Chinese officials and media are warning of a crackdown on "illegal" Internet telephony services, like those provided by Skype, that are not licensed or approved by the country's powerful telecoms regulator.
"We are currently working together with relevant departments to launch a crackdown on illegal voice-over-IP (VoIP) telephony," Beijing's ministry of industry and information technology (MIIT) said in a statement carried on its website.
"We are looking to recruit members of the public who have clues in cases of illegal Internet telephony," said the statement, dated Dec. 10 but featured prominently in official media reports on Friday.
The statement provided a hotline number for anyone wanting to report information to the authorities.
Lucrative
The ministry's move is seen by some as a means of protecting the lucrative international call business of China's state-owned telecom operators.
Others have speculated that the government is also concerned that high-level encryption on VoIP services such as Skype make calls too difficult for the authorities to monitor.
Skype has been a popular tool with activists and others who want to share information relatively freely, getting around the complex system of blocks and filters known collectively as the Great Firewall (GFW).
Gong Shujia, an expert in electronic communications at George Mason University, said the fixed-line service providers find it very hard to compete with the Internet-to-phone services.
"If you have a fixed-line telephone in your home, that'll cost you 30-40 yuan per month, whereas if you use Internet phone services you will only spend 2-3 yuan per month," Gong said.
Important factor
But he said profits are not the only concern behind Beijing's planned crackdown on Internet telephony.
"There are two issues here. One is the issue of the profits of the telephone service providers," Gong said.
"The other is that any information sent as speech over these networks ... is already encrypted when it leaves your computer."
"Even if someone was listening in, they wouldn't be able to hear the sound, so I think that is also another important factor [behind this decision]," he added.
Officials have so far declined to clarify the implications of the message for specific services.
But the Beijing Morning Post on Thursday quoted MIIT vice-minister Xi Guohua as saying that only state-owned major Chinese telecommunications operators are licensed to provide Internet phone services linking telephones and computers.
Discounted rates
Beijing officials have made similar statements in the past, and have also declined to clarify their implications for services such as Skype.
However, Xi said communications between computers (PC-to-PC) remain open to China's 450 million Internet users.
Currently, Skype operates both PC-to-PC calling services, which are free, and PC-to-phone services which enable users to dial international phone networks from their PC at discounted rates.
The ministry has previously said unlicensed VoIP services are illegal, but has declined to specify what action would be taken.
The Beijing Morning Post cited the case of UUCall, a homegrown VoIP service which calls itself "the first Chinese Internet phone brand," which was shut down in October 2009.
UUCall resumed business in February after moving its domain name to Hong Kong, the paper added.
"Not banned"
Netizens hit back at the proposed ban, complaining that VoIP is a public good that should not be declared illegal.
"What benefits people is not legal. I really want to curse out loud," one angry user said.
Skype told Bloomberg on Friday that its services in China remained operational.
“Skype is not banned,” Jennifer Caukin, a Palo Alto, California-based spokeswoman for the service provider, said in an e-mail to the financial news service.
“Our users in China currently can access Skype via Tom Online, our majority joint venture partner.”
Reported by Shi Shan for RFA's Mandarin service. Translated and written in English by Luisetta Mudie.