Laws of the People's Republic of China

STATE COUNCIL DIRECTIVE ON STRENGTHENING REGULATIONS IN THE MANAGEMENT OF THE TELECOMMINCATIONS SECTOR

(The State Council's formal Notice on Reinforcing Regulations of the Telecommunications
Sector on August 3, 1993 to all provinces, autonomous regions and municipalities directly under
the jurisdictions of the central government)

SUBJECT: TAXATION

ISSUING-DEPT: STATE COUNCIL OF CHINA

ISSUE-DATE: 08/03/1993

IMPLEMENT-DATE: 08/03/1993

LENGTH: 1684 words

TEXT:

In the notice, the SC agrees with the proposal of the Ministry of Post and Telecommunications (MPT) and requires all involved work units to follow the stipulations of the notice, which explicitly outlines the following telecom services as open to the public:

1. Wireless electronic pagin
2. 800mhz grouped telephone service
3. 450mhz wireless electronic mobile telecom service
4. Domestic VSAT (very small aperture terminal) telecom service
5. Telephone information service
6. Computer information service
7. Electronic mailbox service
8. Electronic data exchange servic
9. Electronic imagin
10. Other assorted telecom services approved by the SC or the MPT.

To maintain order in China’s telecom industry, to safeguard telecom safety and quality and to create a competitive environment, regulations of the increasingly open telecom market must be strengthened. Six specific ordinances are outlined:

1. Enterprises that provide services to the public must report to a higher body and obtain business permits. Firms that are limited to their own regions must report to their local bureau of postal and telecom regulations, which is responsible for conducting inspections and issuing certifications that is prerequisite to the receipt of a business permit. These enterprises should also be filed at the MPT. Inter-regional firms should report to the MPT and should undergo similar procedures in order to obtain permits. Without official inspection and approval, no organization or individual should be allowed to provide any of the aforementioned services. Specific details regarding the implementation of this rule were established and issued by the MPT. Firms that have provided telecom services must retroactively undergo the authorization process
   
   
2. Firms that are registered for the operation of wireless services must first have certification from and approval of the MPT and the local bureaus of postal and telecom regulations. After approval is secured, the firms must bring their permits to the wireless regulatory branch in order to obtain an approved frequency
   
   
3. Organizations permitted to operate telecom services cannot regionally seal off the market. They must adhere to all related telecom policies and laws, accept regulations and inspections from government regulatory branches, guarantee service quality and strictly carry out policies and standards for fee-charging, taxation and consumer rights. Interfering with the normal operations of other specialized telecom networks is forbidden
   
   
4. Government agencies should create a fair, competitive environment for the postal and telecom industries. These industries, in turn, which should act according to the "win-win" principle, and complement and benefit each other. These industries should be provided with the necessary equipment and circuits in order to ensure high quality service to the public
   
   
5. Foreign businesses are not permitted to operate in or even partially participate in the operations of telecom services. Foreign organizations, businesses, and individuals, as well as foreign-invested and partnered enterprises, already established in China are not allowed to solely or cooperatively operate in any of China's telecom services, nor can they be solicited to become stock-holders and partners by Chinese enterprises in any way.
   
   
6. Pursuant to the aforementioned regulations, the MPT and postal and telecom regulatory bureaus must perform regular inspections. Violators of any regulations will be penalized first with warnings, then circulated notices of criticism, then issued orders to terminate their operations, then confiscation of illegal earnings, and, if necessary, administrative fines or revocation of business permits. Regulatory branches cannot use their permit-granting powers to make illegal gains or to bypass rules or regulations. Those that attempt to do so will be prosecuted