Chinese Influence Regarding Telecommunications - Essay Example

? Managing Capability: MENA Telecom Word Count: 3,329 Aims & Objectives The aim and objective d herein is that MENA Telecom is a Bahrain telecommunications company that was founded in the Internet age. As such, with its variety of various services offered—including residential, business, online services, and support—MENA Telecom is fast becoming an entity to be contended with in the Bahrain’s telecommunication industry. Having partnered with Motorola technologies, MENA Telecom effectively is hoping to dominate the telecommunications market with a focus on customer support, reliable service, and affordable rates, and has developed a significant relationship with China, China having started several banks in Bahrain beginning in 2004. China’s involvement with Bahrain is intriguing, especially because China sees companies such as MENA Telecom as key to a burgeoning market in the Middle East. This Chinese influence regarding telecommunications will be discussed here. Introduction Gutenberg’s invention of the printing press has caused vast changes in information sharing especially during the age of industrialization. Just as the printing press changed the way books, and thus knowledge, were disseminated, the Internet has also had a large impact on the way people communicate in this age. The youngest among the different forms of media present in this time, the Internet has rapidly evolved into one of the most popular media that has changed the way people all over the world share information. In a research by Anmuth et. al for the Lehman Brothers Internet Data Book (2008)1, the Internet ranked second with radio among the most utilized media, both garnering 19% behind television’s 33% consumption share. Although it is a far second from television in consumer share, it has penetrated all major countries in terms of usage: Australia ranks first with 71.9% followed closely by the United States with 69.7% internet penetration, followed closely by Canada with 67.8%, Japan with 67.1% and South Korea with 66.5%. These numbers show that the Internet is taking a foothold as being one of the fastest developing and most influential medium in the world. Aside from connecting the whole world, the Internet has also opened up new possibilities for human interaction. Wave 3 (2008)2, a global study by Universal McCann on the Internet as a social medium, identified the most popular activities that Internet users do when they log online. These activities range from watching and uploading videos online, reading and updating blogs and maintaining accounts on social networking sites. These activities changed media users from mere passive audiences, to producers of information. Thus, it is safe to assume that the Internet and other forms of electronically-mediated communications are a staple of everyday life.3 However, one of the biggest untapped markets for the development of the Internet is China. Studies reveal that there have been a rapid growth in Internet user in the People's Republic. From 670,000 Internet users in 19974, Chinese citizens who logged onto the Internet increased to 2.1 Million in just two years.5 A decade ago, a report by the China Internet Network Information Center (CNNIC) revealed the Internet statistics of the country: 8.92 million computers that can access the Internet used by 22 million users.6 The report also identified 265, 405 sites and domains with Internet suffixes such as .org, .cn or .com.7 Internet-based businesses have turned their efforts towards penetrating the vast Chinese market. In 2000, China generated U.S. $9.32 billion in E-commerce revenue with U.S. $9.27 billion of this coming from business to business transaction and the remaining U.S. $47.1million from everyday Internet consumers.8 And with China's Internet population reaching 384 million by the end of 2009 and increasing to 420 million9 by the middle of 2010, these numbers reinforce analysts' claim that China is the next lucrative Internet and mobile market in the world, surpassing even both Europe and the United States. Despite these prospects, this rich market possibility has not been as maximized by Internet based companies as they want to. This is due to the stringent government policies that the People's Republic of China has adopted to regulate the flow of information in the worldwide web. As early as 1996, China's State Council had already legislated policies that outlined Preliminary Regulations on Computer Information Network and Internet Management (amended on May 20, 1997) and created the State Information Leading Group (SILG).10 The SILG, which is tasked to regulate and decide upon issues regarding the Internet, established the Implementing Rules of the Preliminary Regulations on Computer Information Network and Internet Management. Fort and Junhai11 summarized the guidelines set by the two regulations for the use of the Internet in the People's Republic of China: All computer information networks must use the international information port of entry and exit provided by the State Public Telecommunication Network, and no entities or individuals may have access by to Internet by any other means Any Internet users, whether individuals, corporations or other entities, can have access to the Internet via this access network If a corporation wants to provide Internet access service, it must satisfy statutory conditions and approval from government agencies Internet users must file a user registration form together with identification documents when they apply for Internet access service IP addresses and domain names will be assigned by the the China Internet Network Information Center , which is also tasked to manage the index of Internet resources These two regulations are just some of the numerous legislations enacted by the Chinese government in order to supervise the use of the world wide web. Although operating under the idea of a harmonious and peaceful society, these policies have raised the criticism of both social and business groups as hindering both individual rights and business opportunities. Despite these protests, the Chinese government has refused to back-down or even relax their policies regarding Internet use. Part I & 2 (Resource-Based View) In the past decades, economic reforms have swept through China, transforming a former hermit-like communist country into one of the most potentially powerful economic powers in the world. These reforms have impacted the lives of many citizens, changing ideals and opportunities with sweeping, thorough, systematic and yet improvised government policies.12 These changes both have had positive and negative effects on Chinese society. One of its positive effects is that it opened the Chinese market to the world, with global businesses vying to tap into their vast natural and labor resources. However, this opening up to the world has also given rise to dissatisfaction with the current government. With a taste of democracy, some Chinese citizens have taken actions to defy the state in regards to policies that confine social, individual and cultural rights.13 Despite these, the Chinese government has remained firm in their efforts to be in control. An evidence of this is their policy regarding the development of the Internet in their country. Even with its unique form of government and large population, China has not been immune to the rise of the Internet and the advances it brings to communication and information sharing. However, the freedom that the medium brings to communication has been seen as a potential threat to national security. The Chinese government policies regarding the Internet have been focused mainly on censoring sensitive topics such as opinions on politics and sex.14 This is carried out through a massive government firewall program known as the Golden Shield Project and supported numerous government monitors and citizen volunteers who regularly read through blogs, chat forums, and even e-mail to ensure that no violations are being committed. Fort and Junhai (2002) identify the different policies that regulate the use of Internet in China15: Preliminary Regulations on Computer Information Network and Internet Management- established the SILG who enforces the Implementing Rules of the Preliminary Regulations on Computer Information Network and Internet Management. The Regulation on Telecommunication- regulates telecommunications security and basic and value-added telecommunication business such as e-mails, voicemail, online information storage and indexing, electronic data exchange, online data processing and transaction processing, value-added fax, Internet access-service, Internet content service, and video conferencing service Internet Information Service Regulation- requires Internet information service providers working for profit to apply for licenses first from MII or local telecommunication authorities at the provisional level (aside from asking approval from competent government agencies according to the type of information they provide) while non-profit information service providers are required to register. No person is allowed to use the Internet without approval. Internet information service providers are also required to record the content of all their websites, the time users spent online, user name, IP address and domain name. Decision on Ensuring Internet Security- made traditional criminal laws, civil laws and administrative laws effective to the cyberspace, thus making criminal acts on the Internet punishable by normal laws. The over-arching theme of these regulations is that they provide the Chinese government the capability to effectively monitor and control the Internet with the objective of preserving information and national security.16 Resources and Capabilities as Sources of Competitive Advantage The Golden Shield Project was initiated in 1998 and is controlled technically by the Ministry of Information Industry (MII). Much popularly known as The Great Firewall, was constructed by the MPS to improve the capability of government agencies to monitor online activity.17 This system effectively censors and filters sensitive information going in and out of Internet routers. In China, nine state-licensed Internet Access Providers (IAP) grants Internet access to the whole country. These nine IAP configured their Internet routers not just to block viruses, spam and other malware but also to censor sensitive information deemed illegal by Sate Council Information Office the such as pornography, political and religious propaganda, online gambling18 and sites such as Youtube, and Flickr.19 This formidable filtering program is not just undertaken by the government but is supported by ISPs and companies who also implement self-censorships in their Internet connections and an extensive network of citizen volunteers who regularly read through blogs, websites and Internet domains for dissenting information and report them to the proper authorities.20 Core Competences & Dynamic/Distinctive Competences Ironically, it was computer-based companies in the United States that helped in the creation of this censorship program. Google, Microsoft and Yahoo! have all contributed to the software programs that enable the government to block out Internet information.21 Their participation in the Chinese government program has caused them criticism and scorn especially Yahoo! who provided information that led to the arrest of a Chinese journalist.22 Some of the contents that were censored by the initiative were: News that cover topics such as democracy, freedom of speech, police brutality and the Tiananmen Square protests23 The persecution of the spiritual group the Falun Gong24 Media sites that provide unregulated content such as social and political commentary Taiwanese government sponsored sites25 Obscene and pornographic sites and those that contain criminal acts26 The Central Tibetan Administration and “Voice of Tibet” websites27 Political commentaries targeted at the Chinese Communist Party28 The first provision in News Information Services also reiterates the fact that the purpose of news websites is “to serve socialism” and “safeguard the nation’s interest and public interest”.29 Article 19 of this provision outlines the key content restrictions for news websites30: violating the basic principles as they are confirmed in the Constitution; jeopardizing the security of the nation, divulging state secrets, subverting of the national regime or jeopardizing the integrity of the nation’s unity; harming the honor or the interests of the nation; inciting hatred against peoples, racism against peoples, or disrupting the solidarity of peoples; disrupting national policies on religion, propagating evil cults and feudal superstitions; spreading rumors, disturbing social order, or disrupting social stability; spreading obscenity, pornography, gambling, violence, terror, or abetting the commission of a crime; insulting or defaming third parties, infringing on the legal rights and interests of third parties; inciting illegal assemblies, associations, marches, demonstrations, or gatherings that disturb social order; conducting activities in the name of an illegal civil organization; and Despite these efforts on censorships, there have been instances that users were able to break through the firewall. Individuals with technical Internet knowledge can use proxy sites and other Internet applications to bypass censorship monitors.31 These proxy servers enable users to connect to other websites while Internet application such as Anonymizer and Tor enabled users to quickly look for proxy sites that have not yet been blocked by the government. A disadvantage in using these circumventing applications is that they provide slow and only short periods of connections.32 There have also been cases in which revealed the limitation of government restrictions. A news article regarding the breakdown of Google and Chinese government relations was posted on blog sites and a public Google docs page. These links were then connected to social networking sites such as Twitter, effectively disseminating the article’s information.33 Linkages of Resources and Capabilities This unreliability of proxy servers and the efficient propaganda mechanisms of the Chinese government have effectively deterred citizens from complaining against the restrictions. A study by CASS that investigated whether Chinese citizens use proxy servers revealed that 71.2% of Internet users have never used proxy servers.34 Another survey by the Pew Research Center found out that 80% of Chinese citizens agree that the Internet should be monitored and managed while 85% think that it is the responsibility of the government to monitor it.35 The Chinese government also showed that they can also relax their control of the Internet. The 2008 China Olympics pushed government officials to relax restrictions on some, but not all, media related sites.36 Part 3 – Evaluating Strategic Capability One of the biggest Internet-based companies that sought to tap into the vast Chinese Internet market was Google Corporation. O’Rourke, Harris and Ogilvy (2007) revealed that the company’s decision to invest in China yielded in 3.6% stock price increase.37 Google helped China in setting up their firewall program for monitoring Internet activity. It even set-up its own domain, Google.cn, to comply with the Chinese laws regarding Internet use. However, this decision reaped numerous criticisms from human rights groups and media organizations. The company argued in its compliance and self-censorship that limited information is better than no information at all.38 However, recent issues have arisen that threatened to sour the relation between the Internet giant and the Chinese government. On March 30, 2010, Google’s search engines in China abruptly stopped working. First reports of the incident indicated that Google was encountering internal technical difficulties. However, reports soon surfaced that the company blamed China’s stringent firewall protocol, the Great Firewall, as to be the main source of their service failure.39 This caused Google to revoke their compliance of Chinese censorship laws and thus giving users unrestricted Internet accessed. Later, Google reversed their statement saying that they blamed hackers for the breakdown and not necessarily the Chinese government. However, they warned users to monitor their applications acknowledging the fact that the Chinese government could, at any time, shut down its operations.40 This experience demonstrates the unpredictability and vagueness of China’s Internet censorship laws heaving a large blow on Google’s business prospects in the country with the incident forcing Google to pull out its search operations in the mainland. As of September though, the relation between the two giants has returned to normal, with Google again updating their websites to comply with China’s Internet censorship laws. However, the company has now added a small feature, a link that directs users to an uncensored Hongkong based site41. The decision to comply with Chinese policy came after the government threatened Google that their license would not be renewed if they continued to redirect users to uncensored sites.42 Frameworks for the Analysis of China’s Internet Policies China’s policies regarding Internet use focus mainly on stemming the flow of Internet information. The Chinese government views the Internet not as a source of information but as a means to “to serve socialism” and “safeguard the nation’s interest and public interest.”43 These two purposes guide the Chinese authorities in creating and legislating provisions for the monitoring and regulation of the Internet, and the citizens themselves in complying with these laws. In this light, it will be useful to look at this problem using Critical Theory paradigm. Critical Theory is guided by the principle of critiquing and changing society as a whole44. This paradigm was a direct criticism to the authoritarian principles of Marxism and Communism, both of which are deeply embedded in the socialist society of China. The core concepts of Critical Theory are: Its analysis is directed at society as a whole, examining the specifics of its history and biography Its understanding must stem from the integration of the principles of major sciences such as economics, sociology, history, political science and anthropology The use of critical theory will be helpful in understanding the historical roots of China’s efforts in controlling not just the Internet but the totality of its society. These can reveal conflicts both within and without form the point of view of different approaches such as history, anthropology and politics. The study may also be guided by the principles of Postmodern critical theories which analyzes social problems thorough historical and political contexts.45 An analytical lens that looks at the context of the China and its utilization of the Internet may guide the research to understand why its citizens seem to not be concerned about the issue of Internet censorship. CONCLUSION Literature reveals China’s formidable policy on the use of the Internet, and what its effect would be on burgeoning telecommunications companies such as MENA Telecom in Bahrain. Guided by the principle of preserving the state, the Chinese government has implemented policies and legislations that limit the use of and monitor Internet practices. The previous sections identify just some of the numerous regulations in which Internet-based businesses have to comply in providing cyberspace services to the Chinese populace. What is surprising is that, although the rest of the world is up in arms in calling these policies a serious breach of personal freedom and human rights, most of the Chinese citizens agree to the actions taken by the government.46 This compliance points to a seemingly successful information propaganda regarding Internet Censorship. However, this agreement can also be blamed to the strict implementation of laws and punishments regarding Internet violations, as was the case of one Chinese journalist which was arrested after posting dissenting political articles on-line.47 The inefficiency of means to circumvent the formidable Great Firewall, such as proxy servers, also contributes to the citizen’s passivity when it comes to the issue of Internet censorship. With the increasing active participation of China in the world economy, their vast untapped market has become a major investment landscape for international companies. Analysts agree that the China’s vast population can mean success especially for Internet-based companies who thrive on numerous Internet users. However, companies such as Google have found out that doing business in China is not as easy as it seems. Technical and logistical difficulties have plagued the company’s business in the company as they try to balance their compliance to China’s policies while maintaining their public image to the world. Although the recent breakdown of the Google’s services in China has already been temporarily solved, the incident demonstrated the unpredictability and vagueness of the country’s laws. This incident can serve to be a deterrent for future companies to invest in China or could be the spark which would lead to the breakdown of Chinese Internet censorship policies. In the end, it is the citizens themselves who must decide whether they agree to or disagree with their government’s policies. As of now, the Chinese government has been successful in preserving their “harmonious” and “peaceful” society at the expense of the freedom of information. This paper will investigate China’s Internet censorship laws and attempt to understand the principles behind the policies, reveal its impact on the Chinese society and its effect on the Chinese individual’s opinion regarding freedom to information. 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