The number of Facebook users in China is dwindling. Or to be more exact: falling off a cliff. And not by choice, as anyone who has tried to access Facebook in China recently knows.

It’s no secret among people in the Internet business in China that Facebook was interested in the world’s largest Internet user population. But apparently–according to various parties that met with a delegation of Facebook officials some time in the last few years–they came, they saw, and they left Chinese social networking Web sites like Renren.com (formerly known as Xiaonei), Kaixin001 and 51.com to fight amongst themselves for the market.

Then, to the chagrin of both expatriate and Chinese users (the number of which appeared for a time to be growing), China’s censors blocked Facebook. Blocks of overseas Web sites such as YouTube.com are a fact of life here, barely acknowledged and never explained by the government. (Many of these sites actually matter very little to Chinese Internet users who have their own favorite Web sites to watch videos on.)

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When Jon Myers and partner Chuck Hootman created their first iPhone app, “Cornhole All-Stars,” their aim was to come up with a fun, casual game that would give them a foothold for their new game start-up JUFTi. The last thing they expected was to run into censorship troubles, which they did–in Canada.

Cornhole, also known as Bags or Baggo, is a popular game in some circles where players toss a bag–-traditionally filled with corn kernels–-into a round hole on a slanted board about 30 feet away. Myers’s iPhone app is a virtual version of the game, featuring cute animated characters in various settings.

Though the app was published on Apple’s (AAPL) App Store worldwide on August 1, the Canadian App Store would only list it as “C******e All-Stars.”

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Attempts to censor the Internet are spreading to Southeast Asia as governments turn to coercion and intimidation to rein in online criticism.

Malaysia, Thailand and Vietnam lack the kind of technology and financial resources that China and some other large countries use to police the Internet. The Southeast Asian nations are using other methods–also seen in China–to tamp down criticism, including arresting some bloggers and individuals posting contentious views online.

That is distressing free-speech advocates who had hoped that Southeast Asia–until recently a region where Internet use was relatively unfettered–would become a model of open debate in the developing world as its economies modernize.

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In the wake of the disputed Iranian election, American Internet companies including Facebook and Twitter have given Iranians an avenue to voice their opinions and to break through the wall of censorship their embattled government has built around the country’s traditional media. Now those companies–or others aspiring to help–may be given a boost from Uncle Sam.

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Google (GOOG) sometimes finds itself at a difficult crossroad of wanting to make as much information available to as many people as possible, while still trying to obey the laws of the countries they operate in. I recently had a chance to talk to Marissa Mayer, who started at Google as their first female engineer, and has now risen to the ranks of vice president in charge of some of Google’s most critical product areas, such as search, maps, and Chrome.

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Chinese authorities are having to grapple with more bad publicity for the “Green Dam-Youth Escort” software that Beijing wants to see included with all PCs sold in China from July 1.

Researchers at the University of Michigan have discovered major security vulnerabilities in the Internet filtering software, according to this report. The authors say that initial testing of version 3.17 of the Green Dam software found serious security holes, which the authors attributed to programming errors.

Worryingly, the report said that once the software is installed, “any Web site the user visits can exploit these problems to take control of the computer. This could allow malicious sites to steal private data, send spam, or enlist the computer in a botnet [a group of software robots that run without a computer owner's knowledge].”

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“The Internet represents freedom, but not everywhere.”

So begins the annual “Internet Enemies” report by Reporters Without Borders–and that’s probably the cheeriest line in the entire 39-page document. It goes down from there.

For the uninitiated, Reporters Without Borders is an anti-censorship watchdog organization. As blogs and news Web sites have grown in popularity, the group’s focus has similarly migrated to the Internet. Unfortunately, the report again paints a grim picture of Internet freedoms in parts of the world where it says the authorities regularly chuck bloggers in jail for online posts that displease the regime.

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When the Communications Decency Act (CDA) was enshrined into law with the passage of the historic Telecommunications Act of 1996, it contained a number of controversial provisions that covered “obscene or indecent” online content. But at the behest of ISPs and others concerned about the potentially stifling effects of possible obscenity suits on the still-young network, the CDA also included 47 U.S.C. Sec. 230, commonly known as Section 230, which shielded “interactive computer service providers” from liability for information posted or published by users of their systems.

Although the censorial elements of the CDA were later struck down by the courts, Sec. 230 protections were preserved, and even enhanced, during subsequent legal challenges. Other child safety-oriented laws that Congress passed, such as the Child Online Protection Act of 1998 (COPA), were also struck down as unconstitutional. Currently, therefore, “interactive computer service providers”–which has been interpreted broadly to include almost all types of online services, from ISPs to social-networking sites–are largely free from any liability associated with speech or content that some deem objectionable (e.g., indecent, harassing, defamatory, biased, etc.).

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There’s a famous saying by John Gilmore that “the Internet interprets censorship as damage and routes around it.” However, that saying may apply equally to other “damage” beyond censorship–and that includes spying, slow connections and many other things. In fact, with it being considered somewhat common knowledge that U.S. intelligence agencies frequently tap into Internet traffic coming through the U.S. from elsewhere, more and more countries are working hard to make sure their Internet traffic need not travel through the U.S. at all.

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New York Attorney General Andrew Cuomo announced on Tuesday that Verizon Communications, Time Warner Cable and Sprint would “shut down major sources of online child pornography.” What Cuomo didn’t say is that his agreement with broadband providers means that they will broadly curb customers’ access to Usenet–the venerable pre-Web home of some 100,000 discussion groups, only a handful of which contain illegal material.

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Internet censorship is practically synonymous with China these days. The Chinese government is often used as the poster child for restrictive governments that restrict the free flow of information to its residents. That could be why the International Olympic Committee (IOC) is getting antsy, as Beijing is bound by contract as this year’s Olympic host city to allow the press to report as usual during the games. And reporting as usual means unrestricted Internet access.

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Many foreigners who come to China for the Olympics will use the Internet to tell people back home what they have seen and to check what else has happened in the world. The first thing they’ll probably notice is that China’s Internet seems slow. Partly this is because of congestion in China’s internal networks, which affects domestic and international transmissions alike. Partly it is because even electrons take a detectable period of time to travel beneath the Pacific Ocean to servers in America and back again; the trip to and from Europe is even longer, because that goes through America, too. And partly it is because of the delaying cycles imposed by China’s system that monitors what people are looking for on the Internet, especially when they’re looking overseas. That’s what foreigners have heard about.

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