Getting More Culture: New Rules For ICPs

Consistent with existing regulations governing ICPs, Internet cultural activities are divided into commercial and non-commercial activities. Commercial activities refer to the provision of Internet cultural products and related services for profit; profits are obtained by charging fees to online users or by e-commerce transactions, advertising or sponsorships. Non-commercial activities cover the provision of Internet cultural products and related services to online users where profit is not the objective.

Establishment Conditions

Under the Tentative Provisions, only Internet information service providers that have obtained approval from the MOC or its local counterparts and telecommunications authorities may engage in Internet cultural activities. Such providers are referred to as "Internet culture units". While the IIS Procedures govern the establishment of an Internet culture unit, the new Tentative Provisions repeat many of the general conditions in addition to the requirement that the scope of Internet cultural activities be expressly defined.

First-step Approval

An application to establish a commercial Internet culture unit must be made to the provincial-level culture authorities. The provincial authorities must issue a preliminary opinion within 30 days of receiving the application. If the application passes the preliminary examination, the application will be forwarded to the MOC for examination and approval, and the issuance of a Permit for Online Cultural Operations.

An application to establish a non-commercial Internet culture unit must also be made to the provincial-level culture authorities, and if the application is approved, an approval document will be issued.

Telecom Approval

After approval, the Permit for Online Cultural Operations or the approval document should be submitted to the local telecommunications authorities or the MII, and the relevant procedures should be completed in accordance with the IIS Procedures. Under the IIS Procedures, the provider of commercial Internet information services must obtain an Internet Information Service Value-Added Telecommunications Business Operations Permit from the telecommunications authorities. Afterwards, registration with the enterprise registration authorities is to be completed.

Providers of non-commercial Internet information services must complete recordal procedures with the telecommunications authorities.

Homepage Requirements

Consistent with previous legislation governing ICPs, a commercial Internet culture unit must add the serial number of the Permit for Online Cultural Operations and the serial number of the permit issued by the telecommunications authorities in a prominent place on the home page of its website.

A non-commercial Internet culture unit must display the serial number of the approval document issued by the culture authorities and the recordal number assigned by the telecommunications authorities on the home page.

Internet culture units must also maintain backup copies/records of all product content that it provides as well as the times, Internet addresses and domain names for a period of 60 days.

Prohibited Content

The Tentative Provisions reinforce the existing PRC legislation on prohibited content. Cultural products must not contain any content that, among other things, contradicts the Constitution; compromises national unity or territorial integrity; promotes superstitions or cults; or infringes the lawful rights and interests of third parties.

Liability

If the products provided by an Internet culture unit infringe the lawful interests of third parties, the unit must bear civil liability in accordance with the law. The Tentative Provisions stipulate various penalties including warnings, orders for rectification and fines of up to Rmb30,000 and, in serious circumstances, revocation of the Permit for Online Cultural Operations.

Conclusion

The MOC is fully aware of the growing market for Internet products, ranging from games to music downloads. The entertainment and information industries should assess these regulations carefully to see how the provisions will affect their business operations.