Indonesia may force Web giants to build local data centers
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Indonesia may force Web giants to build local data centers

US, EU object, say local centers threaten free information flow, reports Asia Sentinel

The Indonesian government could act as early as February on a long-feared threat to force electronic information providers including Internet search engine giants such as Google to begin building data centers in the country, critics say.

A statement by Nonot Harsono, a member of the Indonesian Telecommunications Regulatory Authority, that he doubted that the new regulation would force the Internet giants to build data centers hasn’t alleviated concerns.

The requirement to force the search engines to establish local facilities has to be seen as a part of the growing web of economic nationalist regulations being implemented by the government to circumscribe multinational activities across a wide spectrum of business operations. Earlier this week, the government threatened to enforce huge fines on multinational mining companies that do not build local smelters to process ore before it is shipped overseas.

The Technology and Information Ministry is circulating a draft regulating technical guidelines for the data centers, which according to the ministry’s chief of public relations Gatot S. Dewa Broto, “covers any institution that provides information technology-based services.” That theoretically includes hotels, banks and airline services as well as the search engines.

Indonesia is one of at least 13 countries across the globe that have implemented or intend to implement so-called local data server requirements, which the United States and the European Union object to as a threat to the free flow of lawful information which could “result in a slowing of technological innovation and prevent companies from offering certain products and services, consequently dampening economic growth,” according to the US-based Business Roundtable, an association of the chief executive officers of major US corporations.

Local data server requirements, the Business Roundtable said, “hurt economic productivity and dramatically undercut the efficiencies and scalability made possible by cloud computing and networked technologies.”

The issue came up in Jakarta as long as three years ago, when the government went after Research in Motion, Ltd., with a threat to force the manufacturer of the popular Blackberry smartphone to build a local data center. RIM refused, citing a threat to the confidentiality of information of its 5 million-odd users in the country.

Today the situation remains unclear. While Gatot told local media that the bill is expected to come into effect by mid-February, the draft is still under discussion. He declined to give further details. There are questions over the definition of providers of “public services,” which under the regulation are defined as government institutions, according to an analysis of the bill by the American Chamber of Commerce in Indonesia, or Amcham Indonesia, should mean government institutions.

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