## Tariff Control and Price Cap Regulation 

In order to promote competition in the telecommunications market, and as part of the government’s overall policy toward deregulation, the Telecommunications Act was amended in 1999 to abolish the former rate of return system on tariff setting in favor of price cap regulation of Type I services. 

Under the Regulations Governing Tariffs of Type I Service Providers, a dominant Type I service provider must submit its proposed adjustment in primary tariffs and promotional packages to the National Communications Commission from for approval at least 14 days prior to the date of the proposed tariff changes and announce such change on media, website and business locations on the next day after the National Communications Commission grants the approval. The tariff change will come into effect seven days after the announcement. 

Primary tariffs include: 

• for fixed line local telephone services: monthly fees, usage fees, monthly rental fees of leased lines and pay telephone usage fees; 

• for fixed line domestic long distance telephone services: usage fees and monthly rental fees of leased lines; 

• for fixed line international long distance telephone services: usage fees and leased line monthly rental fees; 

• for wireless services, including 3G mobile services: monthly rental fees and usage fees; 

• for internet services provided by dominant Type I service providers: connection and usage fees; and 

• other fees or tariffs announced by the Directorate General of Telecommunications before March 1, 2006 or by the National Communications Commission from March 1, 2006. 

In addition, a dominant Type I service provider is required to set wholesale prices for the provision of its telecommunication services to other telecommunication enterprises. These telecommunication services and their suitable targets, all of which are subject to annual reviews by the National Communications Commission, include: 

• interface circuits (local and long distance) between internet access service providers and customers for Type I and Type II service providers 

• interface circuits (local and long distance) between internet access service providers for Type I and Type II service providers that are internet access service providers 

• interconnection circuits between Type I service providers and between Type I and Type II service providers of international simple resale, or ISR, and E.164 VoIP services 

• DSL-family (xDSL) circuits for fixed line service providers and internet service providers 

• other local and long distance data circuits for Type I and Type II service providers 

• broadband internet interconnection for Type I and Type II service providers that are internet access service providers. 

