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Since the Provisions on the Administration of Foreign Investment in Telecommunications Services (Order No. 333 of the State Council, hereinafter referred to as the Provisions), most of the foreign investors have, in strict accordance with the requirements of the Provisions, gone through the formalities for examination and approval of establishment of foreign-funded telecommunications enterprises as well as the examination and approval of licenses for telecommunications services and entered into the Chinese telecommunications service market to carry out the value-added telecommunications services according to law. Yet recently, some foreign investors, by means of delegation of domain names as well as authorization of registered trademarks, conspire with the domestic value-added telecommunications companies to evade the requirements of the Provisions and engage in illegal value-added telecommunications services. In order to further intensify the relevant administration of foreign investment in the value-added telecommunications services and safeguard a fair market environment, we hereby notify the relevant issues as follows: I. Where a foreign investor makes investment in the telecommunications services within the Chinese territory, it shall, in strict accordance with the requirements of the Provisions, apply for the establishment of a foreign-funded telecommunications enterprise as well as a license for telecommunications business. In the absence of going through the aforesaid procedures according to law, a foreign investor shall not make any investment in the telecommunications business in China. A domestic telecommunications enterprise shall not lease, transfer or sell for profits any license for telecommunications business by any means or in any disguised form, or provide such conditions as resources, places and facilities for any foreign investor to engage in any illegal telecommunications operation in any form within the territory of China. Where a domestic telecommunications enterprise goes listed abroad, it shall be subject to the examination and approval of the administrative department of information industry of the State Council and obtain the approval according to the relevant state provisions. II. The administrative bureau of telecommunications of a province, autonomous region or municipality directly under the State Council shall intensify the administration of value-added telecommunications services and regulate the cooperation between foreign investors and domestic value-added telecommunications companies in their administration of market access and normalization according to the following requirements: (1) As to the domain name of the Internet: According to the provisions of item (3), Article 13 of the Regulation of the People¡¯s Republic of China on Telecommunications, a business operator of telecommunications services shall have the capacity or creditworthiness of providing long-term services to its clients. As the domain name of the Internet is an important resource in carrying out the relevant business operation of value-added telecommunications services, as well as a persuasive indicator of the capacity or creditworthiness of providing long-term services to its clients, the domain name of the Internet shall be legally held by a business operator of value-add telecommunications services (including any shareholder thereof). (2) As to the registered trademark: According to the provisions of item (3), Article 13 of the Regulation of the People's Republic of China on Telecommunications, a business operator of value-added telecommunications services shall have the capacity or creditworthiness of providing long-term services for its clients. As the registered trade-mark is an important intangible asset to carry out the business operation of telecommunications services, as well as a persuasive indicator of providing long-term services to its clients, therefore, the trademark as employed by the business operator of value-added telecommunications services shall be legally held by the business operator itself (any shareholder thereof). (3) As to the setup of such facilities as places and servers: Item (3), Article 6 of the Measures for the Administration of the Business License for Telecommunications Services prescribes: An entity that applies for the business operation of value-added telecommunications services shall have the places and facilities as necessary. The places and facilities as prescribed by the aforesaid provisions shall be installed within the coverage scope as prescribed by the Business License and be corresponding to the value-added telecommunications business that the operator has been approved to run. (4) As to the measures for safety guaranty of network information: A business operator of value-added telecommunications services shall, according to the Basic Requirements for Safety Guaranty of Network Information of Value-added Telecommunications Business(YDN126-2005), improve the relevant measures for guaranteeing the safety of network and information, formulate the relevant administrative system of information safety, establish the procedures for handling emergencies of network and information safety and specify the liabilities of information safety. III. In the daily work of examination and approval of the business license for value-added telecommunications business, the administrative bureau of telecommunications of a province, autonomous region or municipality directly under the Central Government shall further intensify the examination on the setup of such facilities as domain names, registered trademarks and servers as well as such materials regarding commitment on the guaranty of information safety, and shall not grant any approval to any entity that fails to meet the aforesaid requirements. IV. As to a company that has obtained a business license for value-added telecommunications services, the administrative bureau of communications of a province, autonomous region or municipality directly under the Central Government shall organize it to conduct self-examination and self-correction according to the aforesaid requirements and conduct the supervision and examination on the results of self-examination and self-correction as reported by the business operators of value-added telecommunications services. As to the spotlighted companies to which the consumers' attention is attached, focused examination shall be conducted thereon. Where any business operator fails to satisfy the relevant requirements, it shall be ordered to correct within a time limit. Where any entity fails to correct within the time limit, its business license for telecommunications services may be revoked according to law. Where any problem arises in the relevant work, please contact this Ministry in a timely manner and the result of supervision and examination shall be reported to this Ministry before November 1, 2006. Contact department: the Administrative Bureau of Telecommunications under the Ministry of Information Industry Contact Telephone (Fax): 66012301 Email: shcc@mii.gov.cn |
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