06 Dec 2019
Dialing Up Change: New Regulation Modernizes and Streamlines Regulatory Regime for Telecommunications Services

A. Background

The Minister of Communications and Information Technology (MCIT) has issued an important new regulation on the provision of telecommunications services. The regulation (MCIT Regulation No. 13/2019 / the “New Regulation”[1]) enters into force on 25 April 2020 (six months after its promulgation on 25 October 2019).

The New Regulation, which revokes a total of 16 previous regulations and decrees, is intended to simplify the telecommunications regulatory and licensing regime and to bring it into line with developments since the issuance of Minister of Communications Decree No. KM.21 of 2001 on Telecommunications Services (“Reg 21/2001”[2]), as subsequently amended.

It is important to note at the outset that the scope of the New Regulation is confined to the operations of telecommunications-service providers, while telecommunications network operators are regulated separately.

Among other things, the New Regulation lists, defines and sets requirements for the various forms of commercial telecommunications services that require licenses from MCIT; elaborates the rights and obligations of telecommunications-service providers; regulates the relationship between a telecommunications-service provider and a telecommunications-network provider; incorporates specific protections for subscribers; and, for the first time in Indonesia, expressly permits the reselling of telecommunications services.

In addition, the New Regulation provides for telecommunications-service licensing to be conducted using the Online Single Submission (OSS) System, Indonesia’s new internet-based business licensing service that was launched in mid-2018.

As the New Regulation is a very wide-ranging piece of technical legislation, it is not possible to cover all of the substantive changes it introduces in a legal update. Accordingly, we shall confine our discussion to a brief description of the key changes.

B. Changes to Telecommunications-Service Classifications

B.1. Basic Telephony Services

Article 5(1) New Regulation updates the list of basic telephony services that was set out in Reg 21/2001, as shown in the following table:

As will be seen, telegram and data services are omitted from the New Regulation. However, Article 5(2) New Regulation states that additional features may be provided as part of basic telephony services. However, no explanations are provided as to what such additional features might consist of.

B.2. Value-added Telephony Services

Article 6 New Regulation updates the list of value-added telephony services that was incorporated in Reg 21/2001, as shown in the following table:

B.3. Multimedia Services

Article 7 New Regulation updates the list of multimedia services that was set out in Reg 21/2001, as shown in the following table:

IPTV is regulated for the first time by the New Regulation, while VoIP services, which were classified as multimedia services under Reg 21/2001, are now categorized as value-added telephony services.

C. Rights and Obligations of Telecommunications-service Providers

The New Regulation incorporates a consolidated list of the rights and obligations of telecommunications-service providers – these were previously widely dispersed across various regulations. Of particular importance, a telecommunications-service provider is now required to commence commercial telecommunications operations within 120 calendar days of its operating license becoming effective.

D. Content Restrictions

The New Regulation incorporates provisions that prohibit a telecommunications-service provider from making available content that violates the provisions of the laws and regulations. If a telecommunications service provider relies on a third party to supply content, they are obligated to inform the third party of this prohibition. Should any content violate the provisions of the laws and regulations, then it must be blocked by the telecommunications-service provider.

E. Data Confidentiality

Article 20 New Regulation imposes a specific obligation on a telecommunications-service provider to maintain the confidentiality of user data (at a minimum, the name and ID number of user).

F. Data Retention

Should a user terminate their subscription, the telecommunications-service provider is required to retain the user’s data for a minimum of 90 calendar days subsequent to termination.

G. Reselling of Telecommunications Services

For the first time in Indonesia, the New Regulation expressly permits the reselling of telecommunications services by a telecommunications-service provider to a third party prior to such services being accessed by an end-user.

E. Licensing Process

Previously, Reg 21/2001 prescribed the following stages for the licensing of telecommunications services:

1. Issuance of In-principle License;

2. Conducting of Operational Worthiness Test; and

3. Issuance of Telecommunications Operating License;

The New Regulation significantly simplifies and streamlines the licensing process, with the stages now being as follows:

• Issuance of Telecommunications Operating License (no longer any need for an in-principle license);

• Conducting of Operational Worthiness Test (on a self-assessment basis, whereas previously the test was conducted by MCIT);

• If deemed necessary by licensee, sample testing may be conducted in collaboration with MCIT;

• Issuance of Operational Worthiness Certificate.

Under the previous regime, the Operational Worthiness Test had to be conducted by an accredited Operational Worthiness Testing Agency. Under the New Regulation, by contrast, the Operational Worthiness Test is now conducted on a self-assessment basis by the licensee. Sample testing (uji petik) may also be conducted in collaboration with MCIT, if deemed necessary by the licensee.

MCIT may subsequently carry out field verification on the results of self-assessment. Should such verification reveal that the self-assessment was not conducted in accordance with the prescribed parameters and procedures, the licensee will be liable to administrative sanctions.

All telecommunications-service licensing processes are now to be conducted using the Online Single Submission (OSS) system.

G. Sanctions

Non-compliance with the requirements of the New Regulation may result in the imposition of sanctions in the form of written warnings; fines; termination of telecommunications services; and/or revocation of telecommunications-service license. In addition, directors and executives of a telecommunications-service provider, as well as the telecommunications-service provider itself, may in certain circumstances be blacklisted from participating in the provision of telecommunications services for a period of two years and/or until such time as financial obligations to the State have been settled.

H. Transitional Provisions and Grace Periods

The New Regulation enters into force on 25 April 2020 (six months after its date of promulgation on 25 October 2019).

For existing licensed telecommunications-service providers, they are required to comply with the provisions of the New Regulation within 24 months of its coming into force, subject to the following exceptions:

• NAP-service providers are given 60 months to obtain a fixed-closed network telecommunications license for domestic and international routes.

• V-service providers that already have an IPTV Service Operating Approval must make the necessary changes so as to bring this approval into line with the New Regulation by not later than the approval’s expiry date.

By Agus Ahadi Deradjat (aderadjat@abnrlaw.com) and Mahiswara Timur (mtimur@abnrlaw.com)

[1] Minister of Communications and Information Technology Regulation No. 13 of 2019 on the Provision of Telecommunications Services (Peraturan Menteri Komunikasi dan Informatika Nomor 13 Tahun 2019 Tentang Penyelenggaraan Jasa Telekomunikasi).

[2] Keputusan Menteri Perhubungan No. KM.21 Tahun 2001 Tentang Penyelenggaraan Jasa Telekomunikasi

This ABNRNewsand its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.