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The Chinese government’s Ministry of Industry and Information Technology announced today through the Xinhua news agency that there would be an indefinite delay in the enforcement of a rule requiring the installation of Internet filtering software Green Dam-Youth Escort on all new computers sold in the country. The rule was to go into effect tomorrow.

Green Dam was officially described as an application to protect children from harmful content on the Internet. Researchers, however, discovered that two thirds of the “harmful” terms it filtered had political connotations.

The Chinese government will install Green Dam in school and Internet cafe computers after tomorrow. It also will provide free downloads for anyone who wants it, Xinhua said.

The filtering software has drawn fire from many quarters:

— China only notified PC makers of the regulation on May 19 and only made the edict public in June. Many manufacturers said they couldn’t comply with the July 1 deadline in such a short time.

— Solid Oak Software of Santa Barbara said that code from its CyberSitter software was used extensively in Green Dam-Youth Escort and sent cease-and-desist letters to U.S. PC manufacturers to stop them from installing Green Dam. Solid Oak said it would launch lawsuits in the U.S. and China July 1.

— Jinhui Computer System Engineering Co. of Zhengzhou, the company that won the Chinese government’s $6 million contract to write the application, has received more than a thousand harassing phone calls, including late-night death threats.

— Jinhui patched one vulnerability in Green Dam, but the application remained open to remote exploitation and a working exploit was published on the Internet.

— The U.S. protested that installation of the application would violate China’s agreement with the World Trade Organization.

— Leaders of 22 international business groups last week notified Chinese Prime Minister Wen Jiabao that Green Dam was a threat to privacy and free speech and hardly in keeping with China’s “professed goal of building an information–based society.”

— The European Union also protested to China, saying that the Internet filter was designed to limit free speech.

For news coverage, link here.

Tom Kelchner