New Law Would Help Taiwan’s Communications Sector Work Around Chinese Cable Slicing

Taiwan is increasingly looking abroad to strengthen its domestic communications resilience. On July 21, Taiwan’s Legislative Yuan unanimously passed a bill that eases restrictions on foreign firms seeking to enter its telecommunications sector, particularly those offering low-earth orbit satellite internet services across the island. The proposal will likely be approved by Taiwanese President Lai Ching-te, whose party joined in proposing the measure as part of a multi-party legislative committee. If fully implemented, the bill will help bolster the island’s resilience against Chinese intrusions into its communications networks. Reforms Intended To Boost Resilience The proposed changes would modify the Telecommunications Management Act to allow authorities to exempt foreign companies from certain regulatory hurdles on a case-by-case basis. Under current Taiwanese law, foreign telecoms firms seeking to operate on the island are required to retain a Taiwanese chairperson and only hold a minority direct ownership share of the venture. While this structure has allowed domestic firms, namely Chunghwa Telecom, to sign deals with foreign satellite providers, these restrictions have limited market entry for global competitors, particularly SpaceX’s Starlink satellite internet network and its main competitor, Amazon’s nascent Leo system. The changes follow growing concern within the Legislative Yuan over the resilience of Taiwan’s communications infrastructure and emerging discussions over joint ventures. Several new laws came into effect in January to strengthen punishments for cutting undersea internet cables and attempting to evade detection from the Taiwanese Coast Guard by switching off vessel transponders. Moreover, immediately following debate over the latest legislative proposal, Chunghwa Telecom chairman Alex Chien said the firm remained open to becoming Starlink’s “exclusive agent” in Taiwan, although Minister of Digital Affairs Lin Yi-jing publicly noted that Starlink had expressed limited interest in expanding services to the island. China Poses Threat to Taiwan’s Communications Infrastructure Taipei’s efforts follow a series of cable-cutting incidents targeting the island’s outlying territories, along with expansive Chinese cyber intrusions into the island’s networks. Taiwan has suffered 36 cuts to the undersea cables carrying much of its internet traffic between 2019 and 2023, including two cuts near Matsu linked to a Chinese vessel that disconnected the region’s internet for weeks in February 2023. In December 2025, Taiwanese authorities sentenced a Chinese national to three months in prison over his involvement in cutting cables between the main island and the Penghu Islands in the Taiwan Strait. In April, Taipei once again activated emergency response measures, including a microwave array, after cables were cut to Matsu when a storm caused debris from a shipwreck to sever the connection. Along with cable cutting, China has also extensively targeted Taiwan’s domestic communications networks. In January 2026, Taiwan’s National Security Bureau revealed that Chinese cyberattacks targeting the island’s communications networks had increased nearly 7 percent in comparison to 2025. One hacking group, BlackTech, allegedly targeted communications and transmission infrastructure to access sensitive internal networks. It also planted vulnerabilities for exploitation in the event of a crisis. Chinese hackers have also allegedly targeted Taiwanese internal messaging platforms. In July, the island’s Ministry of Justice Investigation Bureau charged two Taiwanese nationals with assisting a Chinese state-aligned hacking network to gain access to LINE, a popular domestic communications service. Washington and Taipei Should Work To Develop Redundancies The United States and Taiwan should use their broader trade relationship and respective telecommunications sectors to enhance the island’s strategic resilience. These efforts would help deter Chinese coercion by reducing its efficacy, as any cut or disruption could be quickly patched. Once the bill is promulgated, Taipei should expedite its efforts to develop critical capabilities within its communications networks by allowing foreign firms to access its market. Moreover, the island should regulate its market to prevent the formation of new dependencies on a single provider for cable alternatives such as satellite internet or microwave transmitters. These efforts should extend to other critical regional partners, particularly Japan and the Philippines, which also host critical cable infrastructure and satellite ground stations and continue to counter Chinese cyber and communications coercion. Jack Burnham is a senior research analyst in the China Program at the Foundation for Defense of Democracies (FDD). For more analysis from Jack and FDD, please subscribe HERE. Follow FDD on X @FDD. Follow Jack on X @JackBurnham802. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.