Examining revisions to Catalogue of Telecom Services by Category

The Catalogue of Telecommunication Services by Category is a piece of legislation that complements the Telecommunication Regulations and exists separately in the form of an appendix. Since its issuance and implementation as an appendix to the Telecommunication Regulations in September 2000, the first edition of the catalogue was subsequently revised in 2001, and again in 2003 by the former Ministry of Information Industry. In December 2015, the Ministry of Industry and Information Technology (MIIT) revised the catalogue for the third time, the most substantive of all the revisions.

Twelve years elapsed between the previous and the most current revision, a period that witnessed earth-shaking change in China’s telecoms industry, with a continuous stream of internet and mobile internet platforms appearing. However, the relationship between the various innovative services and the catalogue and Telecommunication Regulations has always been a mess. From the revised content it can be seen that the MIIT has greatly expanded the scope of administration of the catalogue, with some formerly grey areas brought under its oversight.

Q: Now that the catalogue has greatly expanded the scope of “information services”, will the internet content provider (ICP) permit formally stride off the historical stage?

A: In the 2003 edition of the catalogue, “information services” were divided based on the basic communication networks by way of which the information was transmitted, i.e. into “fixed network, mobile network and internet”. The permits corresponding to each were entitled fixed network permits, service provider (SP) permits and ICP permits. Given that the threshold for obtaining an ICP permit is so low, it became the telecom service operating permit most applied for. In comparison, almost no one operates the voice telephone services to which fixed network permits correspond, and although the situation of the short message services to which SP permits correspond is somewhat better, operators have also experienced a decline.

Based on specific forms of internet services, the revised catalogue creates five new sub-categories of services under “information services”: information dissemination platform and delivery services; information search and query services; information community platform services (including the various types of social network services); instant information interaction services (including instant messaging [IM] and instant voice recognition [IVR] services); and information protection and processing services. With this new method of categorization, the ICP permit that has been in use for 16 years will gradually disappear and various new service permits will take its place, particularly such innovative services as social network services, IM, etc., which have vastly expanded the legal implication of “information services”.

It should be noted that there are varying opinions in legal circles as to whether various types of mobile app products fall within the category of “information services”. However, with the revised catalogue, apps will not be able to escape regulation.

Q: In addition to the expansion of the scope of information services, what other content of the catalogue has undergone revision?

A: The most significant revisions to the catalogue are the addition of content distribution network (CDN) services and internet resource collaboration services.

Pursuant to the catalogue definition, “CDN service” means a service where a traffic distribution and management network platform consisting of a nodal server cluster distributed in different areas is utilized to provide to users distributed storage and high-speed caching of content, and to deliver the content to rapid and stable cache servers based on the network’s dynamic traffic and load, enhancing the speed of access to the user’s content and the availability of its services.

CDN services are part of the low-level infrastructure for a variety of internet applications, particularly video services, and a core basic service of the internet. The CDN industry in China is presenting tremendous variety, with a new generation of CDN service providers that have peer-to-peer (P2P) technology as their main feature already putting in an appearance and making a serious dent in the market share of traditional CDN giants. The internet giants are also establishing CDN services, resulting in a rapid increase in CDN service providers. The catalogue formally brings CDN services within its oversight, and lists it as a specific standalone service, reflecting the importance that MIIT places on this service.

Pursuant to the definition in the cata­logue, “internet resource collaboration services” are a sub-category of services under internet data centre (IDC) services. The term means the utilization of equipment and resources set up in a data centre to provide such services as data storage, internet application development environment, internet application deployment and operation management, etc., to users through the internet or other network by way of access at any time, use as required, expansion at any time, collaborative sharing, etc.

With the recent rise of the cloud computing industry, software as a service (SaaS) providers have been the targets of venture capital in the past two years. Given the tremendous number of such enterprises, MIIT’s regulatory attitude has been to bring the cloud computing services riding on IDC within the scope of its oversight. Industry experts opine that platform as a service (PaaS) is fully covered by this definition, but consideration is needed to determine whether SaaS and infrastructure as a service (IaaS) are also covered.

Based on the author’s understanding of the SaaS industry, given that a cloud computing product has to be responsible to several thousand, or even several tens of thousands, of enterprises, the operating enterprises must adopt more secure methods, such as cloud storage, cloud backup, etc. Once an enterprise reaches a certain size, it should put its data on IDC. Accordingly, the entire cloud computing industry has been brought within the scope of the catalogue.

Q: Are internet enterprises with an ICP permit required to apply for a new permit?

A: ICP permits are valid for five years, and the number of holders out there is huge. Most ICP permits held by enterprises since the catalogue’s implementation on 1 March this year have not expired, and will be able to continue operations until their expiry dates. Of course, opting to apply for new permits and cancelling existing ICP permits would be another workable approach.