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In September we reported that China Telecom was looking to block eBay-owned Skype's VoIP service, worried about the threat to its own landline business.

Atlanta-based Verso Technologies' NetSpective M-Class software is capable of filtering out both VoIP calls and peer-to-peer traffic, in addition to providing bandwidth and content management tools.

'The trial is representative of the significant opportunities for Verso's products in the Chinese market, where VoIP is highly regulated and the use of Skype software has been deemed illegal,' said Yves Desmet, senior vice president, worldwide sales, Verso Technologies. 'More and more countries are following China's direction in evaluating the risks associated with the growing popularity of p2p communication such as Skype, due to intense security concerns with the use of this medium for unlawful purposes and its impact on carriers' revenues and the bottlenecks their networks are experiencing.'

He added that Verso's software also allows carriers to 'greatly limit unauthorised traffic as well as block potential hackers and viruses from impacting their network'.

The unspoken issue behind this is the continued suppression of free speech in China and the threat to state monitoring of phone calls posed by VoIP. A group of 25 social investment funds has called on Internet companies to stop supporting countries that do not guarantee freedom of expression

In a letter

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to leading Net firms the funds warned that 'some businesses help authorities in repressive countries to censor and mount surveillance of the Internet, and others turn a blind eye to the use made of their equipment'.

They call on Internet businesses to make information public that will allow investors to assess how they are acting to ensure that their products and services are not being used to commit human rights violations, including Internet censorship, surveillance and identification of dissidents.

'To help advance freedom of expression, the funds 'will monitor the operations of Internet businesses in repressive regime countries to evaluate their impact on access to news and information'.

The letter was sent at the instigation of Reporters sans frontières, freedom of the press campaigners who have tackled Yahoo!, Cisco and Microsoft over their activities in China, though it notes that the letter is not targeted solely at those three companies.

'There has been a great deal of comment of late about such cases as the Chinese journalist, Shi Tao, who got a 10-year prison sentence on the basis of information supplied by Yahoo !, and Microsoft's agreeing to censor the Chinese version of its MSN Spaces blog tool,' RSF said in a statement. 'But other companies participate in online censorship and surveillance in China. Google, for example, decided in July 2004 to exclude any 'subversive' website from the Chinese version of its news search engine.'

Yahoo! spokeswoman Mary Osako told Reuters that the company takes this issue 'very seriously'.

'While foreign-based companies must adhere to local laws in all the countries where they operate, we understand that there are unique and inherent challenges to doing business in China,' she said.