Chinese Regulators Clamping Down On Internet Telephony -Report
December 30 2010 - 5:06PM
Dow Jones News
Chinese regulators are clamping down on Internet telephony that
isn't provided by one of the country's two state-owned
telecommunications companies, a move that could make services like
Skype SA unavailable in the world's most populous country,
according to a report in The People's Daily on Thursday.
The Ministry of Industry and Information Technology said
Voice-over-Internet Protocol, also known as VoIP, services are
illegal on the Chinese mainland unless they are provided by China
Telecom Corp. (CHA, 0728.HK) and China Unicom Ltd. (CHU, 0762.HK),
the paper reported. The state-run publication said the ministry had
not determined a timetable for implementing the ruling.
Wang Baodong, a spokesman for the Chinese Embassy in the U.S.,
said he was unaware of the development, but added that it sounded
consistent with the government's prior actions. "The Chinese
government regulates the Internet according to its laws and by
following international standards," Wang said.
The Chinese decision could become a roadblock for
Luxembourg-based Skype, which last week suffered a global service
disruption that lasted for roughly a day. The company is seeking
new users, especially business customers that pay to use premium
services, as it gears up for an initial public offering.
Chinese Internet users can currently use Skype via the company's
Chinese joint-venture partner Tom Online, said Kim Milosevich, a
Skype spokeswoman in London.
The Chinese government's decision comes after a year in which
tension mounted between the country's government and Internet
businesses hoping to offer products and services to its population
of 1.3 billion persons.
Earlier this year, Google Inc. (GOOG) sparked a standoff with
Beijing when it said it was no longer willing to comply with
China's self-censorship rules, a move that could have prompted the
Chinese government to eject the Internet search giant from the
country.
The standoff was diffused when Google routed some of its most
popular services such as its search engine, images, finance, videos
and maps through the company's Hong Kong site, which operates under
different laws.
Google also operates a quasi-Internet phone service, called
Google Voice. It is unclear whether that service will also be
impacted by China's decision.
Google representatives did not immediately respond to a request
for comment.
-By Ian Sherr, Dow Jones Newswires; 415-439-6455;
ian.sherr@dowjones.com
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