particular, future decreases in tariff rates could immediately and substantially decrease our revenues. In particular, as a Type I service  provider under the Republic of China Telecommunications Act, or Telecommunications Act, we are constrained in our ability to  raise prices. For instance, the National Communications Commission adopted a three-year price reduction plan from April 2007  to March 2010 and a second round three-year price reduction plan from April 2010 to March 2013, resulting in a number of price  reductions in the tariff structures relating to our domestic fixed communications and mobile communications services. See “Item 5.  Operating and Financial Review and Prospects—Overview—Tariff Adjustments”. We cannot assure you that we will not be required  to further reduce our tariffs again in the future. Any mandatory tariff reductions could have a material adverse effect on our revenues.  In addition, as requested by Legislative Yuan and National Communications Commission, we implemented a discounted tariff for  telecommunication services from Kinmen, Matsu and Penghu Islands to Taiwan in April 1, 2011. We further applied one single tariff  to all the telecommunication services for the entire country since January 2012. Due to such adjustment of tariff, telecommunication  services which used to be charged as long-distance telecommunication are now charged at a lower rate. Such adjustment of our tariff  may have material adverse effect on the revenues of our fixed communications business. According to a domestic news article, an official from the NCC was publicly quoted saying that he believed that the  Telecommunications Act should be amended to force us to implement network separation of the last mile network infrastructure to  promote competition. Network separation would force us to divest our last-mile network infrastructure, so all telecommunications  providers would have equal competition and access to the last-mile network infrastructure. Although there is no definitive proposal  being discussed by the NCC yet, any type of forced network separation could have a material adverse effect on our business and  results of operations. We operate our businesses with approvals and licenses granted by the government. If these approvals or licenses are revoked  or suspended or are not renewed, or if we are unable to obtain any additional licenses that we may need to operate or expand our  business in the manner we desire, then our financial condition and results of operations, as well as our prospects, will suffer. For  example, there are currently three mobile network operators that offer 2G mobile services in Taiwan. The licenses granted by the  R.O.C. government authorities for operating 2G mobile services on the 900MHz and 1800MHz spectrum can be extended to June  2017 based on operator’s request for extension, according to Executive Yuan’s announcement on November 22, 2010. We filed a  request with the NCC to extend our 2G license to June 2017 on November 29, 2011, which is currently under review by the NCC.  The Executive Yuan also announced that the rights to use the 2G frequency spectrum will be sold at an auction for technology neutral  usage and further announced in November 2010 that the 4G license auction will be held before June 2015. However, according to a  recent domestic media report, the timing for the 4G license auction could be advanced to June 2014. We cannot assure you that we  will be able to extend the validity of our licenses or obtain the licenses that we need in the future. If we are unable to successfully  acquire the rights to use the frequency spectrum that we need for our future business operations, our business prospects and future  results of operations may be adversely affected which as a result may lead to a material impact on our business revenues.  As a provider of telecommunication products and services, our business operations are subject to the regulations of the  R.O.C Fair Trade Act, or the FTA, which is administered and enforced by the R.O.C. Fair Trade Commission, or the FTC. The FTA  requires, among other things, that the marketing and promotional materials of a business to be true and not misleading. The FTA also  prohibits a business from participating or engaging in a cartel or other anti-competitive conduct. The FTC has the authority under  the FTA to investigate and, where appropriate, impose fines and penalties on a business that violates the FTA. The consequences of  violating the FTA, depending on the nature of the violation, could be severe. If the FTC holds a business accountable for making  a false or misleading representation in any of its advertisements, it could order the business to stop the distribution or sale of the  products or services in question and take other remedial or corrective measures, such as the imposition of monetary fines ranging  from NT$50,000 to NT$25,000,000. If the FTC finds a business liable for participating in a cartel, the FTC could order the business  If we are unable to obtain and maintain the licenses to operate our business, our business prospects and future results of  operations would be adversely affected.  We have been investigated and fined by the R.O.C. Fair Trade Commission in the past and may continue to be investigated and  fined in the future.  8 P AR T I