiber-to-the-home (FTTH) "pipeline" 
for major urban areas, and ensuring island-wide service for users of 
mobile phones, wireless local area networks (WLAN), and Worldwide 
Interoperability for Microwave Access (WiMAX). By the end of 2008, 
the Ministry of Interior's Construction & Planning Agency (CPA) and 
local governments had together spent USD 1.1 billion on M-Taiwan, 
and completed 4,100 kilometers of the FTTH pipeline.  During the 
same period, private-sector ICT infrastructure spending related to 
M-Taiwan amounted to USD 11 million. 
 
Current Broadband Initiatives 
----------------------------- 
 
¶5. (SBU) On 29 April, econoff spoke with Jonathan Lai, Associate 
Researcher of the Executive Yuan (EY) Science & Technology Advisory 
Group, and Yang Chiahsu of the EY's National Information and 
Communications Initiative Committee (NICI) about two new 
broadband-related development programs:  "U-Taiwan" and "I-Taiwan." 
According to Lai, the goal of U-Taiwan and I-Taiwan is to establish 
an "Intelligent Taiwan" having one of the world's most advanced 
"Ubiquitous network societies."  Lai told us the Taiwan authorities 
will spend USD 3.7 billion on U and I-Taiwan projects over the 
programs' four years: USD 1.2 billion on education and other talent 
cultivation, and USD 2.5 billion on ICT equipment, applications, and 
IT-related cultural projects. 
 
¶6. (SBU) According to Yang, the CPA will spend USD 906 million per 
year of these funds to bring Taiwan's optical-fiber broadband 
network to a total of 6000 kilometers, as well as subsidize Taiwan 
companies' development of new wireless devices and applications. 
Other ministries will use the funding to implement related projects. 
For example, the Ministry of Education (MOE) will spend USD 20 
million per year to reduce Taiwan's digital divide by establishing 
broadband access for students in rural schools, many of whom do not 
have Internet access at home. 
 
Assistance to Disadvantaged Groups 
---------------------------------- 
 
 
TAIPEI 00000580  002 OF 002 
 
 
¶7. (U) In addition to the MOE's digital divide spending, the E, M, 
I, and U-Taiwan projects include funding for improving the ICT 
access for poor, rural, aboriginal, and other under-served groups. 
According to the NCC's Lo, under the ongoing M-Taiwan project, the 
Taiwan authorities are working to offer computer equipment and 
internet access for 30,000 households in rural and mountainous 
areas. The project's Prevalence Promotion Program extended broadband 
service to every village (zhen) by February 2008, and will bring 
broadband to every designated aboriginal area by the end of 2010. By 
that time, the authorities plan to bring broadband availability on 
the main island of Taiwan to 99.6 percent of households, and 96.5 
percent on outlying islands.  Currently, 89 percent of households on 
outlying islands are able to sign up for broadband service. 
 
¶8. (SBU) The authorities also used M-Taiwan funds to establish 
"digital opportunity centers" in 168 rural townships.  These centers 
assist and train people for computer and internet use. The M-Taiwan 
program also included funds to subsidize expansion into eCommerce by 
250,000 small and medium-sized enterprises and 400 farms.  According 
to Lo, only 70 percent of small and medium enterprises currently 
have broadband Internet service. 
 
Broadband Usage Statistics 
-------------------------- 
 
¶9. (U) According to the Taiwan Network Information Center (TNIC), 
the non-profit organization in charge of domain name registration 
and IP address allocation in Taiwan, 66.4 percent of Taiwan's 
households subscribe to broadband Internet. TNIC estimates this 
number will rise to almost 69 percent by mid-2009. Households in 
Taipei city and Kaohsiung City have the highest level of broadband 
connection at 79 percent and 75 percent, respectively, while 
households outside of these two cities have an average broadband 
usage rate of 64 percent.  Looked at by level of urbanization, 70 
percent of urban, suburban, and ex-urban households have broadband, 
while only 40 percent of households in "remote rural" areas have a 
broadband connection. As of September 2008, Fiber-to-the-Home (FTTH) 
accounted for 20% of Taiwan's broadband service. 
 
¶10. (U) Unsurprisingly, TNIC data show broadband Internet usage in 
Taiwan is strongly correlated to levels of education and income.  85 
percent of households headed by someone with at least a college 
education have broadband access, but this number slips to 71 percent 
for households headed by high school graduates, and 26 percent for 
those who have not attended high school. 90 percent of households 
with monthly incomes of USD 2418 or more have broadband Internet, as 
do 75 percent of households with monthly incomes of between USD 606 
and USD 2417. Only 19 percent of households making under USD 606 per 
month have broadband. 
 
Comment 
------- 
 
¶11. (SBU) By any measure, Taiwan has one of the most connected 
societies in the world: over 66 percent of people use the 
Internet--roughly comparable to the U.S. figure of 73 percent --and 
Daily Wireless, the wireless industry's largest news site, recently 
ranked Taipei as the second most connected city in the world, ahead 
of Tokyo, Hong Kong, and Singapore, and behind only Seoul.  Taiwan 
is intent on maintaining this edge as well, as the Taiwan 
authorities and private investors continue to pour money into the 
island's already world-class broadband infrastructure.  End 
comment. 
 
Young