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The convergence of telecommunications, cable television and computer networks has become a national priority and China intends for relevant government departments to work together to achieve this goal.

China’s five-year development plan for the period until 2010 identifies network convergence as a focus area. The 2007 work plan of the Ministry of Information Industry (MII), the telecoms regulator, and the departmental five-year plan of the State Administration of Film, Radio and Television (SARFT), the broadcast sector watchdog, also stress the importance of convergence.

However, looking closely at the plans of MII and SARFT, there is a difference in the priority each body places on convergence. MII says it will strengthen communication with relevant ministries, push for the issuance of relevant policies for convergence and will promote the multipurpose utilisation of various types of network resources. MII also touches upon TV digitalisation and mobile phone TV, but more in the context of industrial policies relating to equipment production and frequency allocation.

SARFT, on the other hand, puts more emphasis on digitisation, not only of TV, but also of motion pictures. Given the difficulties SARFT has encountered so far in the country’s migration to digital TV, it is not surprising that the agency would focus in the near future on the acceleration of digitalisation in China, particularly in major cities prior to the 2008 Olympics.

To achieve convergence in China, co-operation between MII and SARFT is essential but it remains to be seen whether the two can set aside their vested interests and work together.

A proposal for the establishment of an umbrella regulator that would take charge of the country’s telecom and media industries, along the lines of the US Federal Communications Commission, resurfaced in the recent meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference. Many industry analysts, however, believe convergence and the establishment of a new regulator will not take place until after a new telecoms law is issued.

China’s five-year plan emphasises security in both the telecoms and media sectors, both of content transmitted and the networks involved.

In regards to the media sector, the plan also reiterates the importance of introducing foreign culture that is beneficial to China and of propelling Chinese culture to the world’s attention. The dual goals of promoting the export of Chinese content while cordoning off China from harmful foreign content first appeared in a notice issued by SARFT in February 2005, and have been emphasised in other notices and regulations issued by the State Council and various government departments. The inclusion of these views in the state five-year plan should come of no surprise to the domestic industry players and foreign investors.

The plan also states that more private capital should be introduced into the media sector and that existing cultural institutions should be converted to market-competitive enterprises. Development of a modern publishing and distribution industry and promotion of digital publishing are also called for.

It is interesting to note that SARFT’s departmental plan lists the setting up of a direct satellite broadcasting system as an objective. However, unless China changes its existing regulations restricting reception of foreign satellite programmes to certain designated entities, direct-to-home broadcasting cannot develop in China.

The telecom and the media sectors are two of the most vibrant in China. As new technologies, new applications and changes in market conditions continue to propel development, convergence could come close to realisation in spite of obstacles such as the rivalry between MII and SARFT.

Ms Chan heads the Asia communications and technology and China practice groups as a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Ms Ip is a senior paralegal at the firm.

Copyright The Financial Times Limited 2017. All rights reserved.
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