China's move to ban Skype rattles consumers (News Feature)

By Andreas Landwehr Dec 31, 2010, 10:09 GMT

Beijing - Beijing has declared war on unlicensed online telephone service providers, including Skype, but blocking the popular programmes will be a challenge even for the communist country's Great Firewall.

'[The] Chinese regulator has declared internet phone services other than those provided by China Telecom and China Unicom as illegal,' the state-run People's Daily said Thursday.

The announcement that only the two state-owned companies would be licensed has caused consternation and outrage among China's 450 million web users, the world's largest internet community.

The move was 'expected to make services like Skype unavailable in the country,' the paper added.

Users and experts have expressed fear that outlawing Skype, the world's leading free VoIP - voice over internet protocol - software, could trigger a hike in rates by the remaining providers.

Skype Technologies SA joined the fray on Friday by announcing a new program to make video calls from Apple Inc's iPhone.

It was not clear what the implications of the new restrictions on such video call programs would be, and the press release of the Ministry for Industry and Information Technology did not provide details of any upcoming measures or their timeframe.

Observers said the move was driven by economic and political motives.

Chinese state media reported that the authorities were seeking to protect the duopoly of state-owned China Telecom Corp and China Unicom Ltd.

The two companies, who hold the only licences for online telecommunications, are still experimenting with such services, but aim to offer them across the country in the future.

Skype has untold millions of users in China, where its encryption has also made it popular with those keen to keep their communications hidden from state security snooping.

The Luxembourg-based company operates in China as a joint venture with Hong Kong-based TOM Online, which in turns cooperates with China Unicom for its mainland services.

Unicom is also the only licensed provider of iPhones and GSM services in China.

The Chinese version of Skype, developed in collaboration with TOM and available since 2007, has come under repeated criticism for security flaws.

Skype has declared publicly that it is simply complying with Chinese law and its strict censorship conditions, but users have reported mysterious service interruptions when discussing sensitive issues using the Chinese-language Skype.

Foreign experts have questioned whether the developers might have been cooperating with the authorities, perhaps going so far as to include a so-called back door, allowing the authorities some level of control over the software.

Such control could give Beijing the capacity to shut down the Chinese version of Skype altogether.

But to date, anyone able to read English has been able to avoid concerns over the software's integrity by downloading other versions of Skype from servers outside China.

Under the new regulations, the authorities could also block access to the download sites abroad.

Such blocks can be circumnavigated, but only by those with the technological knowledge or the means to pay someone to to it.

Some experts say that the government's latest statement could be little more than a shot across Skype's bows, warning the company not to push its internet services much further in the country.

Skype has already been operating in a grey area, however, as strictly speaking, all telephonic services are limited to state-licensed operators.

But there are fears that the recent hardening of the authorities' tone could herald legal action against Skype and other similar service providers.

The move has drawn outspoken criticism, despite the censors.

'It's ridiculous,' said Kan Kaili, a professor at Beijing University of Posts and Telecommunications. 'VoIP is a popular technology worldwide,' he wrote in Thursday's edition of the People's Daily.

Information technology expert Fang Xingdown said clamping down on Skype and others would not be in the best interests of technology development.

'It's not fair to VoIP users,' he said. 'The ministry should promote communication technology, not hinder its development.'

Lu Benfu of the Internet Research Centre at the Chinese Science Academy said, 'these new policies will encourage the state telecommunications companies to manipulate the VoIP sector.'

'These giant companies are not happy with the private VoIP service providers, which tend to be cheaper and offer a better a service,' he said.

Read more about China Technology

Read more about Society