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TAIWAN: An Introduction to Technology, Media, Telecoms (TMT)

In Taiwan, several initiatives have been set in motion in 2023 concerning the TMT and digital sectors, and it is  anticipated that these initiatives will continue to evolve and develop in 2024 and shape the regulatory landscape.

Changes in the Telecommunications Landscape 

In 2024, Taiwan's telecommunications market is poised for a significant overhaul. The second and third-largest mobile communications operators are merging with those ranked fourth and below. With the merger of Taiwan Mobile (surviving entity) and Taiwan Star (dissolving entity), as well as Far EasTone Telecom (surviving entity) and Asia Pacific Telecom (dissolving entity), three major players will dominate Taiwan's future telecommunications market. This positions Taiwan Mobile and Far EasTone Telecom to compete with the incumbent dominant Chunghwa Telecom.

Meanwhile, Taiwan's telecommunications regulations underwent substantial changes in 2023. The Telecommunications Act (the "Old Act"), instrumental in opening the telecommunications market in 1996, was completely replaced by the Telecommunications Management Act (the "New Act") in June 2023. The New Act altered the licensing framework under the Old Act and focused on managing telecommunications businesses with significant market influence. The National Communications Commission (the "NCC"), the telecommunications regulatory authority, must now consider how to regulate the three major players under the new regulatory framework set forth in the New Act. Additionally, various communication methods using the Internet pose a threat to the survival of telecommunications businesses, challenging traditional business models. All of these changes will also test the wisdom of the regulatory authority.

The Good Fight against Scams 

Due to the wide spread of fraud related criminal activities (such as phone scams), and the increase on the number of victims and the monetary amount of damages therefore suffered, the Taiwan government has intensified measures to suppress the relevant criminal activities, hoping to decrease such organised crimes. The NCC has increased scrutiny on operators involved in reselling mobile phone numbers (MVNO operators). In 2023, not only did law enforcement authorities prosecute ex-Type II telecom operators implicated in the assistance of criminal organisations in obtaining mobile phone numbers for phone scams, but the NCC also strengthened the audit on MVNO operators regarding the security of personal data protection. In furtherance to such efforts, recently, the NCC planned to reclassify the MVNO business by requiring the MVNO operators to register themselves with the NCC as telecommunications operators for better scrutiny and monitoring.

Meanwhile, to the same aim, the Ministry of Digital Affairs ("MODA") has been strengthening its regulation on e-commerce/digital service providers by stipulating the most rigid personal data security measures among the sectoral personal data security regulations and actively conducting on-site inspection and audit on e-commerce/digital service providers with regard to their personal data security measures. Same with the NCC, the MODA intends to suppress e-commerce/digital service related scams cases as well as protecting the rights and interests of the consumers and subscribers. It is worth noting that MODA's regulatory efforts cover the on-line game industry as well.

Strengthening Network Resilience 

In the war between Ukraine and Russia, from physical artillery to online skirmishes, Russia severed Ukraine's physical network connections. Elon Musk once assisted Ukraine by providing Starlink services, which alerted the rest of the world to alternative network/Internet access. At the early days of the war, Ukraine even made official request to the Internet Corporation for Assigned Names and Numbers ("ICANN") requesting ICANN implementing sanctions on Russia's Country Code Top Level Domain, attempting bringing domain names into the war. All these events showcase various facets of “cyberwar” globally and underscore the importance for countries to prioritise cybersecurity and network resilience.

Regarding network resilience, Taiwan, being a small island alongside the Pacific Ocean, continues facing threats and fears of network discontinuation (especially attempts from China) from time to time. To prepare for the future, the Taiwan government is actively engaging with international low-earth orbit satellite service operators to establish an alternative network and access to the Internet. For example, the local news has reported that Chunghwa Telecom will work with OneWeb, a British originated satellite service operator, to offer satellite communications services in Taiwan. It has been anticipated that more measures will be established or developed in Taiwan to tackle network resilience.

Regulation of Internet Content 

After the internal reorganisation of the Taiwan government in 2022, the NCC became the primary regulator of Internet content. In July 2023, the NCC established a special task force regulating Internet content, namely the Department of Internet Broadcasting and Governance, aiming to implement a better governance structure and framework on Internet content regulation. Back in 2022, the NCC once presented a draft statute regulating Internet content, adopting the same regulatory framework as the Digital Service Act of the European Union. The NCC abolished the plan in the latter half of 2022 due to strong objections and challenges from the civil society, as well as pressure from the ruling party concerning the then upcoming elections. It has been anticipated that the NCC would take more actions regulating Internet content after the 2024 Presidential Election.

On-line Streaming vs. Traditional Broadcasting 

Streaming platforms are flourishing, and audiovisual content is being widely distributed via the Internet. The general public is no longer confined to watching TV programs in front of television sets, opting instead to view content on mobile devices anytime anywhere. In 2023, Taiwan's television channels underwent a significant transformation. Channels under the Disney umbrella, such as Star Movies, which were previously popular among Taiwanese viewers, suddenly withdrew from cable television channels and transitioned to streaming platforms, causing a seismic shift in the Taiwanese television industry. In response to the withdrawal of foreign TV channel operators from the Taiwan market, the NCC redirected its focus to urge local cable television system operators to bolster their investments. The life-and-death struggle between the traditional television media and online media may occur sooner than expected.

AI Shock 

ChatGPT emerged as a revolutionary AI, sparking a global AI frenzy, and Taiwan was no exception. After careful consideration, the Taiwan government announced in December 2023 that it would convene a cross-agency meeting on the Digital Policy and Legal Platform to comprehensively review AI guidelines across various ministries. The Taiwan government's goal is to introduce a draft AI Basic Law before the inauguration of the next president on May 20, 2024, aiming for a "guidelines first, legislation later" strategy. The Executive Yuan has established the Digital Policy and Legal Platform, comprising separate teams for AI and personal data, with proposals emphasizing "data altruism" and "enhanced privacy technology application." Various guidelines are expected to be released in the first quarter of 2024. With regard to AI-related intellectual property right issues, the idea of the potential inclusion of the concept of "neighboring rights" was raised with regard to the copyright protection on AI-generated work, while the Taiwan Intellectual Property Office has announced its position on AI related intellectual property issues, which is similar to the position of its US counterpart. Same with the rest of the world, AI has been the hottest topic in Taiwan and more active regulatory developments have been expected.