Rumored China Mobile’s (CHL) WAP policy change

Imaging the following scenario:

Southwestern Bell is your internet service provider. It is Saturday and you just got up. You decided to browse the internet. You turned on the computer and opened internet explorer. You would like to go to www.cbs.com

But instead of going there directly, you were re-directed to www.news.swbell.com first. You would need to click one more time before you were allowed to go to www.cbs.com.

Next, you would like to go to www.youtube.com. But youtube.com is classified by Southwestern Bell as a “black” site. First you are redirected to www.video.swbell.com. If you insist to go to youtube.com, you will get a message saying since youtube.com is considered a “black” site, you will be charged additional fee based on how much traffic you use through www.youtube.com.

Yes, I am talking about the sorry state of Wireless Value Added Service (WVAS). Here, in the United States, there is no WVAS industry since all the major service providers such as Sprint or Verizon had complete killed off any independent WVAS companies.

But in China, there used to be a thriving industry of WVAS companies. A lot of WVAS companies are unethical, but just like early days of internet, eventually, the bad will get weeded out.

But instead of following Japan, the WVAS industry is following USA where a whole industry died out because it allows the service providers (like China mobile or China Unicom) to be both competitor and regulator.

According to the following two links (this is reported in all major portals, I only provide the two links for representation purpose):
http://www.techweb.com.cn/news/2007-04-20/184367.shtml
http://www.techweb.com.cn/news/2007-04-19/183716.shtml

On May 17, China Mobile is going to have three policy changes.

When 3G arrives in China, WAP will be the most lucrative business. As a result, there are 10’s of thousand independent WAP sites coming out in the last two years. China Mobile’s own WAP site is losing market share fast.

Against this backdrop, CHL is going to publish three policy changes on May 17, 2007. The policy changes are done in the name of providing a filtering service to protect the public from harmful contents. The proposed changes are:

1). All WAP web sites will be first redirect to CHL’s WAP site first before going to the intended WAP site.
2). All WAP companies will be classified into three categories: White, Grey, and Black. Users could get complete access to the white’s site. But the white site is on CHL’s WAP platform. Users might not even know he/she is on company white’s web site. Users can only get limited access to the Grey sites. Users either can’t access Black web sites, or requires extra bandwidth charge to access Black sites.
3). Users will be charged extra bandwidth charges for going to Black sites.

I am sure all these represents extra revenues to CHL in the short term. That is until they kill off the whole industry. Then nobody make any money.

At this point, this is a very reliable rumor. I think if there is little public outcry, the rumor will become policy.

Is this what China really wants, the extinction of a thriving industry?

I don’t blame CHL. They are just doing what all monopoly is suppose to do. But how dumb can the Chinese regulator gets. How can they let a competitor be a regulator?

What is next, let a fox guards a hen house? Or a cat protects a bird nest?