Laws of the People's Republic of China

   Article 1 (Purpose and Basis)

The present Procedures are formulated in accordance with the relevant State stipulations and the "Provisions of Shanghai Municipality for the Protection and Development of Telecommunications", and with the actual circumstances of Shanghai taken into consideration, to maintain the order of telecommunication services in this Municipality, to standardize the business operations of telecommunications services for those who engage in them and to ensure the normal business operations of telecommunications services.

   Article 2 (Definition)

The telecommunications services specified in the present procedures refers to the various kinds of services, based on the customers' demands, to transmit information such as signs, signals, words, pictures and language by means of light, electricity or other electro-magnetic systems.

   Article 3 (Scope of Application)

The present Procedures apply to the business operations of telecommunications services and their administration in this Municipality.

   Article 4 (Basic Principles)

Business operations of telecommunication services shall be carried out in compliance with the following principles: monopolization of the primary telecommunication services, free-competition for other services, sharing of resources, non-gratuitous services, fairness in competition, protection of customers' freedom and secrets in communication and their legitimate rights and interests.

   Article 5 (Competent Departments and Coordinated Departments)

The Post and Telecommunications Administrative Bureau of Shanghai Municipality (hereinafter referred to as "Municipal Post and Telecommunications Bureau") shall be the administrative department in charge of the industry of telecommunication and the business activities thereof. It shall be responsible for the administration of all business activities of telecommunications services within this Municipality.

The departments of industry and commerce, public security, price control, customs and radio transmission administration, shall, in the light of their respective duties, exercise their administrative and supervisory functions over the business operations of telecommunications services.

CHAPTER II ADMINISTRATION OF NATURAL ENDOWMENTS

   Article 6 (Clarification of Telecommunications Services)

The telecommunication services shall be divided into the monopolized sector and the free-competition sector. For those that fall under the free-competition sector, a permit system and an application system are exercised.

   Article 7 (Scope of the Monopolized Sector)

The following telecommunications services shall be monopolized by State- approved business operators of telecommunications services:

1. Telephone services, including local calls, long distance calls within the country, international calls, etc.;

2. Telegraph services, including telegraphs within the country, international telegraphs, fax services, etc.;

3. Other telecommunications services monopolized with the approval of the State.

   Article 8 (Scope of Permit System in Business Operations)

For the following telecommunications services, a permit system shall be instituted:

1. Paging;

2. 800 MHz concentrated telephones;

3. 450 MHz mobile telephone communication;

4. Telecommunications through very-small satellite ground stations within the country;

5. Other telecommunications services to be run, with the approval of the State, under a permit system.

   Article 9 (The Scope of Reporting System in Business Operation)

For the following telecommunications services, a system of application and official approval shall be instituted:

1. Telephone information services;

2. Computer information services;

3. Electronic mailboxes;

4. Electronic data interchange;

5. Visuals;

6. Other telecommunications services to be run, with the approval of the State, under a system of application and official approval.

   Article 10 (Qualifications for Application of Business Operation)

One who applies for permission to do business in telecommunication shall have the following qualifications:

1. State-owned or collective-owned enterprises with corporate capacity or an enterprise whose interest is controlled by it;

2. Having technical and managerial personnel required for such business operations;

3. Having a fixed place for its business operations and the necessary facilities;

4. Having funds that satisfy the statutory requirements and are commensurate with the scope of its business operations;

5. Having telecommunication equipment that is connected with the public telecommunication networks, and that meets the State's technical requirement for networking;

6. Having the capability to supply long-term services for customers;

7. Having other qualifications required by the State.

When organizations or individuals from abroad or foreign invested enterprises in China intend to do, or participate in, the business of telecommunication in this Municipality, their applications shall be dealt with in accordance with the relevant State provisions.

   Article 11 (Materials Required When Submitting the Application)

When applying for permission to do business in telecommunication, the applicant shall submit the following materials to the Municipal Post and Telecommunications Bureau:

1. Application for permission to do business in telecommunication;

2. List of names of the legal representative and chief technicians and executive officers;

3. Certificates regarding the place of business operations, relevant facilities and equipment;

4. Feasibility study report for doing business in telecommunications services, which covers the types of business scope of services, market forecasting, development plan, technical standards, anticipated quality of services and service charges.

   Article 12 (Application and Approval in Connection with the Monopolized Sector of Telecommunications Services)

Application and approval in connection with the monopolized sector of telecommunication services shall follow the relevant State provisions.

   Article 13 (Application for Approval in Connection with the Free- Competition Sector of Telecommunications Services)

One who is to be engaged in business operations that fall under the free-competition sector in this Municipality shall submit its application to the Municipal Post and Telecommunications Bureau. If the intended business operations are interprovince or intercity, the applicant shall submit its application to the Ministry of Post and Telecommunications in accordance with the relevant State provisions.

   Article 14 (Issuance of Permit)

In connection with telecommunications services that need a permit, the Municipal Post and Telecommunications Bureau shall decide the number of permits to be issued and the time and method of issuance on the basis of the available communication equipment, the available lines and frequencies of the public networks, and the demand and supply of the telecommunication market. Information regarding the issuance of permit shall be released to the public in advance. Detailed procedures shall be formulated by the Municipal Post and Telecommunications Bureau, and shall be filed with the Municipal People's Government for the record.

   Article 15 (Examination and Approval for Telecommunication Services That Need a Permit)

The Municipal Post and Telecommunications Bureau shall examine the application within 30 days after it accepts the application regarding business services that need a permit. An applicant whose application passes such examination shall be given a permit. An applicant whose application fails to pass such examination shall be given a written reply. An applicant who does not receive a reply within 30 days shall be considered to have been granted approval for its application for a permit.

Permit may be issued by means of bids-invitation. The Municipal Post and Telecommunications Bureau shall issue the permit to bid winners within 30 days.

An applicant shall establish an operative service system within 12 months after receiving the permit.

   Article 16 (Examination and Approval in Connection with Telecommunication Operations that Need Official Approval)

The Municipal Post and Telecommunications Bureau shall complete the examination procedures within 30 days after receiving all application materials submitted by the applicant in connection with telecommunication services which need an official approval. An applicant whose application passes such examination shall be given the official approval. An applicant whose application fails to pass such examination shall be given a written reply. One who does not receive any reply within 30 days shall be considered to have been granted approval for its application.

   Article 17 (Other Examination and Approval Procedures)

Those who have been permitted to do business in telecommunications shall bring their permits or official approvals to the administrative department of industry and commerce to complete the formalities of registration or alteration of registration. For business operations that involve radio communication, application procedures for the allocation of frequencies and the setting up of transmission stations shall be completed with the administrative department of radio transmissions on the strength of the permit, as provided for by the relevant regulations.

   Article 18 (Filing for the Record)

Those who have been officially approved by the Ministry of Post and Telecommunications to do interprovince or intercity business in the free-competition sector of telecommunication shall file with the Municipal Post and Telecommunication Bureau for the record within 30 days after receiving the permit or official approval.

   Article 19 (Entrustment of the Monopolized Sector)

Business operators in the monopolized sector of telecommunications may entrust qualified entities or individuals to do part of the monopolized business on their behalf. For such entrustment contract of entrustment shall be entered into. Business operators in the monopolized sector of telecommunication shall conduct business or technical training for the entrusted entities or individuals.

   Article 20 (Term, Renewal, Alteration and Termination of the Permit)

The term of the permit shall be five years.

The business operators who desires to continue their business operations after the expiration of the term of the permit shall go to the Municipal Post and Telecommunications Bureau and go through due formalities for renewal at least 60 days before the expiration of the permit.

When it is necessary to alter the scope of business during the term of the permit, the business operator shall go to the Municipal Post and Telecommunications Bureau and go through due formalities for registration of alteration at least 60 days in advance.

When it is necessary to have an early termination of the business operations during the term of the permit, the business operator shall apply to the Municipal Post and Telecommunications Bureau at least 60 days before the early termination. The permit shall be canceled only after approval and all problems arising therefrom in connection with the users have been properly dealt with.

The procedures for the examination and approval of renewal, alteration and termination of the permit shall be completed with reference to the relevant provisions of Article 15 of the present Procedures.

   Article 21 (Requirement for the Administration of the Permit and Official Approval)

The permits and official approval documents shall not be forged, altered, lent or transferred to others.

CHAPTER III MANAGEMENT OF THE BUSINESS OPERATIONS

   Article 22 (Check Before the Operations)

Upon completion of preparation for business operations, the business operator of telecommunications services shall notify the Municipal Post and Telecommunications Bureau in written form. The Municipal Post and Telecommunications Bureau shall, within 10 days after receiving the notice, conduct a check in accordance with the standards and requirements stipulated in the relevant provisions. A business operator that passes the check shall be given the go-ahead notice within 10 days. One that fails to pass the check shall be given a notice with suggested opinion for improvement within 10 days.

   Article 23 (Standards for Telecommunications Equipment)

The exchange equipment, transmission equipment, terminals and networks used by business operators of telecommunications shall satisfy the technical standards with regard to the equipment and conform to the technical system of networking of the State.

Business operators of telecommunications shall not use, accept or sell telecommunication equipment that do not have a certificate of networking issued by the Ministry of Post and Telecommunications or the Municipal Post and Telecommunications Bureau.

   Article 24 (Supply of Basic Lines and Equipment)

Business operators of the monopolized sector of telecommunications shall, in the light of the situation of supply and demand, and at the uniform price ratified by the department of price control, supply the basic relay equipment and lines needed for business operations to those in the freecompetition sector of telecommunications services, and sign relevant contracts with them.

The term of supply of the relay equipment and lines mentioned in the preceding paragraph and matters relevant thereto shall be separately provided for by the Municipal Post and Telecommunication Bureau and filed with the Municipal People's Government for record keeping as required.

   Article 25 (Requirements for Network Operations)

Business operators of telecommunications shall establish a necessary maintenance system for the communication lines and equipment in accordance with the stipulations of the Ministry of Posts and Telecommunications and the Municipal Post and Telecommunications Bureau, so as to ensure the normal operation of the telecommunications networks and improve its quality. They shall not hamper the normal operations of the telecommunications networks and improve its quality. They shall not hamper the normal operations of other existing telecommunication networks.

   Article 26 (Requirements for Business Operations)

Business operators of telecommunications shall comply with the following requirements in their business activities:

1. Act in accordance with the business rules and technical procedures prescribed by the Ministry of Post and Telecommunications and the Municipal Post and Telecommunications Bureau;

2. Make known, at the place of business, to the public the types of telecommunications services, service standards, rates of service charges and business hours;

3. Set up a special service center and surveillance telephone number to give advice to, and receive complaints from, the customers;

4. Guarantee the quality of communication lines and equipment provided to the customers, and make repairs or renovations upon receiving request within the prescribed time.

   Article 27 (Prohibitions)

Business operators of telecommunications and the employees thereof are prohibited from doing the following:

1. Providing, without proper consent, information to others regarding the customer's use of telecommunication services;

2. Cutting off the customer's telecommunication or delaying the rendition of services without justifiable reasons;

3. Stopping, without approval, the business operations of telecommunications which have been approved;

4. Imposing restrictions on the use of telecommunications services or on the purchase of telecommunication equipment, or coercing customers into using telecommunications services or purchasing telecommunications equipment;

5. Providing information to customers against their will;

6. Using advertisements containing false information or using other inappropriate means to promote publicity or depreciate other business operators;

7. Committing other acts that will impair the rights and interests of the customers;

   Article 28 (Suspension of Services)

When the customer does one of the following, the business operator of telecommunications may request him to rectify his behavior, and may suspend the rendition of services if he does not comply within a set period of time:

1. Using telecommunication equipment that does not have the newtworking certificate issued by the Ministry of Post and Telecommunications or the Municipal Post and Telecommunications Bureau;

2. Delaying payment of service fees or refusing to pay it;

3. Using telecommunications services to endanger national security, jeopardize social order or impair the legitimate rights and interests of others;

4. Other acts that may hamper the business operations of telecommunications or the management thereof.

When the competent authorities lawfully request the business operator of telecommunications to suspend the rendition of telecommunication services to a customer who violates 3 or 4 of the present Article, the business operator shall cooperate and comply with the request.

   Article 29 (Service Charges)

Business operators of telecommunications shall strictly comply with the uniform rates of service charges set by the State. With respect to services that do not have uniform rates set by the State, the Municipal Post and Telecommunications Bureau shall recommend rates, which shall be implemented after ratification by the municipal department of price control. With respect to services that do not have rates set by the State or by this Municipality, the business operator of telecommunications shall decide at its own discretion.

Business operators of telecommunications shall comply with the relevant stipulations of the Municipal Post and Telecommunication Bureau and the departments of price control when they charge service fees in advance.

   Article 30 (Telecommunications Administration Fee)

Business operators of telecommunications shall pay administration fee to the Municipal Post and Telecommunications Bureau. The rates for the fee shall be recommended by the Municipal Post and Telecommunications Bureau and submitted to the Municipal Price Bureau and the Municipal Finance Bureau for ratification. The telecommunication administration fee shall be listed and managed as an unbudgeted fund of this Municipality.

For a delay in the payment of the telecommunication administration fee, a penalty of 0.2% for each day of delay shall be imposed.

   Article 31 (Emergency Adjustment of Telecommunications Network)

In the event of emergencies, the Municipal Post and Telecommunications Bureau may, with the approval of the municipal government, temporarily exercise unified control over business operators' telecommunication networks and reallocate communications lines.

   Article 32 (Administrative Inspection)

The Municipal Post and Telecommunications Bureau is entitled to supervise and inspect the business activities of telecommunication operators. The post and telecommunications administrators shall carry uniform credentials with them when they act in their official capacity.

   Article 33 (Administrative Punishment)

Units or individuals who violate the present Procedures shall be subject to the punishment by the Municipal Post and Telecommunications Bureau in accordance with the following provisions:

1. Those who engage in business operations of telecommunications without official permission shall be enjoined from continuing their business activities. Their unlawful gains shall be confiscated, and a fine of 5000 to 50,000 yuan shall be imposed on them.

2. Those who forge, alter, borrow or transfer the permit or the official approval shall be penalized by confiscation of their unlawful gains and revocation of their permit or official approval. In addition, a fine of 3,000 to 30,000 yuan shall be imposed on them.

3. Business operators of telecommunications who continue their operations without a renewal after their permit expires, or alter, without going through due formalities as required, the scope of their business during the term of the permit or terminate their business before expiration of the permit, shall be given a warning, and be fined 1,000 to 10,000 yuan.

4. Those who takes the liberty to start business operations of telecommunications without the check or fail to pass the check, or those who fail to establish an operative service system within 12 months after receiving the permit, shall be ordered to rectify their behavior within a set period of time and punished by a fine of 2,000 to 20,000 yuan. If the case is serious, the permit shall be revoked.

5. Business operators of telecommunications, who use telecommunications equipment that does not conform to the relevant technical standards of the State and thus hamper the normal operation of other existing networks, shall be ordered to rectify their behavior within a set period of time. In addition, they may be punished by a fine of 1,000 to 30,000 yuan.

6. Those who suspend or terminate their business operations of telecommunications without authorization or justifiable reasons, who impose restrictions on the use of telecommunications services or on the purchase of telecommunication equipment, or coerce customers into using telecommunication services or purchasing telecommunication equipment, who provide information regarding the customers' use of telecommunications services to others without proper consent; or provide information to customers against their will, shall be ordered to rectify their behavior within a set period of time, and may be punished by a fine of 1,000 to 10,000 yuan.

7. Business operators of telecommunications who provide telecommunications services that fall below the set standards shall be ordered to rectify their behavior and may be punished by a fine of 1,000 to 10,000 yuan.

8. Business operators of telecommunications that fail to make known, in accordance with the provisions, to the public the types of telecommunications services, service standards, rates of service charges and business hours shall be ordered to rectify their behavior within a set period of time, and may be punished by a fine of 1,000 to 3,000 yuan.

9. Business operators of telecommunications who accept or sell equipment that does not have the networking certificate issued by the Ministry of Post and Telecommunications or the Municipal Post and Telecommunications Bureau shall be ordered to rectify their behavior within a set period of time, and may be punished by a fine of 1,000 to 10,000 yuan.

10. Business operators of telecommunications who do not cooperate with the competent authorities in lawfully suspending the telecommunication of customers shall be ordered to rectify their behavior within a set period of time, and may be punished by a fine of 5,000 to 30,000 yuan.

If cases involving violation of the present Procedures shall be punished, according to law, by other administrative departments, they shall be turned over thereto by the Municipal Post and Telecommunication Bureau.

   Article 34 (Civil Liability)

Business operators of telecommunication who violate the present procedures and cause a loss to customers shall be liable to compensate for the loss and have other civil liabilities in accordance with the law.

   Article 35 (Administrative Reconsideration and Legal Action)

If the party concerned finds unacceptable the specific administrative act of the Municipal Post and Telecommunications Bureau, it may apply for administrative reconsideration or take legal action in accordance with the provisions of "Regulations on Administrative Reconsideration" and "Administrative Litigation Law of the People's Republic of China".

The administrative department that takes the administrative act may, in accordance with the provisions of "Administrative Litigation Law of the People's Republic of China", apply to the people's court for enforcement in case the party concerned neither applies for reconsideration, nor takes legal action, nor complies with the specific administrative act within the time limit prescribed by law.

CHAPTER V SUPPLEMENTARY PROVISIONS

   Article 36 (Application and Interpretation)

The Municipal Post and Telecommunications Bureau shall be responsible for the interpretation with respect to the application of the present Procedures.

   Article 37 (Date of Implementation)

The present procedures shall become effective on January 1,1996.