In anticipation of the country's expected World Trade Organization (WTO) accession, the deregulation process is to be accelerated to allow in more local investors, industry experts said.

"We must adapt to the situation of globalization and international competition in the telecom sector, deregulating services as far as possible," said Liu Cai, director general of laws and regulations with the Ministry of Information Industry (MII).

Liu, addressing at a US-China Telecom Regulation & Policy Forum last week, said the competition in the country's telecom market has taken shape.

Through a one-year effort, the State divided the monopoly China Telecom into four independent parts earlier this year, resulting in six national-level operators in basic telecom service.

While industry experts debated the justice of the largest reorganization project ever in the telecom sector, US giant AT&T's announcement of a new break-up scared the industry.

AT&T, breaking itself up for the third time since 1984, announced on Wednesday it would create four distinct entities, including an independent cable company and an independent wireless company, all operating under the AT&T brand name.

Industry experts, citing the AT&T case, said that China's telecom sector has more capacity to introduce new service operators in value-added telecom business, IP service and data transmission.

However, China long-existing regulatory walls ban other businesses from conducting telecom-related services.

Disputes between telecom operators and cable TV carriers are inevitable as both try to wade into one another's turf.

"Cable carriers are allowed to provide telecom services, but they need a license," Liu said.

Licensing would continue to keep would-be competitors away from telecom penetration without a tough government intervention.

Robert Pepper, head of the Office of Plans and Policy Federal Communications Commission with the US Government, said that it's time to begin deregulating the dominant firms when new services begin to compete.

"Do not automatically impose old rules designed for monopolies on new services and entrants," Pepper said.

Two newly-released landmark regulations have, to some extent, created a favorable policy environment for the further development of the emerging telecom and Internet markets.

Although the regulations of telecom and Internet content management still need to be modified, industry experts hail the publishing as a milestone in the information technology industry which had never embraced a national law or law-effective regulation in the past half century.

The Telecom Regulation, for the first time, clearly decrees that both foreign and non-governmental investors are allowed to invest in the Internet and telecom businesses.

"In accordance with the new regulations, investors outside the telecom sector have the opportunities to provide new telecom services for the public," Liu said.

(China Daily October 29, 2000)