The development of the internet in Indonesia faces two major stumbling blocks. These are the Indonesian government and the stubborn incumbent telecommunication providers, Telkom and Indosat.
The government is stifling creativity, as it requires everything to be registered and licensed. Its policy lags behind developments and fails to provide the industry with a competitive safeguard. The government will not issue licenses for internet service providers (ISPs) using newer technologies for their connection. Small to medium enterprises, such as internet cafes, must also bear unofficial government taxes.
The government has also squandered a 1998 World Bank loan. Rather than investing in real infrastructure and things that actually help people to access the internet, the government has used most of the loan to pay international consultants to write pages of concepts, working papers, legislation and legal material. The necessity of this loan is questionable.
The government’s actions to protect the interests of the incumbent telecommunications providers are also impeding the spread of new technology. Telkom and Indosat have tried to use their power to distort the industry. They have overcharged for incoming call lines and frequently rejected applications for lines. Although a written complaint has been filed, the authorities have taken no action.
These telcos are also paranoid about internet telephony (also called Voice over Internet Protocol (VoIP)), which can be used to build a community based telephone network at very low cost. Government officials and the police are currently conducting unlawful ‘sweepings’ to seize ‘illegal’ VoIP and Wireless Internet equipments.
Under these conditions, it has been private sector investment and various sponsorships that have sustained the Indonesian internet. There is now a movement to develop a self-financed bottom-up internet infrastructure in Indonesia, using high-speed wireless internet technology. Money, technology and government help are not the keys. The dedication of many Indonesian volunteers driving community education processes is the most important factor in developing this infrastructure. These communities have only directly received a small fraction, if any, of the World Bank, IMF, and ADB funding.
