High-quality online video has been in high demand in China, and Chinese search provider Baidu is hoping to fulfill that need.
Baidu announced on Wednesday that it is creating an independent company to offer premium online videos to Chinese Internet users. The new entity is designed to work with content providers to supply copyrighted material, including movies, TV shows, sports, and animation, and it will generate its revenue through advertisements.
"As China's Internet industry evolves, we have seen increasing demand for high-quality video content on our search platform. By establishing this new company, we will be able to better serve our users and customers with superior content and focused resources," Xuyang Ren, Baidu's vice president of marketing and business development, said in a statement.
"Online video is a rapidly growing sector in China, and I believe Baidu's search platform will provide a solid foundation for the new company to address the increasing demand for premium content," said Yu Gong, former president and chief operating officer of China Mobile's 12580 hotline service, who is set to head the new venture as CEO.
Baidu, which has outshined Google's Chinese search engine to become China's top search provider, has been eager to get into the online-video business.
But video has long been a thorny issue in China, as the country has grappled with video piracy for years. DVDs of pirated movies and TV shows have been a lucrative business in the Chinese market, with obviously no compensation to the studios, networks, and other content providers. Pressure from the United States has pushed the Chinese government to try to crack down on the illegal trade. But the low cost and wide availability of pirated videos have kept it a thriving market.
Piracy has gone more high-tech in recent years. More and more illegal videos, including full-length movies and TV shows, have shown up on popular Chinese video-streaming sites such as Youku and Tudou. A group of content providers filed a lawsuit late last year against some of these Chinese sites, charging them with copyright violation, China.org reported. So far, the case has resulted in a legal judgment against Youku, ordering it to pay a small sum in damages.
TVs with Internet access have also become a new haven for video piracy, as Chinese users can now download illegal videos directly off the Web into their living rooms. The Google-funded service Xunlei, a Chinese peer-to-peer file-sharing service, has been the target of lawsuits, alleging that it distributes copyrighted movies and TV shows without compensating the studios or networks.
The Chinese government may be waving a white flag in response to all the criticism of its Green Dam filtering software.
Beijing won't force the widespread installation of the Internet filtering program on PCs and other consumer products, China's industry minister, Li Yizhong, said Thursday, according to a report in The Wall Street Journal.
The Green Dam interface. (Credit: University of Michigan)
In June, China said it would require that the Green Dam software be installed on all computers sold in the country by both domestic and foreign manufacturers. Since later that month, China has been delaying a permanent decision on whether to demand the software be preinstalled on all PCs.
According to the Wall Street Journal story, Li said that the intention was for the software to be installed voluntarily by individuals or their parents. He stressed that the program is intended to protect children from pornography and other harmful content and that attempts to politicize the issue or "attack China's Internet management system" are fanciful and irresponsible, the Journal reported.
China will still move forward with installing Green Dam in schools and Internet cafes across the country.
Since China announced the requirement of Green Dam, the software had been criticized on several fronts, putting pressure on the Chinese government to re-examine its decision.
In addition to protecting children from pornography, the filter was seen as a further attempt at censoring content objectionable to the Chinese government, also creating potential trade barriers and other headaches for PC manufacturers.
Experts also said the program is poorly developed and unsafe and would leave PCs vulnerable to hackers. One exploit popped up in late June that would allow attacks on computers outfitted with Green Dam.
China has indefinitely delayed enforcement of a requirement that PC makers preinstall Green Dam-Youth Escort software that experts believe would have screened not just Internet pornography but also some online political content.
Green Dam allows users to specify categories of sites to block.
(Credit: University of Michigan)The reprieve, announced by China's Ministry of Industry and Information Technology, according to reports in The New York Times and the Associated Press, came just one day before the preinstallation rule was to go into effect.
But thus far the reprieve appears temporary: the ministry said the delay will give computer makers more time to comply with the rule, and the government also will continue to equip school and cybercafe computers with the software, according to the New York Times report.
Experts have warned that the Green Dam software poses security risks, and last week, the U.S. Trade Representative protested that Green Dam violates World Trade Organization rules
PC makers had been cagey about their plans to comply with the rule to install the software. Technical and other objections must be weighed against business concerns, and China is a large and growing market. Companies that deal directly with Internet content have been in the hot seat for years, and Google has had to wrestle with new Chinese censorship requirements this month.
Updated at 2:20 p.m. PDT with comments from HP and Lenovo.
The U.S. Trade Representative has written a letter to the Chinese Ministry of Commerce asking that the country drop its requirement that all new PCs sold in China have special filtering software installed.
The letter was sent Tuesday by Trade Representative Ron Kirk and Commerce Secretary Gary Locke to the Chinese Ministry of Commerce, and expressed concern that the Green Dam-Youth Escort software required to be in all new PCs by July 1 violates World Trade Organization rules.
The Green Dam software is intended to keep children from accessing pornography online, according to the Chinese government, but the U.S., along with some technology companies perceive the requirement as further attempts at censorship as well as a trade barrier.
"China is putting companies in an untenable position by requiring them, with virtually no public notice, to pre-install software that appears to have broad-based censorship implications and network security issues," Locke said in a statement.
In the same statement, Kirk said, "Protecting children from inappropriate content is a legitimate objective, but this is an inappropriate means and is likely to have a broader scope. Mandating technically flawed Green Dam software and denying manufacturers and consumers freedom to select filtering software is an unnecessary and unjustified means to achieve that objective, and poses a serious barrier to trade."
U.S.-based trade associations representing the personal computer industry have already voiced their objections to the Green Dam policy. Dell, which has been ramping up its business in China over the last year, says it has made no decision yet about whether it will comply.
"Along with the rest of the industry, and relevant trade associations, we are reviewing the policy initiative and are working with government officials and others to understand its application," said company spokesperson Jess Blackburn.
Hewlett-Packard, the world's largest manufacturer of PCs, is also taking a wait-and-see approach. "HP is working closely with the trade industry association, ITI, to seek additional information, clarify open questions, and monitor developments on this matter," said a company representative.
Lenovo, the world's fourth-largest PC maker, which is based in China, also said it is still figuring out a plan, but hinted it might be prepared to comply with the Chinese policy.
"We are closely monitoring developments," a company representative said in an e-mail. "Lenovo sells in over 160 countries and in so doing we obey the law and abide by local regulations wherever we do business, and we will continue to do so."
In what amounts to a thinly veiled legal threat, the Chinese government has intensified its campaign against sexually explicit material online by instructing companies, including Google, to curb the availability of pornography.
Monday's announcement from a collection of seven government agencies singles out 19 sites as unlawfully providing access to "vulgar content." On the list: Google's Web search and image search, Baidu.net and the company's blogging site, and Sohu.net. (Google has denied any wrongdoing.)
The announcement from the State Council Information Office is billed as a "nationwide anti-crime" initiative, and urges the public to report illicit posts and Web sites. The state-controlled China Daily said that the companies named on the list "have been found to spread pornography and threaten youth's morals." It also warns that a regulatory crackdown may be coming.
While politically themed Internet censorship in China has received most of the attention--news sites and human rights sites are frequently restricted--the country's ruling Communist Party has long been interested in stamping out smut too. A CNET News article from as far back as 1996 said that Chinese Internet users were asked to "sign a set of rules that makes it illegal for users to produce or receive pornography."
More recently, the public security ministry said in 2007 that it would target porn, online strip shows, and even erotic stories. Some of the electronic barriers came down during the Olympics last year, only to reappear in the last few weeks.
Along the way, Chinese officials have made some bizarre statements. At an international Internet summit in Athens, a government representative told an incredulous audience: "I've heard people say that the BBC is not available in China or that it's blocked. I'm sure I don't know why people say this kind of thing. We do not have restrictions at all." (That statement would come as a surprise to Falun Gong practitioners.)
If this were simply political speech, no doubt members of the U.S. Congress would be tempted to convene ritual hearings where China, Google, and various other companies could be ceremoniously denounced in front of the cameras. But because we're talking about porn, a Senate resolution applauding China's censorial policies is probably more likely.
In a purported effort to cut down on "ID sharing" in Beijing's Internet cafes, the government will require that by the end of 2008, first-time visitors will have their picture taken and ID scanned before being allowed online, according to The Beijing News and the China Media Project.
Users were already required to show identification when they entered, a rule that has been spottily enforced at times but more strictly, by most accounts, since preparations for the Olympics began. David Bandurski at China Media Project writes:
The newspaper quoted Li Fei (李菲), a spokesperson for the Beijing Cultural Law Enforcement Agency, as saying the policy was aimed at preventing "ID sharing" (一证多用). The monitoring platform will allow enforcement officials to target any terminal at any Internet bar in the city to compare the user with registered information.
Perhaps this is indeed aimed at "ID sharing," but another piece that Bandurski quotes, an editorial in the China Youth Daily, sees the new policy as creating the potential for invasion of privacy.
In this monitoring system that renders users "naked," how will the freedom and privacy of citizens using the Internet be protected? The Beijing Cultural Law Enforcement Agency reassures us that these controls end with the enforcement team's monitoring platform and that we "have no need to be concerned about the leaking of personal information."
But aside from worrying that personal information might be leaked to others, we also worry that the freedom of our online communication and the privacy of our conversations will be betrayed by public power.
Under this platform of "monitoring of any terminal at any Internet bar in the city," won't monitoring mean that enforcement officials will have the right or the opportunity to view our chat histories? Can they not read our private correspondence at will? Won't any and all online behavior fall under the eyes of the enforcement officials?
If this is the case, then all Web users really are "entirely naked," if only before a limited number of enforcement personnel.
Read a fuller quote from the editorial in Bandurski's post.
q&a James Powderly didn't trek from New York City to Beijing during the 2008 Olympics to watch table tennis. The artist was plotting to laser-beam a billboard-size, pro-Tibet message at the Bird's Nest Stadium. Instead, he spent six days locked up and interrogated by Chinese police under conditions he likens to torture. He was joined by other American would-be protestors sentenced to prison without being charged of a crime, then released early following U.S. pressure.
The Graffiti Research Lab co-founder and former engineer has helped pioneer open source, digital graffiti techniques, like L.A.S.E.R. tag projections of words and icons onto public walls, as well as LED bulb "throwies" that stick to surfaces to spell out messages in light.
Originally Powderly was invited to participate in a show at the National Art Museum of China, until he says organizers, fearing political controversy, kicked him out. Instead, he collaborated with Students for a Free Tibet (SFT).
Powderly says his high-tech gear--including a cell phone, green laser, laser printer, laptop, camera, tripods--may have tipped off Chinese authorities. And he suspects that if Twitter stops working in China, you might blame him and his collaborators.
Some protestors were deported from China after this street protest outside the Olympic stadium. The message is made of LED "throwies," lights that stick to surfaces.
(Credit: Students for a Free Tibet)Q: The last time we were in touch, you'd mentioned the upcoming Green (Chinese) Lantern project, which you didn't detail for obvious reasons. What happened? How did Chinese authorities find out what you were planning to do?
Powderly: When I entered the country on the 15th of August I had a cell phone that might have already been compromised. It had already been used by protesters in the country...We don't know. They weren't telling.
It's safe to say I'm much more like Dr. Strangelove than like James Bond. I stick out like a sore thumb in Beijing. I'm about a foot taller than everybody. I'm wearing a fedora, camos, and sleeveless vest...
These people were still kind of bumbling but resourced and numerically outnumbered adversaries, in terms of the Chinese secret police. There are just so many of them and they're working with so much citizen support, meaning there are 300,000 people in the city just looking constantly and reporting, from taxi drivers to people on the street, undercover cops, policemen in uniforms, soldiers.
Whatever clued them into us, by the afternoon of the 18th I was being tailed by a woman. I spotted her, but I'm in a city of 20 million people. No way they're on me, I hadn't done anything. I was literally at the Wal-Mart superstore buying supplies..I doubted what I was seeing...
Powderly was among the would-be protesters detained in China without being charged of a crime.
(Credit: James Powderly)
What happened next? When did you know for sure? How were you arrested?
Powderly: I spent the day of the 17th scouting locations, buying a new laser printer. I went to kind of a safe house to build this laser stencil thing...They'd snuck a new laser in to me and I'd snuck in LED throwies for the LED banner for another group of activists...
I went to Tiananmen Square to scout that location because we'd planned to do two projection events. If we got away with the first one at the Olympic stadium, then we were gonna do the second one in Tiananmen Square...We were gonna project "Free Tibet" or "Tibet will be free" or "6/4/1989."
What worked and what didn't go forward?
Powderly: None of them worked. We did nothing. We were arrested and detained in China...for doing nothing except for thinking about it.
On the 18th...I did my one and only laser projection that evening out the window on some torn-down buildings...way out in the outskirts of Beijing, literally the last stop of the "One" line...It worked better than any had before, and I'd come up with a new technique for making the stencils to do transparencies with a normal laser printer.
I'd printed out one test message, a little computer inside joke, just the words: "Free Beer." It's a quote from a renowned hacker (Richard Stallman) that refers to free software...
... Read MoreJust days before the Olympic torch will reach Beijing, Internet leaders Google, Yahoo, and Microsoft say they are close to an agreement on a code of conduct for doing business in China and other countries that censor the Internet.
Sen. Dick Durbin on Monday released separate letters from the companies, stating they have "reached agreement on the core components of the principles" of the code, as Google put it.
Those components, the letters say, include principles for promoting freedom of expression and privacy, implementation guidelines, and an accountability framework. The specifics of the code are now being reviewed by the individual organizations involved. Google said the companies are working toward "a set of clear and rigorous principles, such that restrictive governments would be unable to ignore or reject these best practices on freedom of expression and the protection of individual privacy."
"This code of conduct would be one important step toward our shared goals of promoting freedom of expression and protecting the privacy of Internet users around the world," Durbin said in a press release.
The companies began work on the code, in conjunction with human rights groups, privacy advocates, and European companies Vodafone and France Telecom, in January 2007. A year earlier, politicians railed against the companies for complying with China's censorship practices. Yahoo was especially criticized for handing over the identity of journalist Shi Tao to Chinese officials, who sentenced the writer to 10 years in prison.
The impending Olympic games have increased questions about Internet censorship in China, especially after Chinese officials tried to block journalists there for the games from accessing certain sites, even after the Chinese government assured reporters they would have full freedom to search the Internet, unlike its citizens.
Google's letter said that the search giant will not provide the Chinese government with "any sensitive personal information regarding American athletes, journalists, and tourists who use the Internet while they are in China during the Olympics other than required by United States law." According to the Yahoo letter, CEO Jerry Yang personally asked Secretary of State Condoleezza Rice to bolster diplomatic efforts in the name of human rights, particularly before the Olympics. (The Microsoft letter is viewable here.)
The letters were addressed to Durbin, Chairman of the Human Rights and the Law Subcommittee, and Sen. Tom Coburn, the Ranking Member of the Subcommittee, after the senators inquired in a letter dated July 21 about the progress of the code of conduct. The subcommittee held a hearing on the issue in May.
Click here for more stories on tech and the Beijing Olympics.
Earlier this week we told you about the Bush administration opposing a bill that would slap extensive regulations on technology companies doing business in China and other nations deemed to be unreasonably "Internet-restricting."
That is likely to doom the legislation, which was written by Republican Rep. Chris Smith and enjoys the support of journalist and human rights groups.
We've now posted a copy of the U.S. Department of Justice's letter to Capitol Hill opposing the so-called Global Online Freedom Act. One key section of the proposed law limits the ability of U.S. companies to place servers with customer data in "restricting" nations.
(My colleague Charles Cooper and I also talked about the bill on our podcast, if you're interested.)
Some of the points that the Justice Department makes in its letter to Rep. Howard Berman, the Democratic chairman of the House Foreign Affairs Committee, include:
The bill talks about nations restricting Internet posting of "the "peaceful political, religious or ideological opinion or belief"--which would apply to much of western Europe, where making peaceful, political statements about the Holocaust that the government deems untrue can be a crime. (This is what ensnared Ernst Zundel, the neo-Nazi sympathizer who is serving a five-year prison term in Germany.)
Foreign nations could retaliate against the United States by ceasing to cooperate with law enforcement requests for information. "This could have the unintended effect of creating 'cyberhavens' through which terrorists and other criminals can route their communications, knowing that the data will not be turned over to the United States," the letter says.
American businesses could face retaliation directed against them as well by countries "sensitive to being perceived as 'second-class'" nations.
In addition, American businesses could be squeezed into the impossible position of trying to comply with two contradictory laws at once. "Even low-level data handlers...would be forced to choose between following the law of their own country and U.S. law."
The U.S. State Department also opposes it; here's an excerpt from its letter:
The Administration shares the view reflected in H.R. 275, the Global Online Freedom Act, that freedom of expression on the Internet must be protected globally. However, the bill's key provisions--calling for labeling Internet-restricting countries and penalizing certain affected U.S. firms in such countries--are likely to undermine U.S. diplomatic efforts and to interfere unjustifiably with such U.S. firms' commercial engagement in those countries. For these reasons, the Administration would oppose the bill, as reported to the House.
Taken together, these points raised by the pair of letters are not minor ones. They're carefully aimed at the heart of the bill. They appear to make it impossible to salvage its current approach, which tries to force U.S. Internet companies to accomplish what even the State Department has been unable to do.
No wonder that Berman told us through a spokesman that he wants to "carefully study" the "ramifications" of this bill--a response that glossed over the fact that his committee painstakingly assembled a formal report and voted to approve it months ago. Still, better late than never.
This legislative exercise shows that it's easy to throw around insults, as the late Tom Lantos liked to do when executives visited from Silicon Valley. It's easy to speechify about morality. But actually writing legislation that makes sense--and complies with the demands of the U.S. Constitution, which does not seem to give Congress the authority to legislation in this area--is far more difficult.
Editor's note: Updated at 5:50 a.m. PDT with comment from Yahoo.
A proposed federal law that would slap extensive regulations on technology companies doing business in China and other nations deemed to be unreasonably "Internet-restricting" is facing an uncertain future due to opposition from the Bush administration and telecommunications providers.
The House of Representatives bill says that search engines, Web e-mail services, and other Internet businesses may not place servers with user account information in those nations. Any "aggrieved" person anywhere in the world would have the right to sue U.S. companies in federal court.
It's no surprise that technology companies have not exactly applauded the Global Online Freedom Act, which also would require them to disclose censorship pressure from allegedly repressive regimes. Microsoft, for instance, has said that no new laws are necessary.
With public concern about human rights in China growing in advance of the summer Olympics, spurred along by trade and currency concerns, the uprising in Tibet in March, and a Senate hearing last week with executives from Yahoo, Google, and Cisco Systems, it seemed possible that Republican Rep. Chris Smith's proposal could become law this year. It already has cleared the hurdles of three House committees, thanks in part to enthusiastic support from the late Democratic Rep. Tom Lantos, and is awaiting a floor vote.
But stiff opposition from the U.S. Department of Justice--plus telecommunications companies that are concerned about the wording of the latest draft of the bill--is likely to imperil the legislation. In addition to the Justice Department, the U.S. State Department has sent a letter to House Foreign Affairs Chairman Howard Berman saying the bill would affect broader policy issues.
The State Department agreed to provide CNET News.com with a two-paragraph excerpt from that letter, which reads in part:
The Administration shares the view reflected in H.R. 275, the Global Online Freedom Act, that freedom of expression on the Internet must be protected globally. However, the bill's key provisions--calling for labeling Internet-restricting countries and penalizing certain affected U.S. firms in such countries--are likely to undermine U.S. diplomatic efforts and to interfere unjustifiably with such U.S. firms' commercial engagement in those countries. For these reasons, the Administration would oppose the bill, as reported to the House.
Meanwhile, a letter to Berman from the Justice Department dated May 19 that News.com obtained says:
The department foresees the potential to thrust United States businesses into an environment of conflict of laws and to create significant difficulties for the department in the administration of the bill's requirements, thus seriously compromising the attorney general's ability to work with foreign law enforcement agencies in an atmosphere of cooperation. Additionally, certain of the bill's provisions raise constitutional questions to the extent they would operate to constrain or jeopardize the president's ability to conduct foreign diplomacy, and to the extent they would operate to regulate the content of U.S. firms' expression in a manner vulnerable to First Amendment challenge.
Moreover, the bill's approach for securing personally identifiable information is one which the United States would likely not countenance if it were applied by foreign entities operating in the United States pursuant to the dictates of foreign law. Consequently, it is the department's view that the restrictions imposed by the bill may have the unintended effect of prompting foreign countries to preclude United States business from operating in their territories...The department opposes the bill as drafted.
Justice Department spokesman Erik Ablin said on Friday that no response had been received from Berman's office. Berman's press secretary told us in e-mail that: "This is a very important bill. Howard wants to carefully study its ramifications and so he is meeting with both the human rights groups and the business groups in that pursuit. He'll want to finish that process before he comments on the DOJ letter."
A report from Berman's committee cites, as justification for the legislation: "American companies have disclosed to security forces in repressive regimes the content of private communications and the identity of their Internet customers, sometimes leading to the arrest and conviction of political dissidents. In some cases, this cooperation has been done willingly and for profit. In others, it has occurred in response to subpoenas or due to the fear of sanctions imposed by local law."
For their part, human rights and journalists' advocacy groups generally support the Global Online Freedom Act. In March, they sent a joint letter saying they strongly support the measure because "decisions about what information can be disclosed would be made by the U.S. government, removing this burden from the companies involved" and that it should be enacted before the Beijing Olympics. It was signed by Reporters Without Borders, Human Rights Watch, the Committee to Protect Journalists, PEN USA, and the World Press Freedom Committee.
The letter points to the case of Shi Tao, a political dissident in China who in April 2005 was sentenced to 10 years in prison for "divulging state secrets." Shi Tao had e-mailed foreign reporters; the Chinese government tracked him down because Yahoo's Hong Kong China subsidiary in Beijing supplied an IP address.
Internet companies have had mixed responses to the Global Online Freedom Act, often declining to take issue with it publicly for fear of drawing criticism or attracting more attention to the legislation.
Cisco says it hasn't "taken a formal position" because the bill could change and it will "examine" the final language.
Google spokesman Adam Kovacevich pointed us to a statement from last week and added: "We support the Global Online Freedom Act because of our deep belief in and commitment to Internet freedom. We believe that this legislation can be improved further to help ensure that people around the world have even greater access to as much information as possible, and we will be sharing our thoughts with Congress in the weeks ahead."
Excerpt from revised draft of Global Online Freedom Act that targets "Internet communications services."
Kovacevich would not elaborate on what improvements Google wanted to see made to the bill.
A Microsoft spokeswoman said her company would still prefer not to see legislation in this area.
Yahoo spokeswoman Tracy Schmaler said the company supports some of the "key principles" of the bill, such as creating an office within the State Department charged with leading the way against Internet censorship. But the company continues to negotiate with members of Congress to come up with a version "that will help create a better environment for online freedoms without preventing companies from engaging in these emerging markets," she said.
One recent source of opposition came from Internet service providers, who have told Berman they are alarmed at a blanket of regulations aimed at covering U.S. companies providing "Internet communications services." That term does not appear in the version of the Global Online Freedom Act posted on the Library of Congress' Thomas Web site; it does, however, appear in a subsequent version that has not been publicly circulated.
News.com's Anne Broache contributed to this report.
Update 5/28 1pm PT: Fixed name of Yahoo's subsidiary




