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Monopolies curb innovation by adding fees

(Xinhua)

18:33, April 03, 2013

BEIJING, April 3 (Xinhua) -- In response to grumbles from China's monopolistic telecom operators, the country's industry regulator said last weekend it is possible that the operators will be allowed to impose fees on WeChat for signaling channel usage.

The move has caused quite a stir, with the vast majority of Chinese mobile Internet users, who enjoy using this free, user-friendly chat app developed by Chinese Internet giant Tencent, coming out in strong opposition. After all, they believe charges on app providers will inevitably be passed on to consumers.

At the heart of the issue lies the sentiment that monopolies are challenged and irritated by innovation. Regulators and telecom service providers are trying to defend the current monopoly by making a series of flimsy and flawed accusations.

It doesn't make sense to say that WeChat and other Over-The-Top (OTT) content services have generated too much data traffic and occupied much of telecom service providers' signaling channels, as the service providers allege.

Given equal market access, the ability to attract heavy data use partly reflects the competitiveness of the apps and their developers.

Currently, Chinese telecom operators do not charge for the use of the signaling channel. If OTT providers were forced to pay fees, would it mean they could get better services? And for those who say no, wouldn't that constitute unfair treatment?

Meanwhile, telecom carriers have never disclosed what preferential treatment they have given to their own apps. It is highly likely that they have moved to give special treatment to their products, as precedents show that unfair competition is prevalent under a monopolized market.

IT companies have struggled to grab a piece of a heavily monopolized pie. Their success is worthy of applause, not accusations.

Moreover, telecom service providers argue that their mainstay businesses are being crippled by OTT services like WeChat, which presents a false dichotomy.

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Email|Print|Comments(Editor:DuMingming、Wang Jinxue)

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