T

he Communications and Information Ministry on April 29 opened itself up to public feedback regarding a new regulation it had drafted relating to the provision of content and application services over the internet, better known as “Over the Top” (OTT) services.

The public consultation period for the draft OTT regulation, which lasted for four weeks ending on May 26, provided relevant stakeholders, particularly those from the private sector, with the opportunity to submit input and comments.

Public consultation, carried out by the government, is neither novel nor special. They are typically obligated for higher level regulations, not for ministerial level regulations such as the draft OTT regulation. In that regard, the fact that one was called for the draft OTT regulation is uncommon, but very much to be welcomed, particularly when it comes to a sector as central and pervasive to our everyday lives as technology and its applications.

Public consultation should become the norm when formulating technology-related regulations. While such inclusiveness may not always guarantee a better outcome, at the very least it provides transparency during the process.

Transparency implies openness and accountability and accordingly lends credibility to the legislative drafting process.

While every regulation should aspire to include a deliberative process, this is even more critical for technology-related policies for at least the following reasons. For one, the government’s understanding of the technological landscape is limited. This is because of rapid changes in technology and the complexity of such changes, including, for instance, how they may affect existing business models.

The government can actually gain by acknowledging that it does not have expertise on everything and that it needs to engage experts as well as the very users of technology themselves through inclusive consultations so as to better understand the core issues at hand.

Second, the very technical nature of technology necessitates that the government and the rest of the industry have more or less the same starting point in understanding the core issues at hand. It is crucial that all relevant stakeholders in the arena are able to air their respective concerns and negotiate the way forward.

The process involved in the draft OTT regulation, therefore, signals a good start. The regulation intends to capture all OTT services across a very wide spectrum, from text messaging and social media platforms, to content and storage services. The Communications and Information Ministry, as the ministry in charge, appears to want to manage the process in stages and in a deliberate and consultative manner from the get-go.

Such an open consultative process for technology-related regulations, however, is not uniformly applied. Take, for instance, the drafting process for the recent Transportation Ministry app-based transportation regulation, whose formulation appeared to exclude the public, perhaps because a rapid response was required in light of real tensions on the streets of Jakarta.

When the app-based transportation regulation was enacted, the media reported that the Transportation Ministry had drafted it in a “hush-hush” manner.

Interestingly, both the Communications and Information Ministry and the Transportation Ministry are led by individuals from the private sector, who may be assumed to be more end-user oriented than government institutions in general. So, this suggests that different managerial styles count as well when it comes to openness to public consultation.

The communications and information minister has often stressed the importance of obtaining input from a broad base of stakeholders and has, on more than one occasion, stated his willingness to turn to experts for answers to questions that he may not fully understand. By contrast, the Transportation Ministry is led by an accomplished manager who is widely credited for successfully turning around a state-owned railway company by relying on his strong personality.

Clearly, this is a tale of two very contrasting drafting processes of regulations that occupy a similar policy space.

There should be real impact of the process on substance. However, admittedly with regard to the draft OTT regulation, any judgment on the final outcome, including whether the consultative process was genuine in the first place, will have to wait until the draft is issued as a regulation by the Communications and Information Ministry. There is no guarantee that the input provided will be accommodated, or clarity as to how it will be included (if accepted by the drafters).

Judgment, though, can be passed on the app-based transportation regulation. There is a six-month stay period before the regulation comes fully into effect, but those affected can already feel its implications and challenges.

Notwithstanding the stay period, the stealth with which the regulation was issued has caused many to query the motives of the Transportation Ministry. Many question whether the regulation actually benefits or disadvantages the Indonesian public and small and medium enterprises (SMEs), the very segments of society that the Transportation Ministry is purporting to protect with the issuance of the regulation.

As a result of the very nature of the regulation’s drafting process, they were quickly forced to provide exceptions. While on the one hand, this makes Transportation Ministry officials appear proactive and accommodative, on the other hand succumbing to pressure by providing exceptions to a newly issued regulation is simply not good practice in governance.

Deviation from the norm is not the only issue here; the more crucial issue in the long run is the lack of documentation and the potential for conflicting interpretations of issues.

As an example of the unhealthy provision of exemptions, on June 1 the government and the traffic police agreed on three minimum requirements that an app-based transportation service provider (the cited examples were GrabCar, Uber and GoCar) must meet in order to operate in Indonesia: Drivers must possess valid driver’s licenses, vehicles must pass the vehicle road-worthiness test and vehicle ownership certificates must be in the name of the respective legal entity that owns the vehicle (e.g., the company, cooperative, etc.). It was also reported that the stay period had been further extended by another six months, but this is unconfirmed as yet.

Now, the outstanding question that arises is this: How should these minimum requirements, as decided upon by the three ministries, be interpreted vis-à-vis the app-based transportation regulation? Has the regulation been effectively amended? More broadly, what does this mean for the other provisions of the regulation?

The regulations related to OTT services in general and app-based transportation services specifically are clearly intended to regulate the use of technology. These technologies remain inadequately addressed largely because they have been newly developed and the government has yet to catch up in terms of laying down comprehensive regulations.

Such technologies, for better or worse, have the potential to impact or disrupt existing business models.

App-based transportation services, as a case in point, have indeed disrupted the conventional taxi business. If the government only responds reactively to technological developments, as it did in that case, the very ability to govern will suffer. Real public consultation, therefore, should be the first step in any drafting process.
_________________________________

The writer is telecommunications, media and technology partner at Assegaf Hamzah & Partners. The views expressed are his own.