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Chapter Law Content

Chapter 2 Operating Franchise
Section 1 Tender and examinations
Article 8
The NCC can launch the examination committee to examine business proposal submitted by the examination applier. The examine items and standard should be approved and announced by the NCC.
The aforementioned guidelines of establishing examination committee should be approved by the NCC.
The examination process guidelines of the service (hereinafter referred to as the Examination Process Guidelines) should be drafted by NCC and be reported to the NCC for approval and promulgation.
Article 9
The operator applying the business should have the document listed as below, and bring up the application to the NCC:
1. Application documents.
2. Business proposal.
3. Sealed quotation of prices.
4. A copy of the cash remittance note of the tender bidding money.
5. A copy of the cash remittance note of the charge for examination.
6. Other document stipulated in the Examination Operation Guidelines
In the case where the application documents are incomplete or the contents thereof are incomplete, NCC shall notify the applicant and prescribe a time limit for correction; if the applicant fails to correct before the time limit or the correction remains incomplete, the application shall be dismissed, and NCC shall return the tender bidding money and the charge of examination without interests required.
The amount of money for bidding is NT 1,500,000. After applicant pay the money for bidding, it cannot be returned before the tender result proclaimed except there are stipulation in the regulation rules.
The bidding money and the examination fee should be remitted into the account that NCC assigned separately by telegraph. The applicants should fill in the corporation or the name of preparatory institute, address, and telephone numbers when they remitted the money by telegraph.
The application documents submitted by applicants referred to the rule of paragraph 1 shall not be returned after these documents delivered.
Article 10
The aforementioned business proposal should record issues down below:
1. Business operating items;
2. Business operating areas;
3. Communication models;
4. Brief introduction of operating telecommunication equipments (as below):
(1) Submit the system network establishment project, timetable, the default base station distribution areas and numbers in the date stipulated in paragraph 2 of Article 27.
(2) Operating proposal utilizing the radio frequency band and the anticipative efficiency analysis of the frequency spectrum usage.
(3) System structure and the operating theorem.
(4) Transmission network plan.
(5) Lists of Service Types that the system can afford.
(6) Working freq. Band, bandwidth, the Max. radio-frequency power, modulating method and the radio-frequency spectrum, harmonic waves and mixed carrier waves, and the performance of antenna…etc.
(7) If the radio-frequency power is adjustable, notify the adjustment range of the radio-frequency power and adjust principles.
(8) Air interface standard.
(9) Interfacing standard for the interconnections to other telecommunication networks.
(10) Description of the system standardization and future technical improving development.
(11) Quality of system service.
(12) Status of system usage in the worldwide
(13) Statement of the devotion to domestic telecommunication industry.
5. Financial structure:
(1) The existing corporation should provide the financial report of the latest 3 years, including the balance sheet, income statement sheet, the shareholder interest variety sheet, the cash flow chart, copies of per year's business tax settlement application and the attachment tables.
(2) The establishment institute should provide the founder list, the drafts of company constitutions, name list of the subscription book (Sorted by stock hold percentage) and the explanation of the capital account.
(3) Expectations of the capital source and capital manipulation proposals in the future 5 years.
(4) Expect and draw up with the future 5 years' entity balance sheet, statement of income and cash flow sheet.
(5) Sensitivity level Analysis for the financial project and the correlated response strategic proposal.
(6) Foreign shareholder or subscription percentage calculating sheets.
6. Technical ability and development proposal:
(1) Manager's professional knowledge about telecommunication and working experience.
(2) The configuration of professional technical man.
(3) Engineering designing and maintenance description (including system design, system installation, and maintaining operation proposals)
(4) Personnel training and development proposals.
(5) Research projects.
(6) Future 5 years service expansion proposals and the expectation goals (including the expectation of market size, market sharing percentage, the expectation of client population, service promoting method, and the report of market survey)
(7) The concrete corporation plans with domestic industries.
7. Fee schedule and the calculation method.
8. Personnel organization:
(1) The existing corporation should provide the corporation constitution, copies of business registration, copies of company license, directors, superiors, manager and the subscription book (sorted by stock hold percentage)
(2) The establishment institute should provide the founders list, the drafts of company constitutions, the preserved managers, and the subscription books (sorted by stock hold percentage)
9. Scheduled date for commencement of operation.
10. Correlated measures that guarantee consumers' rights and benefits.
11. Business proposal abstracts, which can provide NCC the information to quote and announce.
12. Other items which is stipulated to provide in the Examination Process Guidelines.
The format of the aforementioned application documents and the detail of items that by law should be included will be stipulated in the Examination Process Guidelines.
In the case where the contents shall be included in the application documents and business proposals are incomplete, NCC shall notify the applicant and prescribe a time limit for correction; if the applicant fails to correct before the time limit or the correction remains incomplete, the application shall be dismissed, and NCC shall return the tender bidding money and the charge of examination without interests required.
Article 11
The business operating areas are allocated in Grand Taipei Region (including Taipei City, New Taipei City, and Keelung City), Taichung City, and Kaoshiung City.
Operators who intend to expand the operating region outer the area stipulated in aforementioned paragraph should report to the NCC and attain the permission.
The regulation aforementioned also applies to the period before operators get the tender and still acquiring the NCC franchise approval.
Article 12
The applicant are limited as the corporation established under the corporations law, or the establishment institute of limited liability corporations, the chairman of the board should have the nationality of Republic of China, R.O.C., the amount of foreign stockholders should fit the limitation in paragraph 3 of Act 12 of the Act.
The applicant of the service operation should gather 30 billion NT dollars as the actual lowest capital amount; the applicant shall gather the sum at the period settled in Article 26.
While the applicants operate other Type I telecommunication services at the same time, if that service has the limitation of actual lowest capital amount, it should be calculated the actual lowest capital cost separately after attained the approval of establishment.
Article 12-1
When operators have more than the minimum paid-in capital and the shareholders are more than two hundred provisioned in the preceding article, the operators shall apply for a public securities offering process to the securities management authority in three months at the next day of registration of establishment or change of issuing new shares.
Operators reducing capital or conducting the provisions of Paragraph 1, Article 185 of Company Law, according to the shareholder resolution, shall submit the issue to the NCC for reference in 20 days after the day next to the resolution.
Article 13
One applicant cannot apply two or above application cases. If the number of the same shareholders or subscribers reaches to the 50% or above of the totality of the applicant's capital stock, the different applicants will be regarded as same applicant.
If one shareholder or subscriber of the applicant also has stocks of other applicants, the stockholder or subscriber only can hold 1 applicant's stocks unlimited and other applicants' stocks limited in 10% or below.
If applicants violate the stipulation in paragraph 2, in the case NCC shall notify the applicant and prescribe a time limit for correction; if the applicant fails to correct before the time limit or the correction remains incomplete, the application shall be dismissed, and NCC shall return the tender bidding money without the charge of examination and interests required.
Article 14
If the business service application cases have one of the problems down below, it cannot be corrected and the application shall be dismissed:
1. The applicant fails to apply before the time limit.
2. The applicant fails to provide application forms or business proposals.
3. The applicant fails to provide the quotation of prices, seals on the quotation of prices or the seal place didn't affix the applicant's seal stipulated by the regulations.
4. The applicant fails to pay the tender or the amount is not enough to the tender.
5. The actual capital amount recorded in the application or business proposals is less than the lowest actual capital amount promulgated in the Paragraph 2 of Article 12 of the regulations.
6. The applicant whose applications or business proposals request 2 or above frequency bands, or different frequency bands requested in the applications and the business proposals.
7. The system recorded in the business proposals is not adopting communication system of digital Low-Power Wireless Telephone such as DECT(Digital Enhanced Cordless Telecommunication), PACS(Personal Access Communication System),PHS(Personal Handy-phone System)or instituted by ITU(International Telecommunications Unit)
8. Applicants who violated Paragraph 1 of Article 12.
9. Applicants who violated Paragraph 1 of Article 13.
If application dismissed pursuant the aforementioned Paragraph 1 to Paragraph 6, the NCC shall return the tender bidding money and the charge of examination without interests required.
If application dismissed pursuant the aforementioned Paragraph 7 to Paragraph 9, the NCC shall return the tender bidding money without the charge of examination and interests thereof required.
Section 2 Tendering bids
Article 15
The business service application cases that certificated pursuant the regulations of aforementioned section, except the violators stipulated in Article 18, tender bids by the pricing amount recorded in the applicants' quotation of prices, and announce the bid winner pursuant the stipulated method of Article 19.
The aforesaid pricing amount means the numeral that the tenderer commits to pay the franchise fee according to the thousand-cent comparisons of the business volume every year.
The aforesaid pricing amount in Paragraph 1 cannot be lower than the minimum reserve price promulgated by NCC.
Article 16
The NCC promulgates the date of opening tenders, and NCC shall notify the applicant and tenderers to be present 3-day before.
Per-tenderer can appoint 3 or below representatives to the bidding chamber with carrying the identification documents; if no representative are present and casting the lots is needed, the NCC shall cast lots on behalf.
Article 17
Opening tenders operation are held by the NCC; when opening tenders, the anchorman of the opening tenders arena shall break off seals publicly and announce or reveal the quotation of prices.
Article 18
If the applicant's quotation of prices exist one the problems down below, the applicant shall not tender the bid:
1. Tender with falsified or forged documents.
2. The quotation of prices and thereof envelopes use not the form made and provided by NCC.
3. The applicant submitted 2 or above quotations of prices or quoted 2 or above prices.
4. The price numerals recorded on the quotation documents have been altered, kept in blank or written with non-integer or non-formal and complex way of expressing numbers in Chinese.
5. The quotation price is lower than the promulgated minimum reserve price.
6. Behaviors violating the regulations to affect the public tender fairness that identified by the NCC.
Article 19
The method to decide tender winners promulgated down below:
1. According to the quotation (higher than the promulgated minimum reserve price) permute from the highest price to the lowest; if the quotation numerals are the same, casting lots to set the permutation.
2. The tender winners are the highest 2 quoter in proper sequence, but if the first in proper sequence uses Frequency Band B1, other tenders who use Frequency Band B1 cannot be the tender winner, and fill the vacant post in proper sequence by other tender who doesn't use the B1 Frequency Band.
Article 20
The NCC shall return the tender bidding money that was paid by tender losers or one whom failed to tender without interest required. After the tender winners pay the performance bond, the NCC shall refund the tender bidding money without interest.
Article 21
Applicants have one of the conditions down below, NCC shall not return the tender bidding money and thereof interests.
1. Tender with falsified or forged documents.
2. Withdraw of the applications or quotations of prices before the open tendering result announced.
3. Winning the tender but failed to pay the performance bond pursuant to the correlative regulations.
4. Behaviors violating the regulations to affect the public tender fairness that identified by the NCC.
Section 3 Establishment
Article 22
Tender winner shall pay the performance bond in the 60 days limit after receiving the tender notice from NCC, and then the NCC shall issue the establishment permit. If not pay the performance bond pursuant to correlated rules, thereof tender will lose the validity.
Article 23
The amount of the business executing guarantee money is 150,000,000 NT dollars.
The aforementioned executing guarantee money shall pay in one of the methods down below:
1. Direct deposit into the account assigned by NCC.
2. Executive Guarantees from Domestic Banks.
3. The negotiable time fixed deposit certificate that set the Pawnee as the NCC.
Using the executive guarantees from domestic banks should promulgated the guarantee period beginning from the day paying the performance bond to the 3 months later calculated from valid ending date of the establishment permit.
If the tender winner applies to extend the valid date of establishment permit, the aforementioned executing guarantee period should be conducted to extend at the same time.
Article 24
The performance bond paid by the tender shall return with 2 steps pursuant to the regulations down below:
1. In the valid time of system construction permit, achieve 25% system base stations' construction of the goal settled in the 3 year construction plans of business proposals, and finished the telecommunication equipment access online operation, then qualified and approved by NCC and attain the franchise approval pursuant to the regulations. To this time the operator can apply to NCC returning 1/2 of executing guarantee money, or apply to notify the guarantee bank dismissed the guarantee responsibility that was equal to 1/2 of executing guarantee money.
2. In the valid time of system construction permit, achieve 100% system exchange equipment and base stations' construction in the 3 year construction plans of business proposals, then qualified and approved by NCC and attain the franchise approval pursuant to the regulations. To this time the operator can apply to NCC returning the resting amount of the performance bond, or apply to notify the guarantee bank dismissed the resting guarantee responsibility.
Article 25
The validity period of establishment permit for four years; Tender winner who can't in validity period inside complete the establishment and obtain the charter according to the method the license, should in period before expiring attach to have the reason toward Ministry of Transportation & Communications to apply the defer, defer most long cannot almost a year, and then once is limited. The overdue Ministry of Transportation & Communications abolish it's establishment permit, not the send back its implement the security deposit or NCC notify and guarantee the bank implement the assurance duty.
Article 26
When the tender obtain the establishment permit, the corporation establishment or license alteration shall be completed in six months. If the operator cannot finish the registration in the time limit stipulated in the regulation, the operator can apply to NCC for extension before the time limited and express the reason to NCC. The extension cannot go past 6 months for the extremity, and limited in 1 time. If the operator failed to achieve the time limit, the NCC shall abolish the establishment permit without returning the performance bond or notify the guarantee banks execute the guarantee duty by NCC.
Article 27
After obtaining the establishment permit and complete the corporation establishment or license alteration, the tender shall submit the documents stipulated by the regulations to apply the system construction permission and allocated frequency to NCC.
The validity of system construction permission is 3 years; while the tender obtain the permission, it should construct the 1900MHz Digital Low-Power Wireless Telephone network according to the 3year construction plan in the business proposals. If the operator cannot finish the construction in the validity, the operator shall apply to NCC the extension with the expression of reasons, the extension cannot go past 1 year for the extremity, and limited in 1 time. If the operator failed to achieve the time limit, the NCC shall abolish the establishment permit and system construction admission without returning the performance bond or notify the guarantee banks execute the guarantee duty by NCC. The operator who obtained the franchise approval would be abolish the approval by NCC.
Operators apply to extension because of force majeure can extend pursuant to the procrastinated time by the fore majeure, and not limited by the aforesaid extension time.
If the validity of the aforementioned 2 system construction permissions surpasses the validity of establishment permit, the extension application should be conducted at the same time.
The validity of the aforementioned 2 system construction permissions cannot surpass the validity of the establishment permit; thereof involved with changes of original business proposals should be conducted pursuant to the regulations in Article 49.
If not request and obtain the construction permission or approval, the operator cannot construct part or the whole 1900MHz Digital Low-Power Wireless Telephone network.
Article 27-1
The affairs of installation permits and radio station licenses of base stations installed by the tenders or operators shall comply with the Regulations for Administration of Base Stations of Mobile Communications Network Businesses.
Article 27-2
(deleted)
Article 28
Tender once obtain the system construction permission, it should construct the system by the permission; the circuit connected its system and the other system should negotiate a lease with the fixed communication network or satellite fixed communication network business operators. But if the connection circuit are in the same building and approved by NCC, shall not limited by the regulation.
The inner equipment connection circuits of the tenders' 1900MHz Digital Low-Power Wireless Telephone networks should construct of his own after obtain the approval from NCC.
If the aforementioned circuits are its own optical fibred or copper cables, the construction should pursuant to the regulation down below:
1. Using the ground to construct the networks should get the permission from the municipality or county government.
2. The network circuits that need to be attached on the tubes or correlated equipments of common carrier, it should be handled pursuant to the correlated regulations.
If the circuits constructed under Paragraph 2 of this Article are microwave connections, matters relating to the assignment of frequency and station erection permit shall be handled in accordance with the applicable provisions in the Regulations on the Establishment and Use of Microwave Stations of a Type I Telecommunication Enterprise. In the case of satellite connections, matters relating to the assignment of frequency and the station erection permit shall be handled in accordance with the Administrative Rules on Satellite Telecommunication Services.
Article 29
The tenders who achieve 25% base stations' construction of the goal settled in the 3 year construction plans of business proposals, and finished the telecommunication equipment access online operation, then qualified and approved by NCC, it should submit documents down below to obtain the franchise approval pursuant to the regulations:
1. Applications for franchise approval.
2. Copies of establishment permit.
3. Copies of company license.
4. Tariff Approval authorized by the supervisor organization.
5. Corporation service regulations approval authorized by the NCC.
Article 30
The Franchise Approval shall state the items as below:
1. Operator's name, representatives and the location of company.
2. The service types.
3. The totality of capital.
4. The actual capital amount.
5. Service operating area.
6. Assigned frequency band.
7. Valid date.
8. License date.
Article 31
The validity period of franchise approval is 15 years.
Operators whose the aforesaid period of franchise approval expired and willing to operate should apply to the permission in 3 months from the 6 months before expiration and get approved to update the franchise approvals; the exam items and approval regulations will be promulgated by NCC and reported to the NCC for approval and promulgation.
Article 32
Tenders should start the service operation in 6 months from the day obtaining the franchise approval, if the operator failed to achieve the time limit, the NCC shall abolish the franchise without returning the performance bond or notify the guarantee bank to execute the guarantee duty by NCC; if the establishment and system construction permissions are not expired, abolish the establishment and system construction permissions.
If the tender or operator violated the correlated law or regulations, and NCC rescind or abolish the establishment permit or franchise approvals, the NCC shall not return the performance bond or notify the guarantee bank to execute the guarantee duty by NCC.
Article 33
If the establishment permit, system construction permission, radio station license, or the franchise approval are lost or destroyed, it should apply the reissue to NCC with the expression of reasons; if the items stated on permissions or franchise have changed, it should apply the change and approval to NCC.
The establishment permit, system construction permission, radio station license, the franchise approval, or the assigned frequency band cannot be leased, lent, or transfer the ownership.