August 04,2008

First Chinese State Telecoms Monopolist Sued for Residence Discrimination

By CSC staff

On August 1st, the very day the Anti-trust Law came into force, the Beijing Branch of China Netcom (Beijing Netcom) was charged with monopoly.

On the morning of August 1st, Li Fangping, who is currently living in Beijing but is not a permanent resident of the city, submitted a plea to Chaoyang District Court, Beijing, charging Beijing Netcom of user discrimination.

Li Fangping said that according to the policy of this company, non-permanent residents applying to install a fixed-line phone should have a Beijing resident as guarantor, or pay telephone bills in advance. Li Fangping, unable to find a guarantor for himself, had to choose the prepayment service. However, users who are permanent residents of Beijing can choose to pay their telephone bills after making their calls. For Li Fangping, this is a sheer discrimination, preventing him from enjoying some favorable treatment and discounts, such as the "Family Member Service".       

The customer service department of Beijing Netcom admits that there are some differences between the treatment of users choosing prepayment services and those choosing post payment services. It also confirmed that non Beijing residents have to go through more complicated procedures when applying for post payment services, for example, they need to provide a guarantee or a certificate of property ownership.

"Prepayment service is a new business. Due to the limited capacity of the current platform, we chose to carry out a pilot operation among non-residents. This is because non-residents move more frequently and it is hard for us to get the telephone fee if they refuse to pay the bill. So we have to ask them to pay the telephone bill in advance. This has nothing to do with discrimination against non-residents," explained Beijing Netcom.

According to Li Fangping, Beijing Netcom, as a telecom monopolist, maintains the discrimination against non-residents by declaring that the company has technical difficulties in improving its platform, or has purposely delayed the upgrade to its system. Its behavior has violated Civil Law principles, which are fairness, equal value, and honesty, and it also perfectly meets the definition of monopoly according to the Anti-trust Law.

So Li Fangping sued Beijing Netcom on the first day the Anti-trust Law came into force, requiring the court to make a ruling that the format of the contract and service announcement for the "Family Member Service" of Beijing Netcom, involving resident discrimination, are illegal, and that Beijing Netcom should provide him with the "Family Member Service", and pay one yuan to him as compensation.

Li Xiongbing, Li Fangping’s lawyer, supposes that Beijing Netcom may be worrying about users owing telephone fees. However, he believes that it is not fair to rate user credit by whether they are permanent residents of Beijing and that the company could measure their credit in other ways.

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