China on prowl for illegal Websites

Shanghai cracks down on 100 unregistered Web sites

By Kristie Lu Stout
CNN.com Writer

HONG KONG, China (CNN) -- Communications authorities in Shanghai have launched a month-long crackdown on unauthorized Web sites based in the city.

Enforcing China's strict Net regulations issued last October, all Internet Content Providers (ICPs) must register for licenses from the telecoms bureau and Ministry of Information Industry.

The Shanghai Daily reports that 100 unregistered Internet companies will be targets of the crackdown.

According to the October Internet rules, Web sites were given 60 days to apply for licenses.

Industry insiders say Shanghai is leading the pack to enforce the October regulations.

"Shanghai has always been the most restrictive environment in terms of content in China," says Duncan Clark, partner of Beijing-based technology consultancy BDA.

Shanghai's dominant Internet service provider, Shanghai Online, charges additional fees to Web sites that attract more users. Analysts say the surcharge is the provider's attempt to bolster its own content service.

"Shanghai should not be the model for China since it's the most restrictive, especially from an economic standpoint. They want ownership," says Clark.

"Shanghai is strong on infrastructure side with efforts in ADSL, cable, etc. But it is a basketcase on the content side."

The regulations also stipulate that Internet content providers need Ministry of Information Industry approval to list and set up joint ventures with foreign firms, cap all foreign investment at 50 percent, and report all postings of "subversive content."

The October regulations, like previous announcements, say that Web sites are not allowed to publish information that "harms the state religious policy, propagandizes evil religions or feudal superstition," "threatens national security," or "spreads false rumor, pornography, gambling, and violence."

According to the Internet Information Services Management Regulations approved by the State Council, fines for Web sites that fail to comply may be three to five times illegal earnings or, if there are no illegal earnings, the equivalent of between $12,000 and $120,000.

Since the release of the October regulations, NASDAQ listed portals Netease, Sina.com and Sohu.com have announced their ICP approval.

The China Internet Network Information Center, a state-sponsored Web monitor, estimates that there are 22.5 million Internet surfers in China as of January 2001.

Hong Kong-based Iamasia reports that there are 15.2 million Internet users in Mainland China as of December 2000.

China builds a Great Fire Wall
January 12, 2001
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January 18, 2001

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