David WolfBy David Wolf
Still waiting for the China Telecommunications Law? Waiting Is. The wheels of legislation indeed turn slowly, but I think we have something of a record here.

The development of China's Telecommunication Law began in 1980, and was originally placed on the agendae of the State Council and the National People's Congress (indicating some subjective state of readiness) in 1988.

For the next 13 years the drafting continued. Policy changes, technology changes, and tectonic shifts in the industry globally conspired to put the law into what my Hollywood friends would call "turnaround hell," with revision after revision getting bounced back by some unhappy group or another. It a fit of optimism, the MII set up the Telecommunications Law Leadership Team, the Telecommunications Law Work Team, and the Telecommunications Law Expert Consultation Commission in April 2001, hoping that this would somehow break the cycle.

Don't bet on it.

Casting no aspersions on the abilities of China's beleaguered administrators, the problem with attempting to create a single body of law that encompasses such a large, economically important, and rapidly changing sector is in all likelihood self-defeating by design.

The sheer rate of technological innovation in the sector is probably the worst. If you think that industries and markets are having a hard time keeping up, imagine you are a mid-level regulator in the MII or some affiliated organ. By the time the young bureaucrats assigned to draft the regulations get their heads around the technology change, the industry has passed them by and is already looking at the next iteration in speed, protocols, or what have you.

Add to this the vetting process. For those unfamiliar with the circuitous route the telecom law must take and the level of frustration faced by those trying to make this law happen, I suggest watching Terry Gilliam's movie Brazil. Once the work group has drafted the law, it must go to experts for review and input. Back for revisions. Then to the leadership group. Back for revisions. Then to the MII. Back for revisions. Then to several different other ministries. Back for revisions. Then to the super bureaucracies under the State Council. Back for revisions. Then to the State Council itself. Back for revisions.

You get the picture.

And each one of these steps involves long periods of time where people read, debate, check with others, argue, posture, compromise, draft, argue again, and submit.

Indeed, what is not amazing is that there is no Telecom law after nearly 24 years, but that there are not entire mental hospitals filled with the poor people charged with trying to incorporate the parochial concerns of dozens of different groups and individuals into a coherent piece of legislation that will not throw the entire industry (or large chunks thereof) into a tailspin.

Unless the effort to regulate the sector is to be abandoned completely (perhaps not an entirely bad idea), the process needs to change.

Because the fact is, the country needs a telecommunications law, if for no other reason than to end the uncertainty that is a real factor in slowing the growth of a critical part of China's economic infrastructure. While it is unlikely to stop dead the rollout of premium services designed to serve businesses and well-off urban dwellers, continued delay does hamper carriers in their efforts to wire the chunks of this country that are yet to enjoy the benefits of Plain Old Telephone Services, to say nothing of the Internet, broadband wireless, or ADSL.

This, in turn, hampers China's ability to incorporate the rural population of the country (which, by the way, has passed the 1 billion headcount) into the economic updraft the wealthier regions are enjoying, and in particular ensures that the benefits of informatization stop at the city limits. This leads, among other things, to the permanent pauperization of the peasantry, a growing floating population, increased urban crime, discontent, and unrest.

All of this is not to suggest that the lack of a Telecommunications Law will lead to social chaos. But it does make clear that there are specific issues in the telecoms sector where regulatory structure is desperately needed, and other areas that could probably wait a bit. All of that gets mixed up together when you try and create the entire body of law all at once.

So what is the solution?

The answer, quite clearly, is to come up with a small, simple, but overriding regulation that sets a general tone for telecommunications that nearly everyone can agree on. Call it Doctrine, call it a Manifesto, or call it The Telecommunications Keystone Law. Whatever. Simply lay out in 1000 words or less the general directions that China wants to take with telecommunications. Get that out, and then, under that, begin to create laws that establish regulation where necessary, like:

> Guidelines on the allocation of bandwidth.

> Requirements to ensure rural informatization and universal telecommunications service

> Laws covering the establishment, management, and ownership of telecommunications companies.

And then build the rest piece by piece.

But for crying out loud, just get something on the books. The nation can ill afford regulatory thrombosis in a sector that will do much to ensure the growth and success of nearly every other industry in China.

About the author:
Silicon Hutong is an ongoing series of thoughts and commentaries by David Wolf, President and CEO of Wolf Group Asia'a management advisory firm providing strategic communications counsel to technology, media, entertainment, and telecommunications companies in Greater China and the Asia-Pacific region. David's opinions are his own and do not reflect those of either WGA or it's clients. Past articles can be found at www.chinatechnews.com, the Silicon Hutong Blog can be found here and David himself can be contacted at [email protected].

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