Ministry of Culture, Strengthening the Administration of Chain Operation of Internet Access Services Providers Circular

Issued: April 22 2003
Applicability: "Chain operation of internet access services providers" is defined as a form of business organization whereby several internet access services providers are under the unified administration of the head office, strictly follow the organization and regulation of chain operation, have common operational guidelines, service guidance, identities, logos, d¨¦cor, homepage and remote computer administration (Section Two).

Main contents: The Circular allows for two different styles of chain operation: direct control and franchise chain operation. In order to qualify as direct control chain operation, the parent entity must own 51% of the controlling shares of its chain stores (Section Two). A maximum of three enterprises for the chain operation of internet access services providers may be approved in each province; nationally, in principle, at most 10 enterprises may be approved (Section Three). An enterprise engaged in chain operation of internet access services providers must have registered capital or capital contribution of at least Rmb10 million for provincial operation, and at least Rmb50 million for national or cross-provincial operation. Such enterprise must have at least 10 directly controlled chain stores for provincial operation and at least 20 in at least two provinces for national or cross-provincial operation. Directly controlled chain stores shall account for at least 10% of the total number of chain stores (Section Four).
Related legislation: Administration of Chain Operation of Internet Access Services Providers, Sep 29 2002, CLP 2002 No.9