Net telephony gets Chinese court approval

NEWS In a landmark case for Chinese telecommunications, two entrepreneurs offering cheap international calls using Internet telephony have been acquitted of breaking the law. Chen Yan and Chen Zhui were originally found guilty after the state-run telco, Fujian Telecom Bureau, charged them with violating the country's state monopoly. But the businessmen appealed to a higher law court insisting they were Internet users providing a service and not telephony providers - an argument that was upheld by the Fuzhou court. The Chinese government has now called for an investigation into the way the Internet is regulated. Robin Duke-Woolley, principle analyst Schema, believes China is following the same pattern that Europe and the US followed. "It parallels discussions of Internet protocol in Europe and the US. The telcos argued it is telephony and wanted it to be regulated as such, but the FCC threw that argument out of court and the EC did much the same thing," he said. Yan and Zhui sparked problems when they more than halved the Fujian Telecom Bureau's international call charges. Duke-Woolley believes this could be the "Trojan horse for more competition in the market". However, he warned: "China at the moment has poor IP backbone and is pretty congested so any users will most likely find the service disrupted."