What seemed like a noble initiative to connect millions of the world’s poor to basic internet services in the developing world had gone largely unnoticed till suddenly Facebook’s Internet.org initiative found itself mired in controversy. The main objection to Internet.org was its perceived violation of the principles of Net Neutrality.

1. 38 | GlobeAsia May 2015
Technology
assumption is these initiatives could bridge
what’s come to be known as the digital divide.
The digital divide is the vast chasm that exists
worldwide between people in the developed
world (that have high internet penetration
rates) and those in developing countries where
internet access is not only spotty but expensive
where available. Programs like Airtel Zero have
been around at least since 2014 when Facebook
W
hat seemed like a noble initiative
to connect millions of the world’s
poor to basic internet services in the
developing world had gone largely unnoticed till
suddenly Facebook’s Internet.org initiative found
itself mired in controversy. The main objection
to Internet.org was its perceived violation of the
principles of Net Neutrality.
At its most basic level Net Neutrality is the
concept that the internet should be a level playing
field and that all data on the internet be treated
equally. It’s a simple enough idea but one that
is at odds with big entrenched internet players
who would like nothing more than to massively
increase user base by dropping down the cost of
accessing their product to zero.
The problems in India started rather
innocuously for Facebook who had partnered
with carrier Reliance Telecom for their Internet.
org platform in India. The company’s service
was largely well received for a couple months
until the Indian government put out a call for
comment on the Net Neutrality and coincidently
around the same time, national telecom provider
Airtel began rolling out a plan that would
give its users free access to certain sites that
had previously partnered with the provider
(including Facebook). Airtel boasted that within
three days of launch 150 companies had already
inquired about joining the initiative. The criticism
took some time to coalesce but once it began,
things snowballed out of control for Airtel. At
least 750,000 people (including this author) wrote
in to the Telecom Regulatory Authority of India
demanding Net Neutrality. Companies (including
India’s largest online retailer Flipkart) began
pulling out of the initiative and tweeting their
commitment to Net Neutrality. The backlash
spread to Internet.org as well and companies
immediately began a mass exodus away from
the platform and a PR offensive distancing
themselves from it.
The Digital divide
Programs like Internet.org and Airtel Zero have
generally been lauded worldwide because the
Net Neutrality and what initiatives like
Internet.org and Airtel Zero mean for the digital divide

2. May 2015 GlobeAsia | 39
Net Neutrality therefore seeks to ensure
that data is not segregated into slow and fast
lanes where a provider could charge customers
different rates depending on what kind of data
they were transmitting. It’s an international
issue and a report out from the Electronic
Freedom Foundation lists multiple violations
of Net Neutrality including Spotify agreements
in various countries that seek to provide users
with flat rate service, VoIP calls blocked in the
Caribbean and a failed proposal for a tiered
Internet in Mexico. A previous proposal by Airtel
in India to charge different rates for access to
VoIP services was scrapped only due to massive
local opposition. In fact, perhaps nowhere is
this debate more important than it is in the
developing world and places where the digital
divide is greatest. Indeed this is just the target
audience for Facebook’s Internet.org and why
this initiative could be so dangerous.
Because of the extreme poverty in the
developing world, a Zero Rate plan would spell
virtual doom for any company that had the
task of going up against a competitor who’s
users didn’t have to pay data fees to access their
service. In an extremely price conscious market
like the India for example, there would just be
no way for smaller players to compete once their
bigger counterparts managed to partner with
Internet.org or Airtel Zero.
One of the biggest concerns surrounding
these programs is the tendency for people on
the other side of the digital divide to think that
Internet.org *actually is* the entire Internet.
New Internet users see the walled garden of
Internet.org and Airtel Zero and believe that
that’s the entire forest. This isn’t an idle concern.
A researcher with policy think tank LIRNeasia,
Helani Galpaya learned first-hand how this
happens in practice. In polling the poorest
telephone users in Indonesia, most denied using
the Internet while simultaneously stating they
used Facebook. Similarly Christoph Stork, a
researcher with Research ICT Africa had much
the same experience while conducting a similar
poll as far away as Africa. Respondents there too
stated that while they did not use the Internet,
they were frequent users of Facebook. As the
head of LIRNEAsia Rohan Samarajiva speaking
about the respondents put it, “In their minds, the
Internet did not exist; only Facebook.” This sort
of thing should not be regarded as an accident.
launched Internet.org in Zambia with the help
of partner Airtel. Indeed the overall goal, can be
considered a noble one but its implementation
(without proper regulation) would ensure
that big players with deep pockets are able
to eliminate the cost of access for its poorest
potential customers and thus prevent new
players (without the finances for such a deal)
from gaining a foothold in the industry.
Jason Fernandes
Tech commentator and the founder of SmartKlock.
Zuckerberg launched
Internet.org in 2013
and Facebook has
largely worked
behind-the-scenes
with Samsung,
Qualcomm, Ericsson
and other corporate
partners

3. 40 | GlobeAsia May 2015
Technology
this would still accomplish the same goals and be
at least a slightly more fair system overall.
Internet Coupons – A possible solution?
Perhaps the best option is that governments of
developing countries issue “Internet coupons”
to the poor in much the same way the United
States and other countries issue food stamps.
This should not be a radical idea. The concept
behind food stamps is that since food is essential,
it should not be denied to the very poor. If
internet access were deemed “essential”, that
would setup a framework for countries to better
ration bandwidth and ensure an end to the digital
divide. This might seem ambitious to cynics
who could point to our inability to even feed the
world’s poorest people but logistically it could be
easier to give the poor internet access than food.
Communication too, is a basic human need.
Man is a social animal, connecting with people
is in our very nature. It’s clear that mankind
as a civilization would be better off people
around the world could be better connected.
Should this happen, the potential for scientific
collaboration, remote education and general
human advancement is limitless. Once people
are better connected, that could lead to better
education, better opportunity and hopefully
fewer economically impoverished people to
worry about. Technology pioneer Douglas
Englebart has said that “the digital revolution is
far more significant than the invention of writing
or even printing.” It’s high time we lower or even
eliminate the minimum cost of admission.
Services like Airtel Zero and Internet.org (even
down to its name) are designed to give the
impression that they connect users either to the
Internet itself or some sort of Internet Lite, when
in fact it is nothing of the sort. The initiative does
not so much as give free internet access to people
as it gives them access to a handpicked menu
of services in many cases from those who have
paid for the privilege. This spells certain doom for
home grown companies in the developing world
who have to compete with big overseas players
while convincing their customers not only to
use their service but to pay to access it when
those users could instead access the competitors
offerings for free.
These sorts of plans are not without their
potential benefits
In a guest post by Gary Swart on Forbes.com,
the CEO of Odesk (a remote collaboration work
platform) expanded on the ability of Internet.
org to increase worker wages in developing
countries. Swart’s numbers point to a possible
$27 billion the world stands to gain just in the
next 7 years, should Internet.org be expanded
worldwide. Swart says that the the vast majority
of this money is headed for developing countries.
This theory doesn’t take into account of course,
the negative economic effect these outsourced
workers would have on the domestic workforce.
The problem is not the concept, its execution
The fact is that the world and particularly the
developing world has a lot to gain by providing
its citizens with some sort of basic internet access
for free not least of which are better wages,
but who will be the gatekeepers? People are
particularly troubled with the idea of letting big
corporations decide which websites are free
and which ones aren’t. The one thing that would
trouble me more is imagining this role instead
filled by government. Logging into a government
portal to use Facebook seems more than a little
creepy. Perhaps the easiest to implement solution
is that government provide basic (perhaps speed
limited) internet to the entire populace. This
would be an imperfect solution because higher
bandwidth websites would only be accessible to
the rich. For the poor this could feel a little like
being perpetually just short of the “you must be
this tall to ride” sign at the amusement park. As
long as the speed limitation is uniform however,
REUTERS,COURTESYOFTWEAKTOWN.COM

4. A
A
S
I
INDONESIA’S NO 1 BUSINESS MAGAZINE VOLUME 9 NUMBER 5 / MAY 2015
Basel World Special: A Love Affair with Luxury Time Pieces
Singapore
Australia
Malaysia
Indonesia
Philippines
Thailand
Taiwan
Others
S$13.00
A$9.95
RM18.00
Rp50,000
P250
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Working
for Workers
BPJS, the new social security
agency for workers welfare, aims
to deliver greater professionalism
and hopefully higher returns to
its 16.7 million members.

5. A Media Holdings Publication8 | GlobeAsia May 2015
Columnists
18 Steve Hanke
Greece: Down and probably out
22 Guillaume de Gantes
and Vinayak HV
Indonesia: Ripe for digital
disruption
34 Jamil Maidan Flores
The Sunni vs. Shiite conflict
and the muddled Middle East
38 Jason Fernandes
Net Neutrality in the digital divide
106 Scott Younger
Distribution and use of water
110 Keith Loveard
Let’s not give up hope
contents
IWC 75th ANNIVERSARY
88 Back to the future
Swiss watch-maker IWC Schaffhausen
celebrated the 75th anniversary of the
Portugieser in style at the Singapore
Victoria Theater and Concert hall recently.
Indiana university
asia - pacific alumni meeting
92 Building bridges
Indiana University has a long history
of reaching out to the world.
94 Indiana University: A Brief
Introduction
With more than 110,000 students
and 8,700 faculty members on eight
campuses, Indiana University is also
one of the largest institutions of higher
education in the United States.
EVENT
112 60th Asian-African Conference
highlights
Leaders of Asian and African nations
converged on Jakarta and Bandung last
month to attend the 60th Asian-African
Conference commemoration.
114
VOLUME 9 NUMBER 5 / MAY 2015
8 | GlobeAsia May 2015
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SPECIAL REPORT
62 Building trust in the cloud
The development of cloud computing
comes at the same time that the
threat from cybercrime is rising.
66 Goodbye Premium, hello Pertalite
Pertamina says it is ready to start
selling a new 90-octane fuel it will call
Pertalite.
World Economic Forum
68 Connecting with the world
Digitalization and regaining public
trust will be the key challenges for
Indonesia as it seeks to fulfill the
aspirations of its 250 million people.
72 Counting on the MACs
Indonesia can’t win investment
with cheap labor any more. Vietnam
and the Philippines are far cheaper,
according to executives at Boston
Consulting Group.
76 Wiring the world
German software maker SAP says
hyper-connectivity will be key to the
success of the AEC.
Baselworld special
80 Interpreting the smart in
watches
GlobeAsia bears witness
to how luxury watches are
responding to the threat
of the disruption that is the
smart watch.
Living the Good Life
118 The ultimate speakeasy
Theme restaurants and bars are a dime a
dozen. Prohibition, which recently opened
in Jakarta’s Senayan Arcadia, is one that
creates real character.
Back Page
120 Merdeka Building
88
76

6. 10 | GlobeAsia May 2015
A
t the recent World Economic
Forum East Asia meeting in
Jakarta, Indonesian President
Joko Widodo made a passionate plea
for investments. The president told
the 700 delegates gathered from
across the world that Indonesia had to
reinvent its economy and its society.
The old ways of doing things no
longer apply. In today’s challenging
global environment, change is
inevitable. “Today we must change
from consumption back to production,
from consumption to investment in
our infrastructure, investment in
our industry, but most importantly,
investment in our human capital, the
most precious resource of the 21st
century,” he stated.
Without doubt these changes
will create pain within society. Those
who cannot adapt to the change will
be marginalized. Both individuals
and businesses will have to be
plugged into the global grid if they
are to reap the benefits of the new
digital revolution.
President Widodo himself
will have to display courage and
leadership if he is to move the nation
along the path he envisages. He will
have to convince vested interest
groups to give up their privileges
but, most importantly, he will have
to convince the Indonesian people
that they will have to work hard and
sacrifice short-term gain for longer-
term benefits.
Editor’s Note
Editorial
Editor in Chief
Shoeb Kagda
Managing Editor
Yanto Soegiarto
Deputy Editors
Muhamad Al Azhari
Editor at Large
John Riady
Senior Editor
Albert W. Nonto
Denverino Dante
Contributing Editors
Farid Harianto
Steve Hanke
Scott Younger
Contributors
Suryo Bambang Sulisto
Wijayanto Samirin
Frans Winarta
Jason Fernandes
John Denton
Special Columnist
Jamil Maidan Flores
Reporters
Vanesha Manuturi
Dion Bisara
Copy Editor
Geraldine Tan
Art, Design and Layout
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Production
Assistant
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Walking the talk
To a large extent, Indonesia has
relied too much on its rich natural
resources and a large but cheap
labor pool to drive gross domestic
product growth. If the country
is to instead rely on its human
capital, as the president noted, it
will have to overhaul its societal and
economic structure.
This will entail investing
heavily in education, skills training
for workers, infrastructure and
allowing foreign talent to feel at
home in Indonesia. Sadly, that is
not the case at the moment. The
government sets aside 20% of the
national budget for education each
year but the overall quality of
education remains poor.
Recent government policies to
clamp down on foreign work visas
have sent just the opposite message.
Indonesia has always been an open
tolerant society but, noted Kishore
Mahbubani, dean of the Lee Kuan
Yew School of Public Policy, the
rising tide of economic nationalism
is hurting the country as well as
its economy.
As the saying goes, the president
must walk the talk if he is to truly
reinvent Indonesia. If the country
aspires to be a production base and
home of innovation, it must first alter
its mindset.
Shoeb Kagda
Editor in Chief
shoeb@globeasia.com
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