Back in 2008, we wondered how long it would be until the Chinese government looked to crack down
on VoIP providers like Skype, as it was becoming clear that a larger and larger number of folks in China were starting to use Skype for international calls (especially to Taiwan). It appears that may be happening, as the Chinese government has made it clear that it believes most VoIP networks are illegal
, and it plans to crack down on them. The reason for such a ban is generally as a protectionist move, helping state sponsored telcos -- who return the favor by letting the government spy on calls (something Skype does not allow). Of course, as we've seen in other countries that have implemented Skype bans, including Bangladesh
, the end result of these kinds of bans can be supremely counterproductive
for the local economy. It's not hard to realize why: cheap phone calls enable all sorts of other businesses to do things cheaper and open up new possibilities, like overseas call centers. Expensive phone calls make business more expensive and difficult. So, in protecting the local state-supported telcos, these efforts tend to do a lot more harm than good.