China incentivizes self-censorship in regulation of online video

The latest ‘innovation’ in Chinese legal regulation of the Internet targets online audio and video content. Effective January 31, 2008, the Provisions for the Management of Internet Audio and Video Programming Services build on previous Measures issued by broadcast media regulator SARFT (State Administration of Radio, Film and Television) issued in June 2004. The tone and substance of these regulations appear to be a further refinement of the government’s attempt to create a sustainable ‘walled garden’ of self-policed Chinese language content. While many of the established strategies to control online content have been extended here, these regulations could also represent a considerable tightening of a rapidly commercialized (and frequently fascinating ) online space.

Some of the material changes include:
--Licensing requirements: These new regulations were jointly issued by broadcast media regulator SARFT and the Ministry of Information Industry (MII). As a result, depending on what kind of services are offered, both state agencies can impose their respective licensing requirements on A/V service providers. Thus, video service providers that produce their own content are required to have both a broadcast production license as well as a rarely issued Internet news information services licenses regulated by the MII (Article 9).

--Content restrictions carry forward the model introduced in the 2005 Provisions on the Administration of News Information Services, online news coverage was given its own complex regulatory scheme with the result that only news originating from state-supervised news outlets could be posted online. Just as unlicensed service providers may not upload or transmit content for anyone, they are also prohibited from allowing any individuals to upload content pertaining to "current events" news, which has been defined as reporting and commentary relating to politics, economics, military affairs, foreign affairs, social and public affairs, as well as reporting and commentary relating to fast-breaking social events. To publish A/V of all the news that's fit to print, content must come from radio stations at the local (municipal) level and above, television stations, or be first posted on the websites of central news work units.

Content restrictions have also been substantively modified slightly, to introduce the element of inducing minors to commit offenses or inflame violence (Article 16). Dozens of laws and regulations relating to the Internet include the same content restrictions, and content that endangers state security, reveals state secrets, harms national unity, incites ethnic division and endangers social stability has long been prohibited. The additional focus on minors is compatible with the substantial referencing of policy slogans developed under the leadership of President Hu Jintao, including building a “healthy” Internet culture and a “harmonious society.”

--Explicit liability for individuals: Another change from the 2004 Measures is the singling out of individuals, so that "primary investors" and "managers" can now be fined up to 20,000 RMB for violations such as not sufficiently policing content or changing shareholders without going through specified procedures (Article 23). While the regulations do not define primary investors or managers, these individuals found to be in major violation of these rules may also be barred from investing or engaging in similar services for 5 years from the date of punishment (Article 27).
--Broadcast regulators and telecom departments are now both responsible for establishing a public supervision and reporting system for illegal activity (Article 21).

A significant degree of uncertainty has been created by the inaugural requirement that these content service providers be either wholly state-owned (as defined in Article 65 of the 2005 Company Law) or entities where the state holds the controlling interest. This move not only flies in the face of reality—most Chinese video-sharing sites (and portals, BSPs, etc.) are not controlled by the government-- but could potentially undercut an important element of the government’s own success with shaping online content. Some of the collateral damage caused by China’s system of information control has been mitigated by the proliferation of Chinese companies that have created the equivalent of many online services and tools, including search engines, chat, and blog service providers. This collateral damage includes the inconvenience and degraded information environment created through the Great Firewall filtering of sensitive content as well as sites such as Feedburner, Blogspot, and Flickr. Based on the experience of companies such as Google, it appears that Chinese companies have been able to accommodate and adapt to tight content controls with greater ease than their foreign counterparts.

For online video, YouTube, the industry leader which is either intermittently blocked in China or slow and difficult to access, is part of a crowded scene of Chinese companies providing similar services. The websites of state television and other broadcasting organizations are increasingly popular. And yet, if industry leaders in online streaming content must scramble to comply with these requirements, even more inefficiencies and collateral effects are created. This seems to be a cost that the government is willing to absorb in order to downgrade the viral nature of this space.

Commentators have weighed in to say that these regulations are merely a formalization of processes that were already in place. Companies such as Sixrooms, tudou.com and others may also benefit from a longstanding pattern in Chinese legal reform-- few expect that the law on the books will be uniformly and transparently enforced. The increased stringency of licensing and ownership requirements as well as third party liability may not actually hinder industry players from operating, and may not actually change the system of take-downs based on content restrictions already in place. However, when incentives for self-censorship are laid down explicitly at the feet of an ever growing list of players--now including major investors and managers--vigorous enforcement may not even be necessary. These regulations could further entrench expectations that aggressive self-policing for pornography and sensitive political content may shield cooperative companies from the full brunt of implementation.