1. Advisor ： Kuang Chiu Huang Group ： Ting Wei Lin,Ting Huei Lee, Kuei Chin Fan Transit & peering Taiwan Internet Interconnection problem

2. Background Transit and peering Respect of ISPs Analysis Conclusion Outline

3. Background  Development of Taiwan’s telecom industry  Telecommunications industry has a typical characteristic of public utilities industries they have exclusive

4. Background The first time to open to competition in telecom industry The introduction of infrastructure competition Open competition completely 1987~19961996~20002000~

5. Background  The first time to open to competition in telecom industry 1987 Began the liberalization of terminal equipment 1989 liberalization of the circuit using common data circuit rental released open value-added network services 1994 Open Digital Low Power Wireless telephone (CT-2) business

6. Background  The introduction of infrastructure competition 1996 Pass the three laws of telecom 1997 open business of mobile phone, Radio Paging, mobile data and wireless telephone mobile phone penetration rate of 108% in 2002,it was the highest rate in the world!!

7. Background  Open competition completely 2000 open international submarine cable International Simple Release (ISR) Business 2003 mobile virtual network operator business 2006 the National Communications Commission was established 2007 Open wireless broadband access services

8. Background  Memorabilia NCC asked fixed- line operators to discuss coordination Chunghwa Telecom reduce the price NCC held the hearing about relevant draft amendments to the network April,2009 August,2009April, 2013

9. Background  Current state Chunghwa Telecom first provide bandwidth services 80% UP domestic broadband users

10. Background  Current state  what is reasonable on network interconnection prices? Chunghwa Telecom Other ISPs Charge the high rate fees

11. Transit and peering  Peering Internet is composed of many ISP's network. Depending on the connection type and pay conditions can be divided. Public peering Private peering

12. Transit and peering  Transit Passing packets to itself and other downstream domains, in addition, is also responsible for the traffic to other domains

13. Transit and peering  Conclusion The Internet and fixed-line market is still only oligopolistic. the authorities should be actively controlled. While others were also thrown free interconnects voice, but this in turn involves fairness and justice.

14. Transit and peering  Conclusion The Internet and fixed-line market is still only oligopolistic. the authorities should be actively controlled. While others were also thrown free interconnects voice, but this in turn involves fairness and justice.

15. Respect of CHT  Market mechanisms States supervisory authority for network interconnection policy, are "low control; highly consultative; scale quite free interconnection" principle.  First mover advantage With unequal business model to control prices, just let small ISPs use resources of CHT in vain.  State-owned enterprises Resources put into the construction is tax, if free interconnection, is tantamount to allow the private industry use national resources.

16. Respect of other ISPs  If other carriers doesn’t interconnect with CHT, the line must go through oversea, this would appear delay; therefore no other viable alternatives.  CHT sets high prices of Internet interconnection.

17. Analysis  Monopoly Other operators can not negotiate peer Other ISP industry can not be commercial negotiations on an equal footing to get a reasonable access fee. Price squeeze Vertically integrated industry has a monopoly position, to increase the price to the downstream industry competition.

18. The market can not generate a positive cycle When interconnecting, the net inflow are required to pay to the net outflow.So ISPs will seek great ICP to enhance the customer experience and reduce the.Moreover,ICP get more resources to optimize content But the current situation in Taiwan, small ISPs buy bandwidth of CHT to enhance the customer experience, ICPs do that for the same reason.

19.  Government control controversy CHT has gradually cut costs and improve interconnection issues above unfair, but CHT and other operators on interconnection charges are still unable to reach a consensus.  Industry self-regulation failure (TWIX inefficient) CHT past only use low bandwidth links to TWIX (only 1G in 2009), resulting in other ISPs need to buy its bandwidth. Now,CHT has increased bandwidth to TWIX about 187G (Oct 2013).

20. Conclusion Chunghwa Telecom ISPs In Taiwan Free peering Bigger ISPs in the world transit fee It will harm the industry and block the development.

21.  Government should forma the vertical price squeeze according to the Fair Trade Act  Establish relations linked between wholesale price and retail price in the future

22. 1.Enhance the competitiveness of existing business. 2.Subscriber loop circuit fees will thus reduce 3.Attract new entrants into the broadband market