Two brothers who run a modest electronics shop in a village in Fujian have become the champions of mainland consumers in the battle for cheaper and more efficient telephone services against the mighty Ministry of Information Industry (MII). For two months at the end of 1997, customers at the shop of Chen Yan and Chen Zhui in Tingjiang, a village of 10,000 people 30 kilometres south of Fuzhou, the provincial capital, were able to call relatives in the United States for six yuan (about HK$5.58) a minute via the Internet, a third of the 18.4 yuan charged by China Telecom. At the behest of China Telecom, police in January last year shut down the service and confiscated the Chens' computers and telephone equipment. But, in a rare legal decision against a rich and powerful ministry, a Fuzhou court on January 21 ruled that the brothers had been doing nothing illegal. The case is far from over. It has gone back to the local court and the Chens have not been given back their equipment and computers, nor the 50,000 yuan their families had to pay to obtain their release from police custody. The MII has reacted with fury to the court ruling, saying that international telecommunications remains a state monopoly. It has threatened to initiate legislation to prevent private Internet telephone services. Few people expect the Chens, and others who want to provide such services, to win this battle, especially as the ministry, which passed a regulation last September outlawing them, wields enormous influence in Beijing. The Chens caught the Internet bug in 1996 and in September 1997 began the telephone service as a sales incentive. Customers were given five minutes of free telephone time. Tingjiang is an area from which thousands have emigrated to the US so many residents have a relative there. The service proved very popular, with those who talked for longer than the free time paying six yuan a minute. 'We had about a dozen callers a day, but not many people knew about it,' Chen Zhui said. He did his best to register the service but could not. The local telecom bureau said the operation fell outside its authority, and the Industrial and Commercial Bureau refused to give him a licence without a letter from the telecom bureau, which would not issue one. The service ran for only two months, until December 22, 1997, when it was closed after a warning from the local telecom office. On January 7, the police detained Chen Yan and in the evening confiscated the computers and equipment, saying that the brothers were operating an illegal business. Chen Zhui was also detained and was released only when his family paid 20,000 yuan. His brother's freedom cost 30,000 yuan. The two last May filed a claim with a local court, saying they had done nothing illegal and that the police had misused their powers and illegally confiscated their belongings. The local court ruled against the brothers, who in July appealed successfully to a higher court in Fuzhou. While things are changing rapidly on the ground, the debate in the corridors of power in Beijing remains unresolved. One telecom consultant said: 'All the ministries except the MII want liberalisation and lower prices. 'At a recent speech at the Central Party school, Foreign Minister Tang Jiaxuan complained about the huge gap in the cost of international calls abroad and at home. 'Lower prices would mean savings for all departments and stimulate the economy in general. But MII Minister Wu Jichuan has strong arguments too, saying it is not an issue of money but of sovereignty and security.' Mr Wu also argues that high charges for international calls and installation fees were needed to fund the rapid expansion of the network into rural areas. He said Prime Minister Zhu Rongji stood in the middle of these arguments, sensitive to the issues of sovereignty and security but wanting more competition, better service and lower prices, with a single network under government control but several operators. Mr Zhu is also keen to see the mainland enter the World Trade Organisation within his five-year term. Without concessions on telecoms, or at least the promise of them, this would be impossible.