Censorship is the new currency devaluation and the idea of censorship as an unfair trade practice is quickly gaining ground. This inside-the-beltway discussion has shed its wonkish handcuffs and managed to shine a harsh light on the economic impact of policies that curtail the free flow of information; attention has been especially focused on the ways in which China's system of information control harms American business.
The discussion is fueled by China's censorship policies; however, an important (Chinese) government regulation has gone completely unreported. This regulation strikes at the heart of our notion of "free flows of information" and has huge implications for governments, business, and academics alike: for many university students in China, information from abroad is, quite literally, not free.
In 2003, the China Education and Research Network (CERNET), the "fat pipe" all Chinese universities use to connect to the Internet, instituted a data fee for access to internationally hosted websites. CERNET didn't pull any punches when describing its motivation: "[I]n order to encourage domestic communications," the regulation reads in Chinese, "a fee for international data downloads will be instituted while domestic data downloads will be free."
While this policy has been implemented inconsistently across institutions, many Chinese universities pass the "international data download fee" onto users of the network, the majority of whom are students of limited means. For example, the prestigious Peking University, Tsinghua University, and Fudan University each charge students for access to international websites, as do many lesser-known institutions.
The international data fee does not apply to every foreign website; a small number of foreign sites can be accessed for free. Each month, CERNET announces a few newly "white-listed" IP addresses, usually corresponding to the websites of research services like JSTOR and Lexis Nexis; Google.com was white-listed in 2005. But visiting other information portals - like The New York Times, Wikipedia, The Journal of Infectious Diseases, or even international databases of graduate theses--incurs a long-distance fee.
China isn't the only country where international and domestic bandwidth are sometimes priced differently - South African ISPs, for example, have long used tiered pricing to ration the country's scarce international bandwidth - however, China is rare in instituting a pricing structure whose prima facie purpose is the promotion of domestic business over foreign competitors.
Call It "Data Protectionism"
For American businesses, data protectionism translates into lost customers. That is, unless these businesses decide to set up websites within China's walls and play by China's rules. Companies that refuse to engage in self-censorship risk losing their website and business license. The math here is easy: the only way to bypass such economic strong-arming (and other impediments to foreign websites imposed by China) is to agree to censorship demands.
For a government that has long feared politically aware students, pay-per-view access to foreign ideas also serves as a convenient way to "prevent the infiltration of harmful information from overseas" while allowing the government to avoid accusations of widespread censorship. As China's future business, government, and thought leaders develop research and communication habits that will last long after they leave academia, many are acclimating to a pseudo "intra-net," one devoid of much of the world's knowledge.
Meanwhile, data protectionism has a systemic impact on Chinese institutions. For China's expanding academy, the potential to contribute to global knowledge is curtailed by a cost structure that discourages utilization of global resources; some university libraries even classify research databases and websites by whether or not the services are subject to the international data download fee. Data protectionism hurts those Chinese students who are hoping to enter an international workforce; they must compete with foreigners who have long had the world's information at their fingertips, without additional economic barriers.
Tiered pricing may be a necessary - though unfortunate - policy choice in nations with severe bandwidth limitations. But in China, data protectionism has been implemented specifically to exclude international voices.
Like more traditional forms of censorship, data protectionism restricts the unique potential of the Internet to facilitate the free flow of information and the spread of ideas across boundaries. It presents a barrier to international trade and creates a problematic precedent as other regimes, like Vietnam and Iran, look to China for tips on information control. So as policy makers continue to investigate barriers to the information economy, they should not forget the impact of data protectionism and the importance of ensuring global flows of information remain free.