Country Presentation : Indonesia

1. Country Presentation: Indonesia Woro Indah Widiastuti, Director of Special Telecommunication, Public Broadcast & USO Tri Haryanto, BP3TI Arif Wismadi, ITU/ADB Consultant Rural ICT Policy Advocacy, Knowledge Sharing and Capacity Building Regional Project Regional Multi-stakeholder Discussion Forum on Rural ICT Development Bangkok, Thailand, 4 July 2011

2. Contents • Country ICT Overview • State Institutional Structure • Policy, Legal, & Regulatory Framework • Funding Mechanism • Rural Initiatives • 3 Key Lessons from Project/Workshop • 3 Objectives for Follow-up • Priority next steps in country’s rural ICT policies, institutions, programs, mechanisms; goals for assistance, knowledge sharing, capacity building

3. Country ICT Overview

4. Country ICT Overview No. of Population : 240 Millions No. of Islands : 17.504 No. of Villages : 70.611 Source : DGPT STATISTIC, S1, 2010

5. State Institutional Structure PRESIDENT People’s Representative Council Budgeting, Legislation, Monitoring Coordinator Ministry for Economic Ministry of Finance Coordinator Ministry for Welfare Ministry of Research and Technology USO Fund Research on Rural ICT Technology and Application Social, Economicand Spatial Targeting Coordinator Ministry for Politics, Law, Defence Ministry of Communication and Informatics Ministry of Deprived Region Development Contents and applications Ministry of Internal Affair Policy and Planning Ministry of Education Local Government Supports Ministry of Health Independent Regulatory Body (BRTI) Managing Fair Competition in Commercial Services Rural ICT Autorithy (BP3TI) Service Contracting USF/ICT Fund Management Local Government Coordination USO Operator

6. Policy, Legal, & Regulatory Framework NATIONAL LAW 36:USO Contribution Government Regulation 52: USO definition 28: 0.75% 7: 1.25% Ministry Decree 34: USO operational definition Service Procurement Operational Plan Dir. General SOE privilege and obligation to rural connectivity USO Pilot Project w Gov. Budget Interconnection Fee for Rural and Public Phone USO with USF: 38.471 vil internet 131 vil+5.748 IPoP Deployment

7. Funding Mechanism • USF 0.75 % gross revenue • Earmarking, Collected to National Treasury as Non-tax State Revenue, managed by BP3TI • Disbursed for OPEX, with service contracting, performance based contract, Government “buy the service” from the USO operators selected with bidding process • Multi-Years, Net-Cost contract: revenue goes to operator. Operational (financial) risk managed by operator • ICT Fund 1.25% gross revenue • ++ national backbone in economically not viable region • Universal Access (to unserved and underserved area) to Universal Service (including under privilage groups)

8. Rural Initiatives • USF Funded • Number of village: 33.187& Internet131 (2009/2010),IPoP: 5.748 (2010/2011) • Mobile facilities :1907 units (on-going) • Nusantara Internet Exchange (NIX) in 8 province • Community Broadcasting (500) • Private to Community • CSR program from Microsoft Indonesia and ASEAN Foundation, 2 PCs, 1 printer, managed by a ‘Rural ICT Champion’ with support of NGO • Community Selfhelp • Neighborhood Internet sharing for affordable access • Local Government Initiative • E-Government with WAN and public administration application • State Government Initiative • JARDIKNAS: infrastructure connecting schools and universities nationwide, both urban and rural, with e-learning application

9. 3 Key Lessons from Project/Workshop • Lesson#1 • There are country specific examples providing with success and shortcoming issues which enable countries in Asia-Pacific to avoid to ‘reinventing the wheel’. • Lesson#2 • ICT infrastructure is very important but it is insufficient to transform rural community to be part of Knowledge Economy. Adaptive Capacity program for community and related institutions to enable them to conduct a productive social and economic activities is necessary to be conducted. • Lesson#3 • International practices shows that “Economic Sector Based” rural ICT program is more effective than only driven by infrastructure deployment targets.

10. 3 Objectives for Follow-up • Follow-up#1: Policy and Planning Level • The expansion of USF into ICT fund requires careful look in the implementation. Further studies on policy and planning level is required to ensure the sustainability, as well as promoting market mechanism with balancing planning direction. • Follow-up#2: Management Level • Regulatory framework will be proposed for securing ‘overlaping’ and ‘grey area‘ of interface between ICT sectors and economic sectors, with special attention to be given to ‘true gap’ areas. • Follow-up#3: Operational Level • Series of piloting on “economic sector based“ will be proposed under USF involving trained champion from related social organizations, rural development agencies, NGOs and universities networks. Technical Assistance is necessary to provide international learning experiences to be customized to local context.

11. Policy & planning Universal Service Obligation Rural ICT: public phone within distance range, 1 village 1 connectiity, internet PoP for sub-district capital, rural broad band Implementation • Role of civil society • A set of feasible options for production (financing, institution, regulatory framework etc) • Performance/exposure: rural ICT penetration etc IMPACTS • Effect (social, economics and environment) Goal • Output & productivity • Growth, poverty reduction etc Intervention (2) Adaptive Capacity Program • Respons & adaptation Intervention (1) Regulatory Framework Policy, Planning, Resources Management Residual Contexts: regional autonomy, budgeting, economic and spatial development priorities (eg. agriculture, fishery, tourism, education, health, etc) Source: Management of Infrastructure and Community Development, Postgraduate School, Universitas Gadjah Mada, 2011

12. Thank You