China proves federal Internet regulations fail

Freedom New Mexico

Why is it important to condemn government regulation of the Internet? You don’t have to look much further for an answer than China’s latest battle to preside over the “World of Warcraft” computer game.

In a power struggle of galactic proportions, two bureaucratic Chinese government agencies are squabbling as to which is entitled to regulate the ultrapopular online fantasy role-playing game “World of Warcraft,” or “WoW.”

China’s General Administration of Press and Publication, said that WoW’s creator, California-based Blizzard Entertainment, was to stop registering game users because the proper paperwork was not filed to operate the game in China. But the rival Ministry of Culture rejected the statement made by GAPP and claimed the ministry was, in fact, the rightful regulator of online games, and that all of WoW’s paperwork had been filed and was in order.

The squabble may seem inconsequential, but it gives a rare glimpse into the power dynamics of invasive governments — and why the stakes are so high. Chinese regulators are interested in “WoW” not because they worry about the content being bad for the Chinese people, but instead because it is a cash cow with a reported 11.5 million players worldwide. And whichever agency regulates the game gets the clout and increased budget that comes along with regulation.

To the regulatory victor goes the regulatory spoils.

Games and entertainment are the biggest draws for the more than 338 million Internet users in China (more people than U.S. population).

Many analysts see the numbers of online gamers jumping in the country and predict the online gaming industry in China will grow 30 percent to 50 percent this year. With such growth, the agency regulating gaming would be granted additional administrators and a larger budget, which is why two bureaucracies might go to the mat over the right to regulate an online fantasy game. Bureaucrats are positioning themselves for a piece of the pie.

This internal bureaucratic conflict highlights the serious problems that emerge when government overreaches into the marketplace and, more specifically, the Internet. Enticing bureaucracies with power, money and larger staffs for meddling with industry only encourages overregulation, overreaching and fuzzy jurisdiction parameters. In this case, two agencies have gone rogue to make a power grab.

It reminds us of the distinctions that the late Nobel laureate economist Milton Friedman made between capitalism and communism when he asked why communism, a system motivated by power, was preferable to capitalism, a system motivated by earnings.

Congress should look at these and other examples in China when deliberating Internet regulation. Keeping the Internet free and uncensored is crucial to a free, democratic society.