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China Unleashes New Net Regulations
The Chinese government Monday released sweeping new regulations that would limit foreign ownership of Internet companies as well as impose content requirements for Web sites.
The "Management Methods on Internet Content and Service Provision" were reported by Xinhua News Agency Monday, though the regulations passed more than two weeks ago. The regulations are part of a comprehensive legal framework that outlines the government's interest in the Internet industry in China. Under agreement between China and the United States in World Trade Organization talks last November, foreign investment in Internet companies would be capped at 50 percent.
The new regulations also will force Internet content providers to garner the approval of the Ministry of Information for joint ventures and agreements involving foreign investors. It also would require the ministry and China's security agency to approve listings on any on foreign stock exchanges.
Beijing also intends to keep an eye on content. Under the new rules, content and service providers that offer news and information on education, health care, pharmaceutical products and medical information must gain the approval of certain regulatory departments. The regulation essentially extends oversight of content from the Information and Telecommunications ministries to government agencies relevant to the content. In addition, the Financial Times reports that Internet content and service providers must keep records of all the content that appears on their Web sites and all the users who dial into their servers for 60 days, and hand over requested records to the police.
"We are talking about people trained in a central command economy," explains John Foarde, vice president of the U.S.-China Business Council. "They don’t quite understand how this all works. At the same time, you have a conflict in the background between people who are pro-regulation and nationalistic and fear foreign investment and people who basically don’t care about that and know China needs it to go to the next stage of economic development."
China's new rules also prohibit content providers from producing, copying, publicizing or disseminating state classified information or information that could threaten national security. And forms of content that can be classified as racist or socially unstable such as obscenity, pornography, gambling, violence and terrorism also are banned.
"I think basically it should have little negative effect to the Internet market in China. I think they only want to regulate some business that is that is illegal according the to the current Chinese regulation or law," said Stan Zhang, co-founder of Civilink, a Chinese Web hosting company. "I think Chinese government only wants to …regulate some activities of the Internet users."
Though the regulations might incite palpitations in the heart of any Internet service provider or dot-com, they could be altered once public reaction is gauged.
"The trend in China has been to announce sweeping regulations or laws governing all kinds of things …Waiting for people to push and eventually coming out with things that are much more reasonable and much more practical," said Foarde. "This is not a real departure of the way they have done things in the past. Once they see how everyone reacts, they'll either finalize (the regulations), or change them and moderate them."
Ireland Launches Revenue Online Service
In keeping with its pledge to be the Silicon Glen, Ireland's Office of Revenue Commission has unveiled its Revenue Online Service (ROS), which will enable companies to file forms related to the value added tax (VAT) and other taxes.
The ROS project was announced in January 1999 and retained Andersen Consulting to build the infrastructure for the system. ROS enables businesses to file, and pay online, as well as consult a customer information service, including detailed taxpayer history files.
"The tax payers will have their own personal Web site. As a first step, it's fairly powerful, " said Sean Shine, a managing partner and head for revenue industry for Andersen Consulting. "This will really become a place where tax payers will interact with the agency. They feel this is the right way to go."
Shine explained that the project required instituting a number of specific security measures in order to protect the data. "From a technical perspective, we've trying to put all the appropriate cautionary controls in place," he notes.
In addition to the all of the necessary digital encryption, Andersen separated all of the project's servers from each other as well as the live data system in the Revenue Commission's offices.
The first phase was launched this month and the second phase is targeted for launch in April 2001. "The second phase will be for more business taxes — income and corporate. Consumers will be in the third or fourth phase," Shine said.
Internet Domain Names
Network Solutions Inc. (NSI) is now offering domain names in multiple languages, staving off fears that the all-English Web would extinguish a country's culture. Essentially, any English language domain name will now be available in the characters of foreign languages. NSI plans to roll out this service in late October when it will offer two varieties of Chinese, Japanese and Korean languages. The new endeavor likely will compel many companies to register their names in every available language NSI officials said. It is a process that can become costly when one considers that each separate language requires a different domain name.
The new multilingual feature also will spark opportunities for cybersquatting. NSI Senior Vice President Doug Wolford explained at a press conference on Tuesday. NSI is cooperating with the World Intellectual Property Organization, which now arbitrates domain name disputes, Wolford said.
Though the actual domain address will be available in foreign language characters, there are no plans to convert .com, .org and .net into multiple languages, Wolford said, because those top-level domains are controlled by the Internet Corporation for Assigned Names and Numbers (ICANN).
Australia Defines Streaming
Australia's Ministry for Communications, Information Technology and the Arts announced last week that Internet audio and video streaming will not qualify as "broadcasting services" under that country's 1992 Broadcasting Services Act. Though the ministry issued the same decision in July, a formal review of the law was necessary to clear up any remaining legal questions. Under the determination, Internet video and audio streaming will not be subject to the regulations of normal television and radio broadcasting, including the requirement of a broadcasting license — a regulation that critics asserted would stifle the growth of multimedia services in Australia.
The decision "is significant because it exempts services that make available audio and video services using the Internet, other than delivery using the broadcasting services bands," said Australia's Internet Industry Association President Peter Coroneos in a statement last Thursday. "This move will secure the future of streaming and the Internet, including wireless delivery of Internet content."
UN Revisits Competition Policy
The United Nations Conference on Trade and Development released its annual report on World Investment, with a particular focus on the growth of cross-border merges and acquisitions.
The World Investment Report 2000 highlights the rise of foreign direct investment and the boom in global consolidation among corporations. The report notes that the factors pushing the growth of the global mergers and acquisitions are a search for new markets, access to proprietary assets, desire for greater size, diversification, financial motivations and personal behavior as motivation. It also found that a crucial factor in the equation is the role of government policy.
UNCTAD concluded its fourth conference review of the United Nation's 1980 competition code in Geneva last week, a topic highlighted by the recent attention on megamergers like America Online's proposed acquisition of Time Warner, as well as the increasingly visible role of European Commission in U.S. company mergers.
Internet of Social Change?
A group of major universities announced last week that its members would conduct research on the global impact of the Internet in political economies. The Internet Political Economy Forum, a consortium that includes University of Washington, University of Cambridge, and the National University of Singapore, will look at the social, political and economic implication of the Internet. Professor James Mayall, director of the Center of International Studies at the University of Cambridge, stressed that the "Internet represents a radical transformation of mankind's communications environment that has the potential to reconfigure many aspects of political, economic, and social life," he said in a statement. The results of the study will be presented at the next annual IPEF conference at the National University of Singapore in September of 2001 on the topic of the Internet and development in Asia.
- by Maureen Sirhal
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