China compliance primer

Circular [2017] No. 32, on cleaning up and regulating the internet access service market, as published, says that companies may not, without approval, set up or lease cross-border dedicated lines to run cross-border business. It was issued by the Ministry of Industry and Information Technology (MIIT). As we read it, the notice is aimed at commercial operation without the required approvals, not at every international connection a company uses. It also covers IDC, ISP and CDN licensing, resale of access resources, and lines that connect domestic and overseas data centers or business platforms to conduct telecom business.

Under the notice, basic telecommunications operators that lease international private lines are required to keep records of their users and tell them that the lines are for internal office use only. In practice the line typically has a named user, a stated internal purpose, and a carrier-side record. In our reading, it is not a general-purpose internet service that the customer can resell or use to serve third parties.

We read the notice as a compliance boundary, not a product ban. The questions it raises are who holds the line, what the line is used for, and whether the traffic is internal. A route assessment should answer those questions before it compares bandwidth, because a line that fails the use test will not be fixed by a better handoff. See the MIIT entry for the regulator's role.

Our reading of the notice: it does not create a general authorization for a private line. It sets a condition: the line must be approved where approval is required, and its use must match the internal-use statement. The carrier's record is what makes that condition visible, so the customer's description and the carrier's file need to agree.