The policy will require websites that report regularly on Singapore news and have at least 50,000 visitors a month to obtain annual licenses, the city-state's Media Development Authority said in a statement yesterday.
They also will be required to remove content found to be in breach of MDA standards within 24 hours of notification.
"This is censorship, plain and simple," said Lee Kin Mun, a Singaporean social and political blogger who is more popularly known by his Internet persona, "Mr. Brown."
The MDA said the new policy, which takes effect Saturday, would place news websites "on a more consistent regulatory framework with traditional news platforms which are already individually licensed."
It said it would "impose financial penalties or suspend or revoke" the licenses of any websites that do not comply with any of the conditions.
The MDA singled out 10 websites, nine of which are state-owned, with the exception being Yahoo Singapore. It said the new policy also may be extended to netizen websites and foreign news sites covering Singapore news.
"Our mainstream media are subjected to rules. Why shouldn't the online media be part of that regulatory framework?" said Communications and Information Minister Yaacob Ibrahim.
"I don't see this as a clamping down. If anything, it is regularizing what is already happening on the Internet and making sure that they are on par with our mainstream media."
But The Online Citizen, one of the bigger netizen alternative news websites in Singapore, said it may shut down if the new licensing rules are imposed on it.
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