October 23, 2001

Beijing, Oct. 23 (Bloomberg) -- China reimposed a ban on the Cable News Network's Web site just as the government granted its parent, AOL Time Warner Inc., the right to distribute Chinese- language television programs to a wider audience.

China, which limits domestic access to Web sites it deems politically sensitive, lifted the restriction during last week's Asia Pacific Economic Cooperation summit in Shanghai, which drew U.S. President George W. Bush and other world leaders.

Since the summit's conclusion on Sunday, users who have tried to access the Web sites of CNN or the British Broadcasting Corp. have been greeted by a message saying the page can't be displayed. The move underlines difficulty AOL faces in China balancing editorial freedom with business interests.

AOL doesn't plan to complain to the Chinese government about the ban on Web access. ''I'm not going to get into a discussion on what the Chinese government chooses to do with their regulations,'' said Carol Turner, a spokeswoman for AOL unit Turner International Asia Pacific in Hong Kong.

AOL said yesterday it received the right to broadcast in China in exchange for distributing China's English-language television channel by cable in the U.S. China Entertainment Television, an AOL station, will be carried by Guangdong Cable TV Networks Co., which serves southern China near Hong Kong.

Phoenix Satellite Television Holdings Ltd., 38 percent owned by Rupert Murdoch's News Corp., said last week it won the right to distribute programs to a wide audience in the same part of China.

Time Ban

China exercises broad controls over access to overseas media. Time magazine, another AOL Time Warner product, has been banned from Chinese newsstands since February after including a photograph of a Falun Gong leaflet in a story about the spiritual movement in Hong Kong. The Falun Gong is banned in China.

In addition to blocking some foreign Web sites, China also requires Internet chat rooms to be monitored by censors and over the summer closed down unlicensed Internet cafes. Domestic Web surfers seeking access to blocked sites must use third-party ''proxy servers'' or dial Internet access numbers overseas.

Wu Jichuan, China's Minister of Information Industry, hinted at an APEC form last weekend that China's weeklong foray into a more open World Wide Web would be short-lived.

While fellow participants AOL Time Warner Chief Executive Gerald Levin and Philippine President Gloria Arroyo touted the merits of an unrestricted Internet in fostering economic development. Wu took a different tack, emphasizing the need for government controls and ''digital security.''

Chinese restrictions on the foreign media can appear to be arbitrary.

Other sites that can accessed within China include IHT.com, the Web site of the International Herald Tribune, and NYT.com, the New York Times' Web site. The Times' site was blocked until after a recent meeting between President Jiang Zemin and senior executives at the newspaper, according to the Washington Post.

In addition, Time was allowed to distribute copies of the magazine to delegates at the APEC meeting.

Murdoch

AOL Time Warner, the biggest media company, is expanding its Internet operations as well as its broadcast business in China.

Confined until this year to broadcasts of CNN in foreign apartment buildings and luxury hotels, the company formed a venture in June Legend Holdings Ltd. It also hopes to start a China Internet service similar to America Online in the U.S.

Phoenix said it will now broadcast its Chinese Channel and movie channel on cable networks in the Pearl River delta area near Hong Kong. The company's programs are already widely distributed through so-called ''syndication'' by cable operators, skirting rules limiting foreign broadcasters' access.

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