Shay Assignment 17

Ephraim Shay has been credited by some as a schoolteacher, physician, civil engineer, logger, merchant, railway owner and inventor. These indeed are a large variety of interesting vocations for one individual. While researching Mr. Shay, I cross-referenced from every source I could lay my hands or mouse on to build a complete profile, a majority of which is centered on his Shay style locomotive. In doing so I discovered a few interesting items regarding the development of the Shay locomotive and the life of Ephraim Shay.

Today, Harbor Springs, Michigan still remembers Ephraim Shay as one of their prominent historical citizens, a true tribute to a man dead close to 100 years now. He passed away April 20, 1916 in Harbor Springs. His grave in Lake View Cemetery, Harbor Springs, like the man, is itself unusual. It bears two tombstones. One is the US Government grave marker for a Civil War Veteran. The other, a large black rock over four feet tall, incorrectly reputed to be a meteorite from his own property.Samples of this rock have been tested by two professional geologists and have determined it to be of earth origin.

Ephraim Shay was born on July 17, 1839 in Sherman Township, Huron County, Ohio. His parents insured Ephraim received a better than average education. He attended a Select School, studying to become a schoolteacher after his grade school years in Shaytown, New Jersey. His first teaching work was in New Jersey and by January 1861 Ephraim Shay was teaching school in Bellevue, Ohio. The opportunity for such an advanced education in the mid 19th Century would prove extremely valuable to Shay in his coming years and may explain a lot of his successes.

1861 was a troubled time in the United States and at the age of 21, Ephraim Shay was destined to be a part of US history that would forever change our country. Ephraim was spending his free time looking for farmland in Huron County, Ohio, while the Southern States were looking to secede from the Union. In June he was traveling to look at land in Michigan and then onto Peoria, Illinois to locate the owner. It was in Peoria that Shay learned of the formation of a Union Regiment in Saint Louis. He traveled to Bloomington Illinois and joined a forming company and then onto Saint Louis, Missouri where he was enlisted for 3 years or more. Shay served as an Enlisted man, assigned first to Company D, 8th Regiment of Missouri Volunteer Infantry. Likely due to his education, Shay's assignment was with the Adjutant's office and as a clerk with the Quartermasters.

Shay's tour in the Army took him to Kentucky, Tennessee, Mississippi and Arkansas. In Mississippi, Shay was assigned as a medical steward with the Hospital Corps in Chickasaw Springs. He became the charge hospital steward of the dispensary in Prentiss Hospital, Vicksburg Mississippi. This service as a medical steward would give Shay valuable experience in medical care but he never trained or practiced as a physician as some have incorrectly assumed. Ephraim Shay received an Honorable discharge in 1864 and he returned to Norwalk Ohio.

On July 26th, 1864, Ephraim Shay and Jane Henderson were married in Norwalk Ohio. Jane Shay would be his constant companion for the next 48 years through many changes in their lives. They had one son, Lette and three granddaughters. By 2001, Ephraim had 32 direct decedents; full list linked below

Shortly after their marriage, the Shay's moved up to a farm in Ionia County, Michigan. Here Ephraim was known to have served as a clerk in the Township of Sebewa, 1867-1868. In 1869 the Shay's were in the Township of Sunfield, Michigan and Ephraim was now operating a steam sawmill until 1873. Their son Lette was born here in January of 1870.

In 1873, with the tract of timber in Sunfield exhausted, the Shay family moved north to the Manistee river basin of Michigan and set up his sawmill and a general store near a lumber camp called Haring, newly settled only the year before.

Logging in the 1870's was far different than today. Essentially once all the trees along the rivers were harvested and floated down river to a mill, logging operations were done in the winter month as loggers depended on snow cover to more easily move the cut timber on sleds drawn by horse or oxen. This method naturally depended on the weather systems and if there were a mild winter there would be a low yield of lumber from the mills. If nature cooperated with the ideal 2 feet of snow needed to make ice roads then operations went relative well. When loggers could not move their harvest easily to the mill they were kept busy falling trees and attending to or making new roads to move the logs when the snows came.

By this method of obtaining lumber, it was estimated that as little as 17% of the actual cost, represented the lumber while as much as 73% was for transportation of the lumber. This unbalanced production cost was due to the manpower and time required to make and maintain the ice and snow roads needed to move the lumber. The winter of 1874-75 was one of little snowfall. Shay in his second year on the new land realized he had to overcome the obvious limitations of nature.

Ephraim, always the man of ideas, spent the summer of 1875 building his first tramway. A logging tram way is not fancy and was not intended to last forever. It is intended to access timberland just long enough to confiscate the desired timber and then withdraw from the land. Ephraim realized that if successful, he would reduce his transportation cost and thereby be able to reduce his selling price of lumber, undercutting his competitors.

Shay's first tramway was simple and crude. Made simply of wood rails spiked to a 26-inch gauge over a limited number of cross ties and laid with little concern for grading to level, the right of way. Logs were loaded onto a pair of disconnect logging type trucks and were drawn by horses to the mill. This proved dangerous for the horses that often would be overtaken on a downgrade and killed or seriously injured. While this method allowed Shay to now log year round and reduce his cost of getting in the lumber he realized animal powered trams were not the best answer. It would be 2 years before he had developed the replacement for horsepower.

In 1876, Shay built a conventional steam loco, very crude by his own description and experimented with it. Controlling the movement of the log cars up and down grades was not a problem however the dynamic force of conventional locomotives pistons proved to be too much and damaged the track curves. When Shay noticed that the heavier log cars had little or no effect on the wooden curves he set out to design an engine using the smaller logging type trucks. By the winter of 1876-77 Shay was developing his idea while communicating by mail with several boiler manufactures.

Just south of Haring, Shay found one William Crippen a machinist and foundry operator in Clam Lake, Michigan, a small town that later in 1877 was incorporated as the City of Cadillac, Michigan. Mr. Crippen had offered to construct a boiler and a pair of 5" diameter by 7" stroke cylinders giving Ephraim a 14 horsepower steam powered engine. Shay needed to consult with Crippen on the gearing necessary to link up the engine and the axle to be powered. Ephraim built a short flat car about 14' long with logging trucks near each end. The front truck was mounted normally while the rear truck was mounted fixed to the frame and could not swivel, much as normal drivers on a locomotive. He mounted the 3' diameter by 5' tall boiler centered on the car with the water tank over the front trucks and the Crippen's engine mounted crossways over the rear trucks. Shay experimented first with a chain drive from the engine through the floor to the truck axle. It is not known if he powered one or both axles however he soon found that the chain drive would not work for him and he next tried a belt drive. This worked and by mid August of 1877 Shay was testing his invention. He had spent $1000 on this experiment, a lot of money for a time when his 10 employees were making between 12½ and 15 cents per hour.

What Ephraim Shay had invented was a locomotive capable of delivering equal torque directly to wheels on both sides of the engine at the same time. This over came the dynamic force of his common rod engine whose normal pistons strokes jerked the engine side to side on each stroke, delivering excessive force to the wood rails, especially on the curves. You'll note that there is no outside driveline at this time. The locomotive worked but it was not perfect and Shay had to keep working on it to improve it over the winter of 1877-78. There is no exact description, photograph or drawing of the gearing on the two-cylinder engine Crippen built however, Ephraim describes in a letter that the locomotive had reversing. Since William Crippen copied and built it for other loggers we are fortunate to have a photograph of a copy of "The Original Shay" built by Ephraim Shay.

Shay's invention worked so well at bringing in the lumber that by 1878 he was able to reduce his selling price on lumber from $3.50/thousand board feet down to a mere $1.25/thousand board feet. He was also filling custom timber orders faster and cheaper than any other mill.

Colonel B. Wait, correspondent for Lumberman's Gazette, wrote an article June 7 1877, about Shay's invention drawing a lot of attention to Shay. Animal powered tramways were fairly common in the area and Shay started getting a lot of requests to build other loggers engines like his. He referred most down to William Crippen & Son who soon became backlogged building Shay style logging engines pictured here.

James Alley, another logger, is perhaps the true-life key to the success of the Shay locomotive. Shay's introduction of a locomotive into logging with tramways was a turning point in the logging industry, however it was not Ephraim Shay that would push for this revolutionary concept for his fellow loggers. In fact, Shay was trying to keep his use of a logging locomotive somewhat quiet to keep ahead of his competition. Wait's story in the Lumberman's Gazette ended that. James Alley went to Shay and was impressed with Shay's operation. Alley with his experience as a businessman, immediately understood how the use of a locomotive on his own large tracts of land would save him money and time. Alley went to William Crippen in an attempt to have a logging locomotive built, however he found Crippen & Son were already backlogged on the new locomotives for other loggers.

Alley turned next to the Lima Machine Works of Lima Ohio [formerly Carnes, Agerter & Co.], a well-known Machine Works. Shay had been dealing with this firm since 1873. This company specialized in manufacturing agricultural implements, boilers, gearing, lathes and other general machinery and sawmill equipment. Though not in the locomotive business, Alley convinced them to build their first locomotive. Alley had sketched out a concept following Shay's original logging locomotive and taken it to Lima, however Lima had success in Fontaine style steam tractors and appear to have based their first locomotive somewhat on that design. Alley in fact purchased the two additional locomotives, a 0-4-0 and a 0-6-0.

George W. Disman, from Lima Machine Works traveled to Michigan, to see Ephraim Shay's engine and William Crippen. Ira Carnes, an employee of Lima Machine Works worked on the plans for this first locomotive for seven months completing them in late October. Much of this time was put into testing ideas. The actual construction on the locomotive was started in the summer and the first real operational tests were not unto the end of November. It was shipped from Lima on the 4th of December and arrived at Alley's location on 12-9-1878. It was numbered #129 when put to use

Ephraim continued tinkering with his locomotive throughout 1878 and 1879 making improvements until he came to the point he needed a major renovation. Shay contacted Lima Machine Works who dispatched George Disman the 380 miles up to Haring in January 1880. Disman met with Shay and discussed the changes to be made and how best to complete the work. They arranged for the locomotive to be shipped down to Lima Machine Works for the work.

Why Lima Machine Works and not William Crippen who was a major factor in developing the first Shay? The obvious conclusion was Crippen's own success. Shay may have faced the same problem Alley did in 1878, Crippen was simply too busy to visit Shay. Lima, whom Shay had a long term relationship with already, due to sawmill implement purchases, had foreseen the potential of a logging locomotive and sent Disman.

When the locomotive arrived at Lima Machine Works only the rear truck was powered through a series of gears over the inside portion of the rear truck. Since Shay was constantly experimenting, it was not recorded exactly how it was operating. The engine arrived in late January 1880 where John Carnes a talented machinist and part owner became deeply involved in modifying the Shay.

Carnes came up with the concept of powering both trucks by means of bevel gears on the outside face of the wheels on one side. These would be powered by bevel gears on shafts mounted on the outside of the trucks, the shafts being connected to a crankshaft mounted centered on the side and turned by the engine mounted on the edge of the car above. This is the classic arrangement of Shay locomotives engines and gearing that would be used for all Shays built by Lima Machine Works. Why Carnes did not patent this design for himself or Lima Machine Works is a mystery, however within Lima it was known as the "Carnes design".

No other work was necessary on the locomotive and it was shipped back to Haring on April 26th 1880. Lima did not assign a construction number or shop number to this locomotive as they only re-built it for Shay. It would also be the only locomotive Lima ever worked on for Ephraim Shay. Of the 2767 Lima Shays built, none were ever for Ephraim Shay himself.

Milton J. Bond ordered Lima Machine Works sn-6 after he saw Shay's updated engine. It was to duplicate the Shay Lima had just converted and returned to Ephraim Shay. This became the first redesigned Shay completely built by Lima Machine Works. A photograph of sn-6 is therefore a sample of what Ephraim Shay's rebuilt locomotive looked like once returned. Lima would go on to build a total of 2768 Shays that would be used around the world.
Though Shay's locomotive was for the most part a combination of known and some even patented technology, Shay found that he could apply for a patent on his rebuilt locomotive. He filed for patent on March 30th 1881. Despite the fact that Lima Machine Works was already producing Shay style engines, the United States Patent Office did issue to Ephraim Shay, of Haring Michigan, Patent No. 242,992 for a Locomotive Engine. The patent describes a Shay Locomotive similar to the Lima production Shays with the drive shaft on the right. However Ephraim's patent describes a quite different means of attaching the engine to the drive shaft. Shay had patented a concept and not necessarily an exact plan. Thus it was determined that the issued patent did cover the Shays produced by Lima Machine Works and Michigan Machine Works granting Ephraim complete rights to the invention. To this end Shay, did license Lima Machine Works and Michigan Machine Works both to produce Shay type locomotives.  

Ephraim Shay acquired 64 shares of Lima Machine Works stock, valued at $1000 per share plus a royalty for each of the first 400 Shays Lima built, this amount being based on the weight of the completed locomotive. He received royalties for 16 years plus dividends on his shares. As a shareholder in Lima Machine Works, Shay held no position of responsibility and was not involved in further development of he Shay style locomotive from Lima.

Shay granted manufacturing rights to a second machine works, this one in Cadillac Michigan. A relatively new company, Michigan Iron Works, then under the ownership of J. W. Cummer and James Henderson in 1882. The locomotive they would produce differed a great deal from Shay's design but again, Shay's patented 'concept ' covered their design. It would be referred to as the "Henderson Shay". This Shay design was very different indeed. The drive shaft line was off the left center and under the engine and the pistons were under the horizontal boiler. This design actually proved to be more powerful than the Lima Shay's and in fact set a record of hauling 47 fully loaded log cars with 393 logs to a sawmill. Ephraim Shay's exact financial arrangement with the Michigan Machine Works is not know, however it had to be similar to that of Lima's as Mr. Shay would advertise and promote Shay Patent Locomotives sales for both companies.

In 1882 Shay had printed a 12 page circular mentioning both Machine Works. Shay also in November of 1883 traveled with George Disman of Lima Locomotive Works through the southern states promoting and selling the locomotives. In May and June of 1883 Shay was in Chicago for the National Exposition of Railway Appliances as an exhibitor with a model of his Shay engine. In July he was in Santa Fe NM for the completion of the A.T. & S.F. line through AZ. In the fall he was attending the Wexford County Fair in Cadillac Michigan.

William Crippen was not out of the picture yet. He had built several locomotives since the first engine for Shay and in 1882 Crippen filed his own patent [266,103 dated 10-17-1882] for a geared locomotive. His patent showed a locomotive similar the Henderson Shay however it differed in several key areas. Only one of these was ever built as Crippen failed to draw customers for further orders. After 1883, history fails to reveal any record of William Crippen.

Shay's arrangement with Michigan Iron Works ended in 1883 when the company went bankrupt. They had produced only 6 locomotives in their short history. James Henderson left for work with Lima Machine Works as soon as they were out of business. Why the Henderson style Shay was not more popular is somewhat another mystery since Ephraim was promoting both. The fact that Ephraim made road trips with Lima employees in the early 1880's and that Henderson became a Lima employee himself may clear some of the mystery. Lima on the other hand was doing quite well with Shay Patent Locomotives.

Union Foundry & Pullman Car Wheel Works just outside of Chicago was apparently also granted rights to build a Shay Patent Locomotive and according to the business card of Chicago banker I. B. Hammond, they intended to build only standard gauge versions, referring any inquiries for narrow gauge Shays to Lima Machine Company. No records of U.F. & P.C.W.W. show any Shay type locomotives were ever ordered through them or I. B. Hammond.

Coming out on top of the "1883 Gear Wars" was the 'Carnes design' of the Shay Patent Locomotive. This proved more popular than Ephraim's original patent design, the more powerful Henderson style Shay and Crippen's own geared engine design.

Ephraim Shay spent time and his own money promoting his locomotives until the late 1800's. Interesting is that Ephraim Shay was considered by the Partners of Lima Machine Works to have been 'too involved' with Shay improvements. They depended on James Henderson as a Lima Machine Works employee to be the driving force behind the Shay Locomotives improvements over the next few years. Henderson's major improvements on the Shay included the addition of the third piston and then the third truck. On March 6th, 1901, at the age of 62, Ephraim Shay sold all of his stock in Lima, thereby completely ending links with the company that made him famous in the logging and railroad industries.

In 1888, Shay moved to Harbor Spring Michigan, bringing his lumbering experience along. After other work, Shay's well-known Hemlock Central railroad was started c1893, running north out of the town. Although his Railway was primarily constructed for logging, in the summer, vacationers were hauled for 25 cents a trip. This is the 1909 description of Harbor Springs Railroad from Poor's Manual of Railroads.

HARBOR SPRINGS RY.-Harbor Springs to Carter's Mill, Mich., 8 m.; branches, 4.75 m.-total, 12.75 miles. Gauge, 2 ft. 6 in. Rail (steel) 16 lbs. Chartered Feb. 2, 1902. Road put in operation in 1902, doing a logging, freight and passenger business; extended two miles in 1904. Capital stock, $30,000. No bonded debt. Cost of road and equipment, $51,346. Locomotives, 3. Cars (passenger, 6; flat, 60; other, 6), 72. OFFICERS: EPHRAIM SHAY, Pres. & Gen. Mgr.; L. Shay, Sec. & Treas., Harbor Springs, Mich. The railroad was chartered on Feb 2, 1902, and opened on July 1, 1902.

Shay did not give up inventing. He was granted several more patents. In 1882 [269,473 dated 12/19/1882] for a Universal Joint and [269,723 dated 12/26/1882] for Propeller Shafts, in 1883 [273,043 dated 1/19/1883] for Logging Wheels, in 1884 [301,528 dated 7/8/1884] for a Valve Gear, in 1894 [521,868 dated 6/26/1894] a Fire-Fighting Hose Cart, and in 1902 [706,604 dated 8/12/1902] for a Shay type Loco Truck.

Mr. Ephraim Shay, credited inventor of the Shay Patent Locomotive, did indeed enjoy a life of variety and interesting vocations. We learn now that Ephraim Shay's 'concept' of powering the smaller complete axles rather than having pistons power each side of an engine independently, was the foundation of all geared locomotives. The question of rather Ephraim Shay or John Carnes should be credited as the real inventor of the Shay with it's right side gearing is answered simply by Lima Machine Works. Ephraim Shay must have had more direct input than is reported by Lima's records for it is Lima that paid Ephraim royalty payments on the first 400 shays, something they would never have agreed to were John Carnes more deserving the credit. To say that it was solely due to Shay getting the patent first would be unfounded because a patent could be challenged if filed falsely

Rick Henderson

Ephraim Shay Genealogy

updated 9-2014


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NCC invites public consultation on solutions to fix network monopoly
Taiwan | February 12 2014

The National Communications Commission (NCC) recently gathered public opinion on issues such as fixed-line bandwidth competition and last-mile equal access and held a hearing to which all relevant telecommunications operators were invited to convey their opinions. The NCC has yet to confirm whether it will submit a complete draft convergence act to the Executive Yuan.

Procurement of Huawei's products banned in Taiwan
Taiwan | December 11 2013

National securities authorities have warned the National Communications Commission and requested that telecommunications operators stop the procurement of network communications equipment manufactured by suppliers in China, such as Huawei. Huawei is reportedly upset about the governmental control measures.

Mandatory seven-day trial of mobile internet service imminent
Taiwan | November 27 2013

The National Communications Commission recently announced that the Regulation Governing Mobile Communications Services will be amended to compel mobile operators to agree under their subscription contract to provide seven days' free internet service to subscribers for the purpose of evaluation. Consumers will have the right to request a minimum seven-day free trial before entering into a contract with mobile operators.

4G spectrums turn hot
Taiwan | October 23 2013

The competitive tender for 4G licences began recently with the participation of four incumbent operators and three new operators. The government has indicated that the tender "has overheated" and consumer advocates have openly criticised the design of the 4G tender rules for being problematic.

Liberalisation of telecommunications service sector between Taiwan and China
Taiwan | August 21 2013

Taiwan and China have agreed to the mutual liberalisation of the telecommunications service sector under the Cross-Strait Agreement on Trade in Services. Under the agreement, Taiwan will open Type II telecommunications businesses and China will open four additional services to Taiwanese investors. However, Taiwan will still impose restrictions, including a shareholding cap on Chinese investors.

New Communications Convergence Act planned for 2014
Taiwan | August 14 2013

The Executive Yuan recently concluded that the National Communications Commission (NCC) should reconsider its draft proposal to the amendment of the Telecommunications Act. It stated that the NCC is expected to present a new communications convergence regulation replacing all existing broadcasting laws by the end of March 2014.The NCC responded that it will attempt to meet the deadline.

Common carrier defence to be further examined
Taiwan | July 17 2013

The National Communications Commission (NCC) has been under fire for its proposed compulsory measures in the draft amendment of the Telecommunications Act to assist further content owners whose rights may be infringed by file sharing. The NCC insists that it has no intention of intervening in content surveillance, but yields to the rulings of relevant government agencies whenever a blockade is technically available.

NCC announces 4G auction
Taiwan | June 05 2013

The National Communications Commission (NCC) has announced that the 4G auction will be conducted in November 2013. Subject to the NCC's approval, bid winners which are mobile phone business operators may apply to assign to each other based on the same bandwidth conditions. The NCC expects that within five years, up to 500 megahertz of bandwidth will be available through auction for more mobile broadband services.

China Mobile terminates share acquisition in FarEasTone
Taiwan | May 08 2013

China Mobile and FarEasTone recently announced that the share transfer agreement executed between them in 2009 will expire in June 2013. In addition, the two companies will not discuss equity investment again until the Taiwanese authorities lift the ban prohibiting Chinese citizens and legal entities from investing in the Taiwanese telecommunications industry.

NCC announces hearing on network interconnections
Taiwan | April 24 2013

The National Communications Commission had planned to resolve existing disputes regarding network interconnections between major telecommunications operators by amending the existing Regulations Governing Network Interconnections between Telecommunications Enterprises by the end of 2012. However, this objective was not achieved and a hearing is due to be conducted on April 25 2013.

NCC requires functional separation in Chunghwa Telecom
Taiwan | March 13 2013

Further to its efforts to introduce functional separation in Chunghwa Telecom in the latest amendments to the Telecommunications Act, the National Communications Commission (NCC) has again submitted a legislative proposal to the Executive Yuan for approval. The NCC has proposed that Chunghwa Telecom should always offer equal prices for the provision of access, if functional separation is not approved.

NCC relaxes telecommunications retail price control
Taiwan | January 23 2013

The National Communications Commission recently announced that mobile access tariffs will be adjusted. The commission believes that easing retail price control in the mobile communications market will help to reduce the burden on smaller operators and guide market competitors to further reduce retail prices.

NCC considers spectrum trading
Taiwan | November 28 2012

The National Communications Commission plans to deregulate spectrum trading in 2013. However, major telecommunications operators are sceptical about the fast-changing policy and have questioned whether it is realistic to implement a spectrum trading system in less than a year when a draft regulation has not yet been made available for public consultation.

NCC decided on free internet interconnections
Taiwan | October 10 2012

The National Communications Commission has announced that the Regulations Governing Network Interconnections Among Telecommunications Operators will be amended, and network interconnections between three major operators will soon be required to be free of charge. The newly amended regulations will also require other operators to invest in infrastructure in order to enjoy free interconnections.

NCC announces release of 4G licences
Taiwan | September 26 2012

The National Communications Commission has announced that from 2013, three frequency bands – 700 megahertz (MHz), 900MHz and 1800MHz – which are equivalent to the bandwidth of 135MHz x 2 will be released for auction. However, the most surprising news is that the frequency bands will be released in units of 5MHz x 2, which some see as a revenue-raising tactic by the government.

Congress approves appointment of new NCC commissioners
Taiwan | August 22 2012

The Legislative Yuan organised a special session to approve the four new commissioners of the National Communications Commission nominated by the premier. Although all legislators from the opposition parties and some ruling party legislators voted against the nominees, all four still received a majority of the votes and have now taken office.

Ministry publishes public consultation on mobile broadband service licences
Taiwan | July 18 2012

The Ministry of Transportation and Communications recently solicited public opinions regarding the deregulation of new mobile communications services (ie, the attention-grabbing plan for fourth-generation (4G) licensing). According to the consultation paper released by the ministry, the scope of 4G licensing will be limited to 700 megahertz (MHz), 900 MHz and 1800 MHz in the future under the principle of technology neutrality.

NCC announces dominant 3G market players
Taiwan | July 11 2012

The National Communications Commission (NCC) has recognised Chunghwa Telecom, Taiwan Mobile and FarEasTone as dominant players in the mobile communications service market for Type I telecommunications enterprises. According to statistics released by the NCC, third-generation has become the mainstream technology of mobile communications in Taiwan, with a subscriber base in excess of 21 million.

Chunghwa Telecom opposes amendments to the Telecommunications Act
Taiwan | June 06 2012

The National Communications Commission recently conducted a public hearing on the proposed amendments to the Telecommunications Act. The changes include a proposed functional separation of Chunghwa Telecom, so that its last-mile connection is released and can be shared by all telecommunications operators. The company opposes what it believes to be tantamount to a structural break-up.

Government postpones Huawei's investment in telecoms sector
Taiwan | May 09 2012

The Ministry of Economic Affairs recently announced the third wave of sectors which have been opened to investment by Chinese investors. Type I telecommunications businesses still have not been deregulated. Huawei, a Chinese telecommunications equipment manufacturer, has been seeking to set up a subsidiary in Taiwan; however, it has yet to obtain approval from the Taiwanese government.

NCC approves second submarine cable link between Taiwan and China
Taiwan | April 25 2012

After approving Chunghwa Telecom's application for the Kinmen-Xiamen Submarine Cable Deployment Project, the National Communications Commission has now further approved a submarine cable link between Taiwan and China's Fujian Province. The entire project is expected to be completed by the fourth quarter of 2012.

NCC requests operators to guarantee internet bandwidths
Taiwan | March 28 2012

The National Communications Commission (NCC) has officially requested that telecommunications operators which provide internet services should guarantee the minimum speed and bandwidth set forth in their promotional programmes. The NCC released its new requirement immediately after the Fair Trade Commission imposed a NT$5 million fine on Chunghwa Telecom for false and misleading advertising.

Single flat rate for both local and long-distance calls
Taiwan | January 25 2012

The National Communications Commission has approved Chunghwa Telecom's most recent plan for a uniform tariff for local and domestic long-distance calls nationwide. Local and long-distance calls from a household fixed-line phone will now be charged at NT$1.60 (US$0.05) per three minutes. During discounted time slots, calls will be charged be at NT$1 per three minutes – this is the lowest local call tariff worldwide.

Ministry and NCC warming up for 4G licences
Taiwan | December 21 2011

Hopes have been raised for an earlier launch of fourth-generation (4G) operations by the news that the Science and Technology Advisory Group of the Executive Yuan is coordinating with the Ministry of Transportation and Communications and the National Communications Commission on plans to use the 700 megahertz spectrum or idle frequency bands around 2.6 gigahertz for 4G services.

NCC approves submarine cable link between Taiwan and China
Taiwan | October 12 2011

The National Communications Commission has approved Chunghwa Telecom's application for the Kinmen-Xiamen Submarine Cable Deployment Project. The cable will initially have a bandwidth capacity transmission speed of 9.6 terabytes per second. According to Chunghwa Telecom, the project is scheduled for completion by March 2012 and the construction cost is estimated at around $14 million.

Operators delay plans for tier-pricing mechanism for mobile internet users
Taiwan | August 17 2011

As part of Chunghwa Telecom and Taiwan Mobile's plans to expand their networks and base stations in order to provide high-speed internet access and accommodate ever-growing mobile internet access demands, they intend to break away from the current system in which no differentiation is made between heavy and light users. However, the National Communications Commission opposes this plan.

WiMAX and LTE: an unsolved policy dilemma
Taiwan | June 29 2011

The government is once again considering WiMAX deregulation and its possible future. The Executive Yuan recently called a meeting to review strategies to address the plight of WiMAX operators. Among the proposals, the Ministry of Economic Affairs recommended that operators be allowed to consolidate among themselves before they are required to achieve the deployment threshold of 70% population coverage.

NCC launches investigation into telecoms equipment made in China
Taiwan | June 15 2011

The National Communications Commission has confirmed that it has sent letters to all telecommunications operators in order to compel them to submit a list of all the network equipment included in past and present procurement projects that was manufactured by Chinese vendors.

NCC approves Chunghwa's new fibre-to-the-home service rates
Taiwan | May 25 2011

Chunghwa Telecom has lowered its retail prices for both its 50Mbps/3Mbps and 20Mbps/2Mbps FTTx broadband services in the hope that the promotional plan would enable most broadband users to upgrade to the higher speed plans. In light of various reasons, the National Communications Commission urged Chunghwa to lower its wholesale prices for FTTx services, but it did so by between 1% and 2.5% only.

Court confirms net neutrality rule on discriminatory pricing plan
Taiwan | May 11 2011

The Taipei High Administrative Court recently upheld the National Communications Commission decision to force Chunghwa Telecom to remove certain restrictions on its fibre-to-the-home high-speed internet service, Hinet FTTx. In deciding to apply the net neutrality principle narrowly, the NCC appears to have set out its position regarding non-discrimination in the provision of telecommunications services.

New fixed and mobile service pricing plans about to launch
Taiwan | April 13 2011

The National Communications Commission has confirmed a unified rate of telephone calls from offshore islands to anywhere on the Taiwanese mainland. This is the first step in achieving the goal of 'unified rate' calls nationwide, which means that there will be no more long-distance calls in Taiwan. The commission announced that the new measure will come into effect from early 2012.

Commission relaxes multimedia-on-demand restrictions
Taiwan | February 02 2011

The National Communications Commission has decided to loosen the restrictions on Chunghwa Telecom's multimedia-on-demand service by amending the Cable Television Act. With this amendment, the NCC has allowed Chunghwa Telecom to integrate vertically in order to compete with cable multiple system operators which enjoy similar market conditions.

Commission approves direct submarine cables across Taiwan-China straits
Taiwan | December 15 2010

The National Communications Commission has announced its amendments to the Regulations Governing Fixed-Network Telecommunications Businesses, allowing for the development of direct submarine cables across the straits between Taiwan and China. The relevant legal matters have now been approved.

Ban on cross-strait submarine cables lifted
Taiwan | October 13 2010

The Ministry of Transportation and Communications has announced plans to allow cables to be laid connecting Taiwan and other offshore islands to China. However, the National Communications Commission will continue to restrict mutual investment between cross-strait telecommunications operators.

New commissioners elected into the NCC
Taiwan | September 15 2010

Three new commissioners have been inaugurated into the National Communications Commission. Su Herng, Chang Si-chung and Wei Shyuo-wen succeeded Bonnie Peng, Lee Ta-sung and Hsieh Chin-nan. Commissioner Liu Chorng-jian was appointed to a second term. All the new commissioners are from the academic sphere.

Taiwan to implement digital convergence policy
Taiwan | September 08 2010

The Executive Yuan has announced the Digital Convergence Development Policy in order to initiate a two-stage legislative overhaul and develop digital convergence industries. The government plans to relax the restrictions on cross-ownership of telecommunications, broadcasting and internet-based businesses.

Major telecommunications companies embrace fixed-mobile convergence
Taiwan | September 01 2010

In a move that has come as no surprise to the market, Taiwan's third-largest telecommunications company, Far EasTone Telecommunications Co, has announced that its board has approved a public tender offer for shares of its fixed-line subsidiary, New Century InfoComm Tech Co. Far EasTone thus becomes the third operator providing fixed-mobile convergence services.

Government to review 4G policy as Intel dissolves WiMAX taskforce
Taiwan | August 18 2010

According to an official, following Intel's unexpected move to dissolve its taskforce on worldwide interoperability for microwave access (WiMAX) technology, the government plans to review its national fourth-generation (4G) wireless policy. Although Taiwan is one of the strongest supporters of WiMAX technology, equipment makers and operators are concerned about the rise of Long-Term Evolution technology – its 4G rival.

Department of Post and Telecommunications plans to release 4G licence spectrum
Taiwan | June 30 2010

The director general of the Ministry of Transportation and Communications's Department of Post and Telecommunications has announced a plan to release at least five new licences for fourth-generation mobile technologies. Critics argue that the plan appears to invite only those players with deep pockets into the auction process and may force smaller players to consolidate or merge before entering the process.

Identical pricing for local and mobile calls from 2011
Taiwan | June 23 2010

The National Communications Commission has approved a policy to shift the right to determine the price of a local-to-mobile phone call from the mobile operators to the fixed network operators from January 1 2011. It is estimated that the price of local-to-mobile calls could drop by up to 60%.

NCC allows WiMAX operators to upgrade to LTE technology
Taiwan | June 09 2010

The National Communications Commission has reacted positively to the news that Taiwan's incumbent Worldwide Interoperability for Microwave Access operators intend to convert to Long Term Evolution technology, which is considered to be a fourth-generation mobile technology.

NCC rejects Chunghwa's free ADSL upgrade plan
Taiwan | May 19 2010

The National Communications Commission (NCC) has rejected Chunghwa Telecom's plan to upgrade low-speed ADSL services (ie, those in the 256 kilobytes per second (Kbps) to 512 Kbps, 1 megabit per second (Mbps) to 2 Mbps, and 2 Mbps to 3 Mbps ranges) free of charge due to fears over market competition and quality of service.

FITEL obtains final WiMAX licence
Taiwan | May 12 2010

The National Communications Commission has issued the final worldwide interoperability for microwave access (WiMAX) regional licence to First International Telecom. All six WiMAX operators have obtained operation licences to provide mobile broadband servicse in Taiwan since they were awarded regional licences in August 2007.

NCC plans to rewrite wholesale pricing regulation
Taiwan | March 24 2010

The National Communications Commission (NCC) has announced a proposal to amend the Regulations Governing Tariffs of Type I Telecommunications Enterprises with respect to wholesale price regulation of operators with significant market power. The NCC aims to lower transaction costs among the telecommunications operators and promote the competitiveness of the telecommunications market.

NCC to appoint universal data service providers annually
Taiwan | March 17 2010

The National Communications Commission has announced an amendment to Article 13 of the Regulations on Telecommunications Universal Service, providing that it may, by March 1 of the year before the year of implementation, announce and appoint the incumbent operators or other Type I telecommunications operators to offer universal data services to specified remote villages.

NCC retains ban on Chinese investment in Type I telecoms
Taiwan | February 03 2010

Taiwan and China have formally signed three new cooperation agreements in the telecommunications sector. However, the National Communications Commission maintained its position regarding the prohibition of Chinese investment in Type I telecommunications operators, despite the fact that the proposed Economic Cooperation Framework Agreement with China is likely to be signed in the near future.

NCC to Implement Tariff Cuts Regime
Taiwan | January 27 2010

The National Communications Commission has announced a rate reduction plan to cut significantly nationwide mobile phone service rates, reasoning that the cuts will benefit carriers in the long run. The decision has upset many players in the telecommunications industry, which reject the commission's reasoning, oppose its policy and have threatened to appeal should the cuts be implemented.

Chunghwa Telecom to Reduce Internet Protocol Peering Fees
Taiwan | September 23 2009

The National Communications Commission has agreed upon a new rate plan for Internet Protocol peering fees provided by Chunghwa Telecom in order to ease tensions among other internet service providers, including Taiwan Fixed Network. The commission hopes that the savings made by the ISPs due to the reduced peering fees will be passed on to consumers.

Reducing the Digital Divide: Power Line Communication
Taiwan | September 16 2009

The National Communications Commission and Far Eastone Telecommunication (FET) have announced that the first steps have been taken towards reducing the digital divide in certain remote villages by using lines also used for electric power transmission to carry the data needed to provide broadband services. FET will offer free broadband access with speeds of at least two megabits per second to the area until 2011.

Internet Protocol Peering Fees to be Screened Annually
Taiwan | July 22 2009

The National Communications Commission has announced plans to screen the Internet Protocol peering fees annually rather than biennially, in order to settle the dispute regarding the calculation of such fees payable by Taiwan Fixed Network to Chunghwa Telecom.

China Mobile Plans to Acquire 12% Stake in Taiwanese Operator
Taiwan | June 24 2009

Representatives of China and Taiwan have signed a declaration which, among other things, opens the doors to Chinese investment in Taiwan. Just three days later, Far EasTone Telecommunications Limited announced its plans for a strategic cooperation agreement and a share subscription agreement with China Mobile Limited, the world's largest mobile telecommunications operator.

Congress Agrees Bill on Base Station Control Measures
Taiwan | May 20 2009

If a proposed bill to amend the Telecommunications Act is passed in the forthcoming general assembly meeting, not only will existing second and third-generation operators be threatened with the removal of their base stations, but the would-be operators of Worldwide Interoperability for Microwave Access will be left with nowhere to construct their base stations.

Mobile Telecommunication Firms Ordered to Float Shares
Taiwan | May 13 2009

The National Communications Commission has approved the Procedure on Public Offerings of Mobile Operators. Mobile operators (including third-generation mobile operators) and 1900 megahertz digital low-tier cordless telephone operators are required to comply with certain measures in order to allow for the supervision of their financial management.

Telecom Giants Ordered to Cut Prices for Third Consecutive Year
Taiwan | May 06 2009

For the third consecutive year the three largest mobile network companies in Taiwan have been ordered to cut the rates charged on the most expensive second-generation (2G) mobile network calls, local calls to 2G mobile networks and calls made using prepaid cards. These cuts amount to an overall price decrease of almost 15%, and have been widely criticized by players in the industry.

NCC Sets Out New Policy Goals
Taiwan | April 29 2009

Since the new National Communications Commission was formed in August 2008, the seven newly elected commissioners have attempted to complete the tasks left unfinished by the previous commissioners, while also setting out new policy goals. The commision has published its Middle-Term Policy Plan for 2009 to 2012, so as to distinguish it from the first-term policy plan established by the predecessors in 2006.

NCC to Arbitrate on Dispute over Internet Protocol Peering Fees
Taiwan | April 15 2009

Taiwan Mobile has refused to pay Internet Protocol (IP) peering fees to Chunghwa Telecom, Taiwan's largest internet service provider, arguing that IP peering between providers should be free. It has filed a claim with the National Communications Commission under Article 28 of the Regulations on Network Interconnection among Telecommunications Enterprises, requesting the commission's arbitration.

New Universal Service Scheme Raises Concerns for Chunghwa Telecom
Taiwan | February 04 2009

The National Communications Commission has proposed an amendment to the Regulations Governing the Telecommunications Universal Service which would facilitate the use of universal service funds and empower the regulator to choose the remote villages in need of broadband network infrastructure under the universal service regime.

WiMAX Rules Revised to Include Content Control
Taiwan | January 21 2009

The National Communications Commission has proposed amendments to the Regulations on Wireless Broadband Access Services. Among other things, the amendments define the terms 'multimedia services' and 'content of channel' and oblige worldwide interoperability for microwave access operators to obtain approvals or licences under broadcasting laws before offering content through multimedia services.

New Rules Adopted on Takeover of M-Taiwan Project Base Stations
Taiwan | December 10 2008

In order to allow the Mobile Taiwan National Project to utilize its experimental equipment and base stations, the National Communications Commission has approved amendments to the regulations governing wireless broadband access service. These pave the way for the use of experimental base stations for commercial purposes.

National Communications Commission Proposes Amendments to Organization Act
Taiwan | December 03 2008

The National Communications Commission recently reviewed the Organization Act and proposed several changes in order to bring it into line with the demands of independent regulation. These changes include a relaxation of the qualification thresholds for entry into the commission and amendments to the scope of each commissioner's role.

Ban on Investing in New WiMAX Operator to be Lifted
Taiwan | November 26 2008

The Appeal Committee of the National Communications Commission (NCC) recently revoked a ban on Chunghwa Telecom acquiring shares in a new worldwide interoperability for microwave access operator imposed by the previous NCC commissioners. This is the first case in which a resolution made by previous commissioners has been dismissed.

Fourth-Generation Technology at a Crossroads: WiMAX or LTE?
Taiwan | September 24 2008

Taiwan's three dominant mobile operators have confirmed plans to incorporate Long-Term Evolution into their second-generation and third-generation systems. However, the government and network-equipment manufacturers still seem positive about the prospects for the Worldwide Interoperability for Microwave Access industry. There is thus uncertainty as to which technology will ultimately prevail.

NCC Bans WiMAX Business Spin-Off
Taiwan | August 13 2008

The National Communications Commission has rejected an application by First International Telecom, one of the six WiMAX licence holders and the only personal handy-phone system operator in Taiwan, to spin off its WiMAX business from its personal handy-phone system operation to its wholly owned subsidiary.

New NCC Commissioners Appointed
Taiwan | July 30 2008

The Legislative Yuan recently approved the nominations for the next term commissioners of the National Communications Commission (NCC). Although some critical issues regarding the NCC Organization Act were resolved in 2007, several problematic issues concerning the organization and functions of the NCC remain to be dealt with. Therefore, the NCC has published proposed amendments to the act.

M-Taiwan Project WiMAX Base Stations to be Commercialized
Taiwan | July 02 2008

To facilitate the network deployment of Worldwide Interoperability for Microwave Access (WiMAX), the National Communications Commission is currently amending the Regulations on Wireless Broadband Access Services in order to allow WiMAX licensees to obtain the experimental base stations that are part of the Mobile Taiwan National Project.

Three companies appointed to provide universal data services
Taiwan | June 11 2008

Following the completion of its 2007 Broadband Access to Every Village project, the National Communications Commission (NCC) is aiming to extend the construction of the broadband network infrastructure to further remote areas in 2008. The NCC has appointed three companies to offer universal data services for broadband access to 50 mountain villages in 12 different counties.

No ITS Pricing Rights for Chunghwa Telecom until 2010
Taiwan | May 28 2008

Although the Internet Telephony Service (ITS) was opened up to operators in 2005, to date no licensed ITS providers have launched their services due to ongoing negotiations of network interconnection agreements with Chunghwa Telecom. In order to introduce competition into the market, the National Communications Commission has ruled that Chunghwa will have no pricing rights on the ITS until the end of 2010.

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