MIIT Drafts New Telecoms Service License Regulations

On April 11, MIIT released the Administrative Measures for Licensing of Telecommunications Services (Draft Revision for Comment). The Draft Measures are an updated version of the 2009 released document. Overall, the major framework of licensing has not changed. Basic telecom and trans-regional value-added telecom service (VATS) are still licensed by MIIT; VATS is licensed at provincial level. Foreign-invested telecom enterprise is licensed by MIIT according to Provisions on the Administration of Foreign-invested Telecom Enterprises.

The Draft Measures are in line with China's policy of "streamlining administrative measures, cutting back on governance while improving regulation in general". In other words, the Draft Measures include a mixture of subtractions and additions compared to the 2009 revision. For instance, the requirement for basic telecom services provider and trans-regional value-added telecom service provider to go through additional record-filing procedure at local level was taken out while measures on cybersecurity has been added to the application and inspection of the license. Other positive updates include the removal of requiring the minister of MIIT to sign off the license for basic telecom, trans-regional VATS, and foreign-invested telecom business, the removal of requiring companies to submit recent audit report MIIT for the application of VATS license, and limiting the need of filing for a license alteration to a change of business entity.

The new Draft Measures call for the establishment of a new MIIT Telecoms Management Platform that will enable online applications for and management of telecoms licensing, a credit management system, and an annual information disclose system through the platform. Overall, there will be an increased amount of security review for both basic telecoms services and VATS licenses, and through the use of a blacklist and a list of ‘dishonest telecoms operators’ they will enforce telecoms regulation. Information needed to be disclosed includes cyber and information security assurance measures and implementation status. Other information like annual performance of telecom services, network construction, business development, change of personnel and organization, and service quality will be made public.