Hong Kong: Overview Of The New Telecoms And Internet Regulations In The PRC

Last Updated: 12 March 2001
Article by Elaine Y.M. Lo

The State Council promulgated the long-awaited PRC, Telecommunications Regulations (the "Telecoms Regulations") and the Administration of Internet Information Services Procedures (the "Internet Administration Procedures") on 25th September 2000 as a first step towards officially regulating the telecoms market and the operations of Internet information service or content providers in the PRC. Since then, other regulations, such as the Administration of Internet Electronic Messaging Services Provisions (the "EMS Provisions") and the Administration of Engagement by Internet Sites in the Business of News Publication Tentative Provisions (the "News Publication Provisions"), have been separately promulgated with a view to supplementing the Telecoms Regulations and the Internet Administration Procedures.

The Telecoms Regulations Of The PRC

The Telecoms Regulations contain a definition for "telecommunications". This term is defined as the transmission, emission or receipt of voice, word texts, data, picture images and other forms of information using the wire or wireless electro-magnetic system or the wire or wireless electro-optical system. In accordance with international practice, the Telecoms Regulations classify telecommunication services into 2 main categories, namely, the basic telecoms services and the value added telecoms services. Basic telecoms services refer to the provision of basic infrastructure for public networks, transmission services for public data and basic voice communication services. Value added telecoms services refer to the provision of telecommunication and information services utilizing the basic infrastructure of public networks.

Attached to the Telecoms Regulations is a catalogue containing a list of the basic telecoms services and a list of the value added telecoms services.

The list of "basic telecoms services" includes (i) domestic long distance and local telephone services provided by fixed networks, (ii) telephone and data transmission services provided by mobile networks, (iii) satellite communications and mobile satellite communications services, (iv) Internet services and other transmission services for public data, (v) the leasing and sale of bandwidth, wave length, optical fiber, optical cable, pipelines and other elements of networks, (vi) network loading, network inter-connection and contracting out of network services.

The list of "value added telecoms services" includes (i) electronic mail services, (ii) voice mailbox services, (iii) storage and retrieval of online information, (iv) electronic data interchange, (v) processing of online data and online transactions, (vi) value added fax services, (vii) Internet connection services, (viii) Internet information services, and (ix) video conferencing services.

Although wireless paging services and the resale of basic telecoms services are included in the category of "basic telecoms services", it is stated in the catalogue that these two types of services will be managed as though they were listed under the category of "value added telecoms services".

Clause 80 of the Telecoms Regulations expressly states that specific rules and regulations governing foreign investment in the telecoms industry and, hence, the Internet services industry (which is part of the telecoms industry), will be separately formulated by the State Council. The State Council will not (probably) formulate such rules and regulations until China has acceded to the World Trade Organization ("WTO"), as the rules and regulations must conform to the WTO commitments made by China to relax market access and to liberalize foreign investment in the telecoms sector.

Provision Of Internet Information Services

The Internet Administration Procedures classify Internet information services into two categories, namely, the operational (or commercial) type and the non-operational (or non-commercial) type. The commercial type of Internet information services is the provision to online users of information services or web page production services through the Internet for remuneration or compensation, whilst the non-commercial type of Internet information services is the provision to online users, free of charge, of information which is in the public domain and openly accessible. Providers of non-operational Internet information services are not allowed to engage in the provision of operational Internet information services.

The Internet Administration Procedures implement a licensing system for all operational providers of Internet information services, and require them to obtain an "Internet Information Services Value Added Telecommunication Services Operating Permit" (the "Operating Permit"). Non-operational type of providers (which provide information services free of charge) are, on the other hand, only required to comply with a recordal system. Whilst an application by an operational provider of Internet information services for an Operating Permit may be rejected (due to failure to meet the stipulated conditions, such as business plan, security measures to safeguard information and network), the non-operational type of Internet information services provider need only submit the required information (such as details of the operating unit, services provided by the website and approval from the relevant government department in charge of the relevant industry) for recordal purposes. Presumably, recordal does not involve a vigorous examination process and will not be refused.

Both the licensing system and recordal system are implemented by the Ministry of Information Industry ("MII") and the telecoms administration authority under MII at provincial, regional and municipal levels. Thus, the Internet Administration Procedures confirm that MII is also the government department under the State Council that is in charge of approving and regulating providers of Internet content (i.e., ICPs).

If the Internet information services to be provided involve news publication, publishing, education, medical treatment and health services, pharmaceuticals and medical equipment, then prior to making an application for an Operating Permit or complying with recordal requirements, the provider of this type of services must also obtain specific approval from the relevant government department in charge of the industry sector concerned.

Internet information service providers are required to post their Operating Permit numbers or record-filing numbers in a prominent place on the home pages of their websites.

The Release And Republication Of News Through The Internet

Shortly after the promulgation of the Internet Administration Procedures, the Press Office of the State Council (the "Press Office") and MII jointly issued the News Publication Provisions on 7th November 2000. The News Publication Provisions are issued to legally and explicitly confer on the Press Office the authority to control and supervise the publication of online news as well as those websites that engage in the business of publishing news online.

"News publication" is defined in the News Publication Provisions as the release and re-publication of news on the Internet.

Under the News Publication Provisions, only those Internet sites established by the central government news entities, news entities under the departments of the State authorities, or news entities directly subordinate to a province, autonomous region or centrally administered municipality, or to the municipality in which the people's government of a province or autonomous region is located (hereinafter collectively referred to as "State-owned news units"), are allowed to engage in news publication business. Other news entities are not allowed to establish their own news websites. However, with approval from the Press Office, they may still engage in news publication business on the news web pages that they have set up on the news websites operated by the State-owned news units. The establishment of news websites by State-owned news units must be approved by the Press Office at central government level, or by the local press office at provincial, regional or municipal level.

General-interest Internet sites which have been established by non-news entities (the "General-interest Non-news Websites") may, upon receiving approval from the Press Office, engage in the business of re-publishing news released by the State-owned news units. However, they are not allowed to publish news compiled by themselves or news taken from other sources.

The sponsor of a General-interest Non-news Website that wishes to engage in news re-publication business is required to submit an application to the local press office of the people's government of the province, autonomous region or centrally administered municipality where the sponsor of the website is located, for examination and approval.

The sponsor of a General-interest Non-news Website is also required to enter into an agreement with the State-owned news entities for the purpose of re-publishing news released by these State-owned news entities. Copies of the relevant agreements must be filed with the press office of the people's government of the province, autonomous region or centrally administered municipality where the sponsor of the website is located.

General-interest non-news websites are required to specify the source and date of the news re-published by them.

It is clear that the News Publication Provisions only allow State-owned news units to establish news websites, and only permit government approved news units to engage in the business of releasing and disseminating original news content online.

Furthermore, the linking of an Internet site to a news website outside the PRC and the publication of news released by foreign news media and Internet sites outside the PRC will require prior approval from the Press Office.

Websites which were already engaged in the business of news publication before the promulgation of the News Publication Provisions, are required to comply with the relevant formalities within 60 days from the date of implementation of the Provisions (i.e. before 6th January 2001).

Provision Of Electronic Messaging Services

ICPs are required to obtain an Operating Permit from, or carry out recordal formalities with, MII or its counterparts at provincial, regional or municipal level under the Internet Administration Procedures in order to provide Internet information services. Apart from fulfilling the basic requirements of the Internet Administration Procedures and those of the Telecoms Regulations for an operator of a value-added telecoms business, the EMS Provisions further require that a specific application be submitted by an ICP for engaging in the provision of electronic messaging services at the same time when it applies for an Operating Permit or when it carries out recordal formalities with the MII.

"Electronic Messaging Services" is defined in the EMS Provisions as those acts or applications which enable online users to publish information on the Internet in an interactive form, such as electronic bulletin boards, electronic whiteboards, electronic discussion forums, Internet chat rooms and message boards.

In order to engage in the business of providing electronic messaging services, a provider of such services is required to meet the following conditions:-

  1. offer definite types of electronic messaging services and have definite columns therefor;
  2. have comprehensive rules for electronic messaging services;
  3. have adopted measures to ensure the security of the electronic messaging services, including an online subscriber login program, an administration system for the security of online subscriber information and technical protection facilities; and
  4. have appropriate professional management and technical personnel who can manage the electronic messaging services effectively.

EMS providers are required to post their Operating Permit numbers or record filing numbers and their EMS rules in a prominent place on their EMS systems, and are further required to remind their online subscribers of the legal responsibilities and liabilities which must be assumed by them for the publication of information on the EMS system.

Prohibited Information

The Telecoms Regulations, the Internet Administration Procedures, the News Publication Provisions and the EMS Provisions contain identical rules which prohibit the following types of information to be produced, reproduced, disseminated, transmitted or broadcasted:-

  1. that which opposes the fundamental principles of the Constitution;
  2. that which harms State security, divulges State secrets, subverts State power or destroys national unity;
  3. that which harms the dignity and interests of the State;
  4. that which incites hatred or discrimination among nationalities or damages inter-ethnic unity;
  5. that which destroys religious policy of the State or spreads heretical teachings or feudal superstition;
  6. that which spreads rumours, disturbs social order or disrupts social stability;
  7. that which propagates obscenities, pornography, gambling, violence, murder, horrific acts or instigates criminal acts;
  8. that which insults or slanders another party, or infringes upon the lawful rights and interests of another party; or
  9. that which includes other content prohibited by laws or administrative regulations.

The original email legal update is copyright Johnson Stokes & Master at the date written first above. All rights reserved. This publication provides information and comments on legal issues and developments of interest to our clients and friends. The foregoing is intended to provide a general guide to the subject matter and is not intended to provide legal advice or a substitute for specific advice concerning individual situations. Readers should seek legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

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