Chinese authorities have clarified the new regulations for online audio and video services originally announced at the end of December 2007.
The original announcement by China's State Administration of Radio, Film and Television (SARFT) and the Ministry of Information Industry stated that all online audio and video service providers would need to apply for an "online audio-visual broadcasting licence", and only state-owned or state-controlled Chinese companies would be eligible to receive such a licence.
According to Marbridge Consulting, SARFT has now indicated that companies that are already legally offering online services and permissible content will be allowed to re-register and continue providing services. New entrants to the arena will be subject to the regulations, while those that are found to run foul of the law will be punished or severely regulated.
Rajesh Sreenivasan, a partner at law firm Rajah & Tann, told ZDNet Asia that the new set of regulations is not so much a prohibition of existing players but a form of control mechanism to keep investments within the economy.
The new rules, noted Sreenivasan in a phone interview, are also consistent with China's level of control over the media. "Businesses want certainty; China has never made it a secret that they want a high level of control over the internet," he said.
The recent clarification by the Chinese government, added Sreenivasan, is a signal that the authorities do not want to put in jeopardy the investments that existing businesses have made.
Associate professor Ang Peng Hwa, dean of the Wee Kim Wee School of Communication and Information at Singapore's Nanyang Technological University, pointed out that the Chinese authorities are regulating the internet not so much because they are "afraid" but because they "want to own that space as much as possible".
"Chinese regulation is strategic… They do want to dominate the internet in a way that is consonant with their economic rise," Ang explained in an email. "China wants to flex its muscle in as many arenas as possible."
According to Ang, the tight regulation could be temporal. With the Beijing 2008 Olympics taking place in August, it is only natural to expect the Chinese to want to keep their dirty linen out of public eye and "project a good front to the world", he said. The rules "may be loosened after the Olympics", he added.
Rajah & Tann's Sreenivasan, however, does not expect the rules to change.
"What China is trying to do is have the same set of rules for the online world as they do with traditional media," Sreenivasan said, adding that the move to regulate online audio and video content is "recognition and a pat on the back" for the internet in China for being able to have as much impact in shaping people's opinions as traditional media.
Business users unfazed
Companies such as Sun are still digesting the new guidelines to see if they will be affected. No stranger to using online videos as a mode to reach out to its users and potential customers, Sun in 2006 announced a contest to encourage rank-and-file employees to produce videos promoting the company's products on YouTube.
YouTube is technically not affected by the regulation, as it operates from servers outside of China, but Sun did not say if it has any links with China-based video-sharing sites.
Paul Li, Sun's marketing director for the Greater China region, told ZDNet Asia that the company "is currently studying the new regulation". He said in an email that the company, which has operated in the Chinese market for 20 years, will continue to comply with local regulations.
Lenovo, on the other hand, does not expect the regulations "to have much of an impact", according to a spokesperson.