Web Giants to Build Data Centers in Indonesia?

By Vanesha Manuturi & Basten Gokkon on 09:38 am Jan 15, 2014
Category News

Internet search engine giants Google and Yahoo may have to start building data centers in Indonesia as early as next month, if a draft regulation by the Technology and Information Ministry becomes effective.

The draft, which regulates technical guidelines for data centers, is the last set of rules needed to implement a government regulation designed to uphold the country’s sovereignty over its citizens’ data.

“The draft covers any institution that provides information technology-based public services,” the ministry’s chief of public relations, Gatot S. Dewa Broto said in Jakarta on Monday. “Aside from search engine giants like Google and Yahoo, the bill also pertains to hotels, banks, and airlines services,” he said.

It also forces these companies to set up disaster recovery centers in Indonesia.

A public hearing on the bill ended on Tuesday and this will be followed by an internal discussion next week.

Gatot said he expected the bill to come into effect by mid-February, but declined to give further details as the draft is still under discussion.

The draft contains technical matters related to data centers, including building and architectural design requirements, Gatot said.

Under a 2012 government regulation regarding electronic system and transaction management, all providers of public online services have to provide data and disaster recovery centers on Indonesian soil.

According to a 2009 public service law, a public service organization is defined as any state institution, corporation, or independent organization established to provide a public service, and any legal entity established solely for public service activities.

According to Nonot Harsono, a member of the Indonesian Telecommunications Regulatory Authority (BRTI), the draft ministerial regulation should also include the protection of customers’ privacy.

“The public hearing was aimed at informing stakeholders, nongovernmental organizations, and individuals about the regulation. Customers can make an input so that the regulation can protect their privacy,” Nonot told Jakarta Globe on Monday.

But Nonot said he doubted that the new regulation would force Internet giants such as Google and Yahoo to build data centers in Indonesia.

“The new regulation is part of the ITE [Electronic Information and Transactions] law, which only controls online transactions. But Google and Yahoo do not provide such services,” he said.

Nonot said the ministerial regulation is not enough if it is based on ITE law, it should also be based on national security protection law, which is currently being drafted.

For its part, Google Indonesia said regulations on local data centers for foreign content providers was not yet feasible.

“Based on the definition, can an over-the-top provider like Google be categorized as a public service institution?” Shinto Nugroho, Google Indonesia’s head of public policy and government affairs, told Investor Daily last week.

Shinto also noted the country’s inability to provide massive amounts of electricity required to power gigantic data centers such as those operated by Facebook, Google and Yahoo. Facebook’s server farms in the United States alone used 673 million kilowatt hours in 2012. That was equivalent to 0.5 percent of Indonesia’s power production in the same year.

“It’s not only about the clarity of the rule, they should also consider how the rule can be implemented,” Shinto said.

Nonot said the Indonesian government and companies should find a way to reach “mutual respect and mutual benefit.”

“Companies would definitely consider financial matters, but that shouldn’t be a such a big burden for them if they respect our country,” she said.

Despite some reluctance on the issue, both Nonot and Gatot voiced optimism that the Internet giants will cooperate, keeping in mind the number of Indonesians using Google and Yahoo services.

Meanwhile, institutions that already have data centers in Indonesia will need to meet the technical standards listed in the bill. But Gatot said the content would be adjusted according to each sector.

Many companies are investing in data centers in Indonesia, which is experiencing rapid growth in the number of Internet users.

Content providers, which rely on data centers, are racing to tap into the rapid growth in information streams, including social media and mobile applications.

Multipolar Technology, a listed information-technology company, is spending $100 million to build a data center in Cikarang, West Java. The data center will cover an area of 12,000 square meters and is scheduled for completion this year.

  • Troublemaker

    Just another way Indonesia has it’s hand out….

  • Hypocrite Buster

    Another cheap trick to provide jobs and develop the economy at the expense of others, preferably foreigners. It won’t work, nothing like creating an innovative, educated, enterprising and corruption-free environment.