Administrative Measures on Internet Information Service ("Measures") was announced by State Council on 1st October 2000. The Measures comprise 27 articles, setting out the basic rules applicable to Internet information service providers within China.
The term "Internet content service" was used during the drafting process and up until the State Council approved the Measures, on 21st September 2000. It is not clear as to why it was replaced by "Internet information service" in the final version. Our understanding is that the original legislative intention of the Measures was to regulate ICPs, although it is unclear at this stage how, if at all, "information service" differs from "content service".
Article 1 sets out the purpose of the Measures, i.e. to regulate Internet information service (IIS) activities and promote its healthy and orderly development.
Article 2 defines the applicability of the Measures. It applies to all IIS activities within China.
Article 3 divides IIS activities into two categories: profitable – charged Internet information services and non-profitable - free Internet information services.
Article 4 sets out the basic administrative systems for each category. A licensing system is put in place for profitable IIS and a filing system for non-profitable IIS. Without approval or filing, as the case may require, no IIS could be provided.
Article 5 imposes additional approval requirements for when special industries are involved. Where information provided concerns news, publication, education, medical and health, medicine and medical appliances, or other areas which require the approval of the authority in charge of the relevant area by laws or regulations. Such approval must be sought first before IIS licensing or filing application could be made.
Article 6 states the qualification requirements for IIS providers. The relevant provisions in the Telecommunication Act (the "Act") (issued by the State Council on the same date) are incorporated. The Act lists IIS as added value telecommunication service. In order to undertake added value telecommunication service a provider must satisfy the following four conditions: be legally incorporated; possess funds and technical staff commensurate with its business activities; have the credential or capacity to provide long term services; and other conditions provided by the State. On top of these, Article 6 adds an additional three requirements: have a business development plan and related technological plan; have complete network and information safety security system, including security measures for website safety, system for information secrecy and system for client information confidentiality; and where special area provided in Article 5 is involved, authority approval must have been obtained.
Article 7 sets out the licensing procedures for profitable IIS. An application needs to be made to the Ministry of Information Industry (MII), under State Council or the provincial level authorities in charge of telecommunication ("Approval Authority"). Approval Authority will make a decision within 60 days of receiving the application. Upon approval an Operation Permit will be issued, and the applicant may then proceed to register with enterprise registration authority (State Administration for Industry and Commerce (SAIC) and its various branches).
Article 8 sets out filing procedures for non-profitable IIS.
Article 9 requires BBS providers to go through special licensing or filing procedures for such service.
Article 10 Approval Authority publish names of providers that have been licensed or filed to provide IIS.
Article 11 requires IIS providers provide services within the scope licensed or filed. Non-profitable IIS provider cannot provide chargeable services.
Article 12 requires IIS providers to display their license or filing number in prominent position on its homepage.
Article 13 requires that IIS providers shall provide quality services and ensure that information provided is legal.
Article 14 imposes special requirements on providers of news, publications, BBS, etc. to keep records of information provided including time of provision and IP address or domain name at which information was provided. Internet Access Providers (IAPs) are also required to keep records of viewers' visiting time, account, IP address or domain name, major telephone number, etc. Copies of such records shall be kept for 60 days and be made available to authorities for examination when so required.
Article 15 lists nine categories of information prohibited from being produced, copied, published or transmitted by IIS providers. This includes information which contravenes the fundamental constitutional principles; threatens state security, discloses state secrets, upsets state authority or harms state unity; damages state reputation or interests; promotes hatred or discriminates between ethnic groups or harms ethnic solidarity; violates state religious policies and propagandas cults or feudal superstition; spreads rumors, disturbs social orders or upsets social stability; concerns pornography, gambling, violence, murder, scary or abetting crimes; insults or slanders others or infringes their legitimate rights; or other contents that are prohibited by laws or administrative regulations.
Article 17 addresses the use of foreign funds by IIS providers. It is required that the overseas listing or setting up equity joint venture or cooperative joint venture with foreign investors of such providers shall obtain MII's prior approval, and the ratio of stakes foreign investors are allowed to take in such joint ventures shall be in compliance with the provisions of relevant laws or administrative regulations.
Article 18 specifies the relevant supervisory and administrative authorities, which include MII, provincial level authorities in charge of telecommunications, authorities in charge of news, publication, education, health, medicines, industry and commerce, public security, etc.
Articles 19 to 25 states the penalties for violation of the above provisions.
Article 26 requires those IIS providers who commenced business before the 1st October 2000, to adopt the procedures as set out in the Measures, within 60 days of the announcement date.
Article 27 provides that the effective date of the Measures is the same as the announcement date, i.e. 1st October 2000.
There are three things noteworthy about these Measures:
- To the disappointment of many, foreign investors in particular, the Measures fail to clarify the specific role foreign investors can play in this field. It has been reported that China is to amend its Foreign Investment Industry Guiding Catalogue (1997). It has even been suggested that a special legislation will be drawn up to address foreign investment in the telecommunication area, which includes Internet businesses.
- The Measures impose record keeping burdens on IIS providers to assist authority's supervision over activities on the Internet (see Article 14), failing which may attract penalties ranging from correction order to shut down of the wet site. It is unclear how this could be fulfilled by IIS providers.
- The Measures make a distinction between "profitable" and "non-profitable" services by deciding whether approval or the much relaxed filing requirements should be applied. It is unclear where the line is to be drawn, for instance, which category the famous portals such as sina.com, sohu.com, etc. fall into.
In addition, most articles of the Measures are quite sketchy and not directly workable. It is most likely that these Measures will be used as a prelude for a series of more detailed regulations, necessary for the carrying out of the Measures.
