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Media and Telecommunication Policy and Governance in Indonesia towards Convergence

A thesis presented

By

Vience Mutiara Rumata

(649271)

to

The School of Culture and Communication

In partial fulfilment of the requirements

For the degree of

Master of Arts

In the field of

Global Media Communication MG-GMCOM

In the

School of Culture and Communication

The University of Melbourne

Supervisor: Dr. Danny Butt

May 2015

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Abstract

Indonesia’s 2002 Broadcasting Law and 1996 Telecommunication Law are

insufficient to regulate the changing business models and technical

capabilities that are enabling media convergence. This qualitative study

seeks to understand how and what way broadcasting and

telecommunication governance in Indonesia is shifting toward media

convergence. It uses a new institutionalist approach, based on interviews

with six senior officials of Kominfo (the executive), the DPR (the legislative),

and two independent regulatory bodies BRTI and KPI. The findings identify

dissent between Kominfo and KPI-DPR in revisions of the Broadcasting Law,

particularly the provision of KPI’s role in broadcasting policy-making and

also the provision of digitalisation in broadcasting. A “digital switchover”

for free-to-air TV is targeted for 2018, but is challenged with the inadequacy

of the current broadcasting law to legalise the multiplexing system for free-

to-air TV stations. Addressing this will be critical, as the migration will create

a “digital dividend” of licensable spectrum which allow the adaptation of

LTE/4G technology for telecommunications. The study identifies the biggest

challenge for the government in the revision of 1996 Telecommunication

Law, which will be necessary to transform the traditional broadcasting and

telecommunication industries to digital ones, by facilitating interconnection

along the value chain of the telecommunication industry, and to enable

digital infrastructures and networks as foundation of the convergence

ecosystem.

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1. Introduction

2. Literature Review

3. Methodology

4. Result and Discussion

5. Conclusion

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CHAPTER I

INTRODUCTION

The enormous growth of internet based media has not just changed the way

media is consumed but also the way media is produced. The changes in media

production have profoundly transformed both the media and telecommunication

industry. Both industries have inevitably collided in to what is known as

‘convergence media’, where both industries deliver their content in a digital format.

This ‘new’ environment challenges the government to regulate not only the

technology but also its social impact. Østegaard (1998) argues that “convergence

involves a shift from legislation based on the social functions of media towards

regulation addressing technical and industry policy issues” (p.95).

In the academic literature, the study about media convergence focuses on the

way the media and telecommunication companies reposition their business values

regarding production and distribution. The internet provides redistribution channel

for contents as well as an interactive platform for consumers to create content (Lin,

2013). Tapsell (2014) argues that convergence would give opportunities for media

corporates to form “multiplatform oligopolies” in news services, both in traditional

and new media. In order to provide these multiplatform content services, both media

and telecommunication companies need to integrate their business value chain both

vertically and horizontally (Blackman, 1998:162). Meanwhile, the study of media

convergent governance is mostly a case based study which describes the regulatory

approaches and their interrelations with other institutions including the market. Pool

(1983) states there are three branches of convergence policy determination:

technological determinism; social shaping theory; and market-force determinist

model (Menon, 2006: 61).

This convergent environment and the advancement of technology has had

tremendous effects on the Indonesian media and telecommunication industries. In the

media industry, the main driver of the convergence is technology and the media

consumption habits of young urban users (Tapsell (2014:3). The percentage of

Indonesian people connected to the internet is approximately 88.1 million people or

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34.9 per cent of a 252 million1 population (APJII press release, 2014). The majority

of internet users, at least around 78.5 per cent, are in the western part of Indonesia,

which means the digital divide remains an issue. Regarding the demography, most

internet users are Indonesian youths between 18 – 25 years old. Social media,

browsing and chatting are the most popular online activities among users. There are

at least 69 million Facebook active users in 2014 (Wall Street Journal, 2014) and 29

million Twitter accounts in 2013 (the Jakarta Post, 2014). Given these facts, most of

the media groups acknowledge this trend and therefore develop their online media

content, including turning their daily base newspaper into an e-paper or mobile

application that is available in IOS or Android operation systems and can be shared

through social media (Tapsell, 2014:4). Nevertheless, the media conglomeration and

media-politic affiliation are augmented in the convergent environment and therefore

pose tremendous threats particularly for democracy and freedom of Press in

Indonesia (p.5-6). In Indonesia, there are 12 media group companies2 which

dominate the market. MNC group, one of those media corporates, owns at least three

national TV stations, a cable TV service, several radio networks, magazines,

newspapers and a news portal. Most of these giant media group owners are involved

with or even are high profile politicians in Indonesia. For example, Hari

Tanoesoedibjo, the CEO of MNC Group, is chairman of Persatuan Indonesia party.

Television remains the most consumed media by a majority of Indonesian

people. According to Nielsen Indonesia (2014), TV penetration reaches 95 per cent

(Java Island) and 97 per cent (outside Java Island) compare to others media3. There is

growing trend of online TV consumption as the increasing number of TV online

applications such as: TV online Indonesia.net; useetv; and Mivo, as well as the

availability of live streaming content. The TV industry is in transition to

decentralised system. The government, through the Ministry of Information and

Communication Technology (Kementerian Komunikasi dan Informatika or

Kominfo), issued the Ministerial Decree No. 43/2009 that requires that private free-

to-air TV stations, particularly Jakarta based-national broadcast TV stations, to

affiliate with local based TV stations in provincial level in order to broadcast its

1 Based on 2014 statistic of the National Statistics Bureau

2 MNC Group, Kompas Gramedia Group, Visi Media Asia, Jawa Pos Group, Berita Satu Media

Holdings, Media Indonesia Group, and CT Group 3 Internet penetration is 33 per cent, radio is 20 per cent and newspaper is 12 per cent.

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content or what so called ‘TV networking system’ (Sistem Siaran Jaringan/ SSJ).

Armando (2014) argues that the biggest challenge of this system is the significant

influence of Jakarta media group owner to the government4.

In the telecommunication industry, the competition among operators is getting

fierce. As the growing number of mobile devices and data usage are increasing,

operators are likely to expand their business as content service providers. Telkom5,

for instance, has expanded its business portfolio into ‘TIMES: telecommunication,

Information, Media & Edutainment, and Service’ since 2009 (Telkom website,

2015). In 2011, it introduced Groovia and UseeTv and as its commercial IPTV.

Though the telecommunication industry continues to grow and contribute to the

national economy, the biggest challenge for the government nowadays is to eliminate

the digital divide and building the broadband ecosystem for the convergence.

Deregulation has been applied in both the media and telecommunication

industries since mid-1990s. The enactment of the Press Law No. 40/1999 (the

amendment of 1982 Press Law) abolished the SIUPP6-publishing license for start-up

media companies (p. 105). As a result, there have been explosive numbers of print

and electronic media ever since. So far, there are 12 national broadcast private

televisions post the year 2000; about 516 print media (based on 2007 Indonesia

Broadcasting Commission data in Haryanto, 2011: 105); and more than 900 radio

stations have emerged. Those numbers exclude the existing local (provincial and

district level) televisions and print media. In 2002, the Broadcasting Law was

enacted as the revision of the previous 1997 Broadcasting Law. The privatisation of

the telecommunication industry occurred when the Initial Public Offering (IPO) of

PT. Telkom, the government owned telecommunication company, was launched in

November 1995. In 1996, the Telecommunication Law was initially enacted in order

to regulate the industry including the competition.

The existing legal frameworks are insufficiently regulating the media and

telecommunication industries. Nugroho and colleagues (2012) argue that the 2002

Broadcasting Law fail to decentralise media and cross media ownership.

4 During the early implementation of SSJ, the TV owner influenced the government to postpone the

transition period twice which 2002 to 2007 and 2007 to 2012 (Armando, 2014:403). 5 Telkom is state owned telecommunication enterprise established in 1856.

6 SIUPP (Surat Ijin Usaha Penerbitan Pers) is license that issued by government for newspapers

company

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Furthermore, the impact of media on citizenship has mostly been regulated by non-

media policies such as Electronic Transaction and Information (ITE) No. 11/2008

and Pornography Law No. 44/2008 and the Criminal Code (KUHP)” (p. 5).

Therefore in 2012, The House of Representatives (Dewan Perwakilan Rakyat/ DPR)

proposed a revision of 2002 Broadcasting Law. The main propose of the revision

was restructuring the broadcasting system and arranging the TV analogue-digital

migration (Fahriyadi, 2012). However, the discussion between government and

parliament regarding this revision is quite complicated, so that the revision was not

finalised until last year. In this year, the Kominfo is drafting the revision of the 1996

Telecommunication Law. Yet, Indonesia does not have the specific law to regulate

the convergence of media. In 2010, the Kominfo drafted the convergence telematics

bill but it was thwarted by the DPR.

Based on the description above, there are two main areas of discussion in this

research: the broadcasting and telecommunication policies and governance towards

realizing a cohesive regulatory framework for convergence media environment. The

discussion of this study will focus on convergence issues that emerge both in

broadcasting, particularly television, and the telecommunication industry. Also, the

discussion includes the scenarios or plans that the Indonesian government has to

address these issues. Hence, the research question is as follows:

How and in what way does the broadcasting and telecommunication

governance in Indonesia work towards the media convergence?

The aim of this research is to understand the nature of broadcasting and

telecommunication governance in Indonesia as it is directed towards media

convergence and also to map out the logical elements in each stage of the process

and the degrees of autonomy and levels of influence between involved actors. The

significance of this research is based on the regulators’ points of view, particularly

the Kominfo, the KPI, the BRTI, as well as the DPR including their expectation,

perceptions and visions to regulate these industries in convergence. The researcher

expected this study as a foundation for Indonesian regulators to evaluate the existing

policy and interrelation among regulators in the future.

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The Interrelation between Regulatory Actors

Nugroho and colleagues (2012: 70) contend that “a key to analysing the

circumstance of media policymaking process in Indonesia is to identify the key

players who have enough power to influence the decision making and to steer the

processes”. Accordingly, the interrelation between regulators (as seen on diagraph 1.)

decisively determines the outcome as well as the sustainability of regulations. The

executive, legislative, and judicial actors have their own functions and interest in the

policy making process. There are two quasi-governmental bodies that regulate the

media and telecommunication sectors: the Indonesian Broadcasting Commission

(Komisi Penyiaran Indonesia/ KPI) and the Indonesian Telecommunication

Regulatory body (Badan Regulasi Telekomunikasi Indonesia/ BRTI). However, these

two bodies are not equal in the power they exert in policy making.

A. The legislative and the Judicative Actors

These institutions determine the sustainability of a certain law or regulation

legally and politically. The recent DPR comprises of 560 members from 10 political

parties. The ruling party, which is the former President Megawati’s as well as the

incumbent President Joko Widodo’s, Partai Demokrasi Indonesia Perjuangan

(PDIP), which consists of 109 members and the oppositions7 of 152 members (DPR,

2015). In general, the DPR has three main functions: legislating, budgeting and 7 The main opposition parties are the previous President Susilo Bambang Yudhoyono’s Demokrat

Pary and Bakrie’s Golkar party

Diagraph 1. Interrelation between regulators

Kominfo

BRTI KPI

K

The President

(Executive)

The DPR

(Legislative)

MK and MA

(Judicial)

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monitoring. Hence, it is authorised to draft, to enact, as well as to adjourn the laws.

Nevertheless, the Law of the State (UUD 1945) also mandates the President to

propose the bills through the admissible Minister8. Though DPR initiate a certain

bill, it may demand the executive or interrelated regulatory body to submit its own

version of the bill in the assembly9.

Based on the law10

, the members of DPR are divided in to eleven commission

groups with each of them responsible for a certain coverage of affairs. The

Commission I is responsible for supervising four affairs: defence, foreign,

intelligence, and Communication and Informatics. The Commission has 15

governmental institutions as working partners, which include the Ministry of

Defence, the Ministry of Foreign Affairs, and Kominfo (DPR, 2015). The

Commission conducts regular meetings with these institutions that include a

Working Meeting with the Minister and Hearing forum with the officials as well as

with the public. In the beginning of this year, the Commission I and the Kominfo

agreed to prioritize three bills in their discussion as part of the 2015 legislative

national program, which encompasses: the DPR’s draft proposals the Broadcasting

bill and Radio and Television of Republic of Indonesia, and the Kominfo’s draft

proposal of Telecommunication bill. Beside these bills, both institutions are willing

to work upon digital TV migration and national broadband development (Komisi I

DPR, 2015).

B. The Judicial actors

The Constitutional (Mahkamah Konstitusi) and the Supreme Court (Mahkamah

Agung) are the judicial actors which are responsible for enforcing the legal system

based on Pancasila and Undang-Undang Dasar 1945 (UUD 1945) as the laws of the

state. These two institutions have different tasks and roles. Based on the amendments

of UUD 1945 (1999-2002), the Constitutional Court and the Supreme Court are

authorised to conduct a judicial review of existing laws (Undang-Undang) and the

8 The procedures of bill proposal both from the DPR and the government are regulated in the

formation of law regulation Law No. 10/2004. 9 In the discussion of broadcasting revision bill, the DPR demanded both Kominfo and KPI to submit

its own version of revision. 10

Law No. 17/2014 about the House of Representatives and Parliament

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constitutional regulations11

respectively in Indonesia. Even so, these institutions are

not eligible to conduct judicial reviews towards a ministerial decree unless it is

amended in one of the constitutional regulations (Nalle, 2013:4). The decision of

judicial review determines the legal consequences of a certain policy. Nevertheless,

there is a way for the executive actors to “avoid” the decision. In 2012, the

association of Indonesian Television appealed a judicial review of the Supreme Court

over Ministerial Decree No.22/2011. A year later, the Supreme Court granted the

appeal and revoked that decree. This decision has implications for the ongoing

analogue-digital migration, specifically the Kominfo’s target of analogue switch off

in 2018. Nevertheless, the Kominfo argues that the Supreme Court’s decision was of

the non-retroactively binding type which means that the existing multiplexing license

holder based on the previous decree remains valid (Siaran Kominfo, 2013).

C. The Executive Actor

Kominfo has been formed several times restructurings after reformasi (the

collapse of Soeharto’s regime in 1998). Under Soeharto’s regime, it was known as

Departemen Penerangan (Deppen) which used to be served as the government’s

propaganda tool and media controller, both for the content and the license. The

deppen was diminished in 1999 and the successor has a smaller scope of authority12

.

As the ICT’s role in the national economy increased, Megawati established the State

Ministry of Communication and Informatics in 2001. In Yudhoyono’s administration

(2004-2014), the role of Kominfo as ICT regulator strengthened, including the

reassignment of the Directorate of Post and Telecommunication (or known as Postel)

from the Ministry of Transportation in 2004. The Postel reassignment triggered a

dispute between the Ministry of Transportation and Kominfo since it is a strategic

and ‘lucrative’ directorate for both ministries (Donny, 2001)

Postel was ruptured into two Directorate Generals (DGs): the post and

informatics providence (Penyelenggaraan Pos dan Informatika/PPI) and the post and

informatics resources (Sumber Daya Perangkat Pos dan Informatika/SDPPI) in 2010.

The difference between these DGs lies in their authority coverage. The PPI was

11

The constitutional regulations, according to the Laws No.12/2011, include the Government Regulation, the Presidential Regulation, the Provincial Regulation, and the Municipal Regulation. 12

During 1999 – 2001, the national information and communication body was established which was directly under the Presidential office and served as government’s public relations for domestic issues (Donny, 2001).

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authorised to formulate the broadcasting and telecommunication policies. While, the

SDPPI was authorized to manage the frequency and certify the telecommunication

hardware and infrastructures. In the organisational structure of PPI, there are five

directorates13

. As the regulator, the procedure of policy making process in this

directorate involves third parties such as consultants, experts and ICT stakeholders

(industry). In the preparations of the telecommunication industry’s grand design, for

instance, the assigned team launched a pre Focus Group Discussion with the

stakeholders before drafting began. The assigned team gathers input and suggestions

internally and externally (to the public), before finalisation and gets approval from

the Minister.

D. The Independent Regulatory Body

There are two independent regulatory bodies (IRB) which have important role

in determining the media and telecommunication regulations: the Indonesian

Broadcasting Commission (KPI) and the Telecommunication Regulatory Body

(BRTI).These two bodies are public representative institutions which work as

advisors for the government and as ‘counter balance’ to avoid any abuse of power.

They were established based on the mandate of the 2002 Broadcasting Law (KPI)

and the 1999 Telecommunication Laws (BRTI) which were initiated by the DPR and

the Kominfo respectively. As a result, KPI and BRTI build different ‘nature of

relation’ to Kominfo and eventually both exercise different degree of influence in the

policy making process. Nugroho, the BRTI commissioner, argues that BRTI has

mutual partnership with Kominfo, whereas KPI positions itself as an opposition to

Kominfo (personal interview, 2015).

KPI

The 2002 Broadcasting Law gave the KPI a similar authority as Kominfo in

regulating the broadcasting industry. KPI and Kominfo collaborate to arrange the

number of as well as the coverage area of local, regional or national based

broadcasting TV and radio; restrict the media and cross media ownership; issue the

13

1) Special purpose of Telecommunication, Public Broadcasting, and the telecommunication Universal Service Obligation or USO; 2) Post; 3) the Post and Informatics Controller; 3) Telecommunication; and 4) Broadcasting.

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broadcasting license; and arrange the implementation of a networking based

broadcasting system for TV14

. Furthermore, KPI has the authority to regulate the

broadcasting content15

. The structure of KPI as organisation comprised of a central

KPI and 33 KPIs in the provinces. The KPI central has nine commissioner members,

while KPI provinces have seven commissioner members. The members are

authorised to elect and assign the Chairman and the Deputy for a three year working

period.

As a constitutional institution, KPI was challenged particularly by the

broadcasting associations and then was judicial reviewed by the Supreme Court in

2003. The Supreme Court’s verdict was that the Clausal 62 of the Broadcasting Law,

which states that “KPI and the government are authorised to initiate the Government

Regulation”, contradicts to the Clausal 5 verse 2 UUD 1945 that acknowledges the

Government Regulation is President’s legislative law product. Hence, the court

imposed the ‘limitation of power’ principal to KPI so that it cannot conduct

legislative, executive and judicial functions (the Supreme Court verdict document

No.031/PUU-IV/2006, p.50-51). The verdict came out after KPI appealed to the

court for legal certainty due to the unclear and contradictive clausal of the

broadcasting law16

. KPI postulated that these contradictive clausal have harmed its

constitutional rights as an independent state institution.

Another issue of KPI’s authority lies in its judiciary function. It was perceived

as potentially possessing repressive power to control the broadcasting industry as the

Old Order regime’s Departemen Penerangan used to have. The broadcasting law

amends judiciary function to KPI which was regulated in the Clausal 55 verse 1-3

and also Clausal 34 verse 5 which state that KPI has authority to issue various

sanctions: administrative sanctions (official warning letter, temporal termination of

the program, reduction of broadcasting duration and time), fines, and license

revocation. Departemen Penerangan used to have these judiciary functions which

are able to abolish media, mostly newspapers, if they are proven to be anti-

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As mandated on the Clausal 18 (3) & (4), Clausal 29 (2), and Clausal 31 of the Law. 15

KPI issues Pedoman Perilaku Penyiaran and Standar Program Siaran (P3SPS) as a the standards of broadcasting programs and classifications. However, this P3SPS cannot be imposed for online (e-paper or video streaming) and paper based content (newspapers) 16

The Clausal 62 verse 1 and 2 states that “the broadcasting regulations should be made in the Government Regulation format. Whereas, the Clausal 7 verse 2 states that “KPI, as an independent regulatory body, is authorised to regulate broadcasting…”

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government. These clausal potentially harm the freedom of expression that were

amended in the Chapter XA and the Clausal 28 I verse 2 of amendment of UUD

1945 (the Supreme Court document, 2003:4). Ultimately, KPI is positioned

ambiguously between the DPR and Kominfo. The DPR has influence on the

composition of the KPI commissioners17

. Also, it is authorised to supervise and

evaluate KPI’s performance based on the law. Though, KPI’s financial budget relies

on Kominfo’s. The administrative secretariat of KPI was administered by echelon II

of Kominfo.

BRTI

The Indonesian Telecommunication Regulatory Body (Badan Regulator

Telekomunikasi Indonesia or BRTI) was established based on the Ministerial Decree

of the Minister of Transportation No.31/200318

. BRTI has three functions: managing,

controlling and supervising the network telecommunication providers and the service

telecommunication providers. Hence, its authority includes issuing the license,

setting the standard for operators, determining the interconnection fee, and also

supervising the competition. Unlike KPI, BRTI has no representative offices in the

provinces. It has no own budget and relies to Kominfo’s as well.

The decree enacts the formation of Komite Regulasi Telekomunikasi (KRT)

which is the central agent of policy making in BRTI. KRT encompasses a maximum

of seven members of which two of them are high officials of Kominfo19

. Except the

Chairman and Deputy, the working period of the members is three years and can be

reassigned by the Minister of Kominfo in the following period. BRTI has no

authority to issue regulations equal to the Ministerial Decrees. Even so, it can initiate

policy issue and conducting policy assessment to Kominfo. Nugroho argues that

BRTI encompasses of experts who have credible experiences and competencies so

that they can easily force Kominfo to issue policies for the sake of the industry

(personal interview, 2015).

17

The commission 1 DPR forms a committee to organize the open recruitment to select the candidates as well as to conduct a fit and proper testing of selected candidates. 18

later changed into the Ministerial Decree of Kominfo No. 25/2005 19

Currently, the chairman and the deputy of BRTI are the Director General of PPI and Director General of SDPPI respectively. Both director generals are titled as echelon I, the highest rank of official in Kominfo.

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CHAPTER II

LITERATURE REVIEW

Convergence is collision of, which once used to be separated, three industries:

media, telecommunication and computing. Doyle (2002:3) argues digitalisation

drives convergence, as he calls “Digital Revolution” where telecommunication and

media add digital contents and services. The commercialism of internet and the

growing of smartphones or mobile devices sales have changed the distribution and

the consumption of broadcasting contents, particularly TV. The digital platform

enables TV to create an interactive platform for audience participation. There are

various digital platform for television such as the digital terrestrial television

broadcasting (DTTB), HDTV, IPTV, social TV20

, internet mobile TV, catch up TV21

.

According to ITU, there is massive migration from TV analogue to the digital with

over than 55 per cent over the world. Brahima Sanou22

argues that this transition will

provide opportunities for ICT applications and multimedia services development and

also contribute the efficiency of spectrum usage for wireless broadband technology

(ITU, 2012:1)

Convergence restructures the broadcasting and telecommunication industries

from vertical-integrated to horizontal-integrated industry which lead to what some

scholars call as ‘network value chains’ (Writz, 2001; Peppard and Rylander, 2006;

Evens, 2010). This network value chains enforces a company redraws its value chain

by creating network with other companies that support the digital-based values.

Writz (2001) already predicted that unbundled and rebundled within the value chain

are likely to happen both in media and communication industry (figure 1.).

Nowadays, there is growing trend that telecommunication operators offer double

play23

or triple-play24

bundle type of services. Digitalisation offers greater variety

channels, multilateral transmission and distribution methods for terrestrial TV

20

Social TV can be understood as the merging of TV and social media such as a news TV program

display comments of its viewers on Twitter or Facebook. It also refers as a mobile application that

unicast several free-to-air TV channels such as FangoTV, Beamly and TVtag. 21

Catch up TV refers to a service that provided by a broadcast TV station to store its programs so that

the viewers can watch the programs outside the broadcasting time schedule (e.g.: FetchTV.com,

Freeview.com) 22

The Director of Telecommunication Development Bureau of ITU 23

Cable TV and Internet bundle type of service 24

broadband, subscription TV and fixed telephone bundle service

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providers (Song and Park, 2005:271; Menezes, 2009:84). Todreas (1999 in Menezes,

2009) argues that the abundant channels cause devaluation of transmission in TV

value chain so that forces the broadcaster to more focus on content production.

Digitalisation also opens more participation form other players, including

telecommunication operators, in the market. As Ganuza and Viecens (2014:62) see

opportunity that telecommunication operator could expand its business as content

provider especially fourth generation25

of TV technology which is internet TV.

The increasing of content and value added services generate the increasing of

data consumption and traffic. Therefore, it forces the telecommunication operators,

especially access providers, to expand its capacity to deliver the electronic

information. Baran (1997:127) argues that “the issue of capacity or bandwith is

central to the economics of the internet and other telecommunication systems’. Yet,

the capital investment for bandwith enhancement is imbalance with the revenue of

data consumption or known as “scissor effect” which particularly occurs in mobile

25

The first generation is TV analogue, the second generation is IPTV, cable TV, satellite TV. The

third generation is high-definition TV.

Figure 1. Reconfiguration of Value Chain Structures (Writz, 2001:495)

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cellular market. This phenomenon should be critically assessed. Blennerud (2010)

argues that the common mistake of scissor effect is assuming traffic equals cost.

There are three growth phases of mobile broadband: 1) Uptake and growth phase (an

initial launch of broadband product where traffic and data consumption relatively

low); 2) differentiating services phase (prepaid package and plans introduced attract

new as well as advanced subscribers, the market expands toward saturation, and so

the data traffic); 3) connecting everything phase (traffic is at the maximum level and

cost will not decrease further). A mobile operator is able to get a profit during phase

one and two. In phase three, an operator introduces a more efficient technical

solution such as Long-Term Evolution (LTE/4G) in order to attract new subscribers.

Beside the scissor effect, another effect of convergence in telecommunication

industry is the notion of Over the Top (OTT). OTT is all the services, applications

and contents that run on the telecommunication networks, or portrayed as free-rider

(Leal, 2014). The prominent examples of OTT are social networking sites and instant

messaging apps. The debate around OTT reveals what known as ‘Net-Neutrality’, a

battle between ISPs and content providers about the provision of new revenue

resource verses “a system of belief about innovation” in the network platform (Wu,

2003)

The purpose of broadcasting and telecommunication governance is to facilitate

the transition of both sectors towards convergence without creating entry barriers for

new players as well as to maintain conducive market and stimulate convergent

industry growth. It is obvious that government needs to change its strategies to

regulate these sectors from concentrically separation between physical network

infrastructure and the content broadcasting provision (Blackman, 1998: 165) into

convergence. Flew (2012) proposes “horizontal layers” policy approach which

divided into four layers: infrastructure, access devices, application or content

(mobile) services and content (p.5). Most countries have gone through different

strategies and models of regulatory convergence which depended on its political,

legal, administrative systems. Some countries have succeeded to blur two separated

bodies of broadcasting and telecommunication26

whereas able to form a convergent

26

e.g. Korean Communications Commission in 2008; Thailand’s National Broadcasting and

Telecommunications Commission in 2010

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institution in the beginning27

. In her study in UK, India, Malaysia and South Africa,

Garcia-Murillo (2005:21) finds that the reduction of transaction cost becomes

feasible in the formation of regulatory convergence at least to address tensions that

may arise during the adaptation of convergence technology in the industry as well as

in the market.

The regulatory convergence is not simply to merge two existing bodies since

the broadcasting and telecommunication have their own distinctive historical

background which determines the nature of governance in these sectors.

Telecommunication industry such as in Malaysia, Thailand, Singapore and Indonesia

have gone monopoly towards liberalisation (Lee and Findlay, 2005; Alsagoff and

Hamzah, 2007; Xavier, 2008). Still, the governmental intervene in

telecommunication industry to some extent remains prevailing. Telecommunication’s

resource such as spectrum is scarce resource that impacts to whole society.

Furthermore, giving an open access to the internet is promoting human right “to

achieve their full potential in promoting their sustainable development and

improving their quality of life…” (WSIS 2003 declaration of Principles). In

broadcasting industry, the main challenge is the domination of political interest in the

policy making process. The Romania’s audio-visual autonomous regulatory body

CNA, for instance, the election of high officials of this organisation is heavily

influenced by the parliament (Avadani and Ghinea, 2014:74). This is what Avadani

and Ghinea (2014) call “the ‘piranha’ effect model” where public interests are at the

stake for individual or political party interests. Another challenge in regulatory

convergence is conceptualisation or classification of converging equipment,

technologies and services (Shin, 2005). Internet Protocol Television (IPTV), for

instance, the fierce debate about it lead to regulatory classification problem since it

provides two type of services: “’wall-garden type’ (closed content distribution

networks) and a free web-based type (video streaming over the public internet)” (Lin,

2013:675). It is important to have ground understanding about concepts so that the

upcoming regulations would effectively regulate the standards and licensing matter

of converging technologies and services.

27

e.g.: UK’s Ofcom in 2003 or Malaysian Communication and Multimedia Act and Commission

which enacted and established in 1998

19

Both state (the parliament, the autonomous bodies, the inter-governmental

bodies, and the courts) and non-state actors (media professionals associations, NGOs,

civil societies, communities and individuals) exert their power and influence one

another in broadcasting and telecommunication policy making process. Conflict of

interests or authorities, in most cases, is evitable especially between the

governmental and independent regulatory commissions. It happened in Korea, the

dispute between KBC28

and the MIC29

occurred when they imposed contradictive

approach and regulations in broadcasting and telecommunication industries business

and administration which eventually create confusion in the market (Kim, 2011:156).

The previous study about convergence in Indonesia is heavily on media

industry point of view. Tapsell (2014) finds the correlation between convergence and

concentration of Indonesian media ownership which would affect the democracy

sustainability. “convergence is spurring conglomeration because the big media

companies believe they must be multiplatform news providers … in shorts, big

media is getting bigger in the era of convergence in Indonesia” (p.6). Even so, her

research focuses on some media group companies30

, particularly news media,

addressing the convergence trend. Nugroho and his colleagues (2012) in “Mapping

Media Policy in Indonesia” offers more nuanced study about Indonesian media

landscape (private, public and community-based TV, newspaper, and radio) by

looking its historical and dynamic progress in different regimes. At least there are

nine key findings in their study which the most imperative finding is the failure of

existing regulatory policies to address the key media issues such as the feasibility of

content and ownership diversity in media industry. Nevertheless, their supporting

primary data, which is based on interviews, did not cover the Ministry of

Communication and Informatics31

. In term of digitalisation and convergence, they

conclude these are challenges for the government particularly to provide a greater

access to the society and for economic development in regions (p.114). Hence, this

study focuses on the regulatory point of view to address the convergence issues,

particularly towards analogue switch off for TV. Moreover, this study also reveals

28

Korean Broadcasting Commission 29

The Ministry of Information and Communication 30

Tapsell interviews the owner of Berita Media Satu Media Holdings, Kompas TV, and Media

Indonesia Group 31

Or kementerian komunikasi dan informatika (Kominfo)

20

the government’s scenario to address the impact of convergence on

telecommunication industry.

21

CHAPTER III

METHODOLOGY

This is a descriptive study that employs a qualitative methodology which

basically relies on the meaning and interpretation. Scholars such as Merriam (2014)

and Barbour (2008) argue that qualitative research is seeking to understand people

interpretation and meaning construction. Merriam (2004) furthermore, suggest four

characteristics of qualitative study: “the focus is on process, understanding and

meaning; the researcher is the primary instrument of data collection and analysis; the

process is inductive; and, the product is richly descriptive” (p.14). Instead of

inductive process, this study is describing the meaning and the experiences of

participants that established on a case which is the Indonesian media and

telecommunication governance. Stake (2005) suggests that case study, for qualitative

research community, “concentrates on experiential knowledge of the case and close

attention to the influence of its social, political, and other context” (p.444).

Moreover, the case researcher does a reflective work which tries to dig deeper into

meanings and relate them to the context and experience. The context itself could be

various ranges: historical, social, economic, political, ethical, and aesthetic (p.449).

This study does not look for generalisation since the locus of this study is

Indonesia and the subject of this study is Indonesian regulatory officials who

involved in media and telecommunication sectors. One of five areas that qualitative

research unable to accomplish, according to Tuerney and Clemens (2011), is

generalisation due to the small size of the sample or case based study. In addition, the

qualitative researcher is unlikely able to be objective or act independently as possible

from the object of the study since the qualitative research design and data analysis

employ human interpretation and knowledge. “… that qualitative work’s goal begins

with the assumption that one’s methods necessarily involve less organization and a

greater attempt at understanding an environment or people holistically” (p.69). The

construction of this study relies on experiences, perspectives, knowledge of the

subject that involved in this study. Therefore, the primary tool of this study is in-

depth interview which is a central methodology for public policy research as well as

“critical research method for the study of government” (Jiwani and Krawchenko,

2014:57). Interviewing is the best way to capture the factors that influence the policy

22

making process, such as historical, institutional, formal and informal internal factors.

Brower and colleagues (2000) classify these factors as 1) ‘backstage’ that sizes “the

emotional life, the frustrations, and the tactics, and the strategies involved in public

service”; and 2) ‘frontstage’ that refers as “a formal process are often most evident

and accessible in the study of public administration” such as formal public

announcement (p. 58).

This research adapts the new institutionalism. The new institutionalism

approach is a specific variant of qualitative research. Galperin (2004) suggest that

new institutionalism approach have two important starting points. First, the decision

making procedures are not always in favour for powerful interest groups. Second,

there are some significant factors that determine the position of bargain in policy

making process. These factors can be judicial reviews, political system or procedures

in the regulatory institutions. The new institutionalism is new approach that roots

from previous studies of Max Weber, Thorstein Veblen, and Karl Polanyi

(Stinchcombe, 1997 in Galperin, 2004:63). This approach implies broader formal and

informal range of institutional context that capable as well as constraint both policy

makers and interest groups to pass certain laws or regulations.

The sampling technique of this study based on non-probability sampling

technique where researcher purposely selects participants based on their

competencies, experiences, and having incumbent title in the selected institutions

that in charge in determining media and telecommunication policies in Indonesia.

Patton (2002) argues that purposeful sampling biggest advantage lies in selecting

information-rich informants and relevant for in depth study (Merriam 2009: 77). The

researcher conducted face to face interviews with at least eight participants, while

one participant was able to answer via email, during the third week of January to the

fourth week of February 2015. However, only six of them are quoted in the report.

They are currently entitled to certain positions in the governmental institutions –

Kominfo, BRTI and KPI – and directly in charge directly to certain issues that

discussed in this research. They are as follows:

1. Dr. Judhariksawan, S.H., M.H, head of the Indonesian Broadcasting

Commission (Komisi Penyiaran Indonesia/KPI)

2. Dr. Riant Nugroho, a commissioner of the Indonesian Telecommunication

Regulator Body (Badan Regulator Telekomunikasi Indonesia/ BRTI)

23

3. Ir. Anang Latief,M.Sc, the head of sub Directorate infrastructure development,

Directorate General the Post and Informatics Providence, The Ministry of

Communication and Informatics (Kementerian Komunikasi dan Informatika/

Kominfo)

4. Gunawan Hutagalung, the head of sub Directorate Feasibility of

Telecommunication System, Directorate General the Post and Informatics

Providence, Kominfo.

5. Syaharuddin, S.T, M.T, the head of Television, Directorate of Broadcasting

Directorate General the Post and Informatics Providence, Kominfo.

6. Tantowi Yahya, member Cimmission 1 of the House of Representative

(Dewan Perwakilan Rakyat/ DPR)

Beside the interview, the research also use secondary data encompasses reliable

documents such as governmental documents (e.g: ministerial decrees or court

decision documents), press releases, news, statistical reports, presentation slides, and

other supporting documents that relevant to verify the interview findings. The

availability of secondary data allow researcher to expand the findings so that will

give details and more nuanced description of media and communication governance

practices in Indonesia.

The validity of qualitative research depends on how researcher is able to

present the conceptualization, the data collection and analysis, and the presentation

of findings in details and logical sense (Firestone, 1987; Merriam, 2009). Lincoln

and Guba (1985) develop four criteria of validity of the qualitative findings:

credibility, transferability, dependability, and confirmability (Tuerney and Clemens,

2011: 64). Credibility criterion means that researcher able to present data that derive

not only from the primary tool but supported based on secondary data researches.

Transferability refers to external validity of quantitative studies. This can be

achieved when the findings of the qualitative study can be applied in other similar

studies. Dependability is a reliability dimension of the qualitative study, which

applies the origin of data and time dimension of data collection. The last,

confirmability which “the goal is to enable the reader to see the train of thought of

the researcher to determine how he took a piece of data, analysed it, and the reached

a plausible conclusion” (p.65). The qualitative researchers tend to refine these criteria

and develop the way to judge it through their studies.

24

Field Work and Ethic Issue

Data was collected by 30-45 minutes semi-structured type interviews. A set of

questions that addressed core areas of research was used (see appendix 1). The semi

structured question format allows researcher to be flexible to expand and explore the

dimension of each questions. Merriam (2009: 90) argues that this format would

allow researcher to be responsive to emerging idea and point of view of respondents.

Bertrand and Hughes (2005:74) contend that flexibility also allows participants to

express their point of view, experiences and perceived values so that the result would

be “rich and interesting”. All interviews conducted in Indonesian language which

were recorded and transcribed into written text. Any statements that appeared in

transcribe would be analysed based on the relevance degree to the questions and its

significance to the issue that risen during the interview. Richards (2005) argues that

analytical coding “comes from interpretation and reflection on meaning” (Merriam

2009: 180). Researcher also applies the comparative techniques between those

significant categories that appeared distinctive from one to other transcribes in order

to reassess the existing categories.

In term of ethical issues, the researcher had fulfilled the requirement of ethic

approval procedures based on the University of Melbourne’s Office of Research

Ethic and Integrity (OREI) during October and November 2014. This research

classified as Minimal Risk Human Ethic. Based on the national statement on Ethical

Conduct in Human Research, “the values of respect for human beings, research merit

and integrity, justice and beneficence, help to shape that relationship as one of trust,

mutual responsibility and ethical equality” (OREI website, 2015). Each participant,

who gets involved in this research, had been given Plain Language Statement

(Appendix 2.) consist of general descriptions about the study including the purpose

of the study and the interviewing and report procedure and submission based on the

University of Melbourne policy. The participants also signed the Consent Form

(Appendix 3.) as an approval for researcher to:

a. Disclose their identity which encompasses the name and title of the job in

the report as long as the data presented does not pose risk their job and the

institution itself.

b. Video-tape the interview and the audio-tapes will be stored at the University

of Melbourne and will be destroyed after five years.

c. Forward the copy of the report to the participants

25

Chapter IV

RESULT and DISCUSSION

IV.I. Media and Telecommunication Convergence: the issues

IV.I.A Broadcasting Sector

The shifting of the Indonesian broadcasting sector is underway from

centralisation to decentralisation. The 2002 Broadcasting Law Chapter III amends

the “TV network system” or Sistem Siaran Jaringan (SSJ) which requires the

existing Jakarta-based national broadcast free-to-air (FTA) private TV stations32

and

one public TV station to affiliate with local TV stations at least at the provincial

level. This system commenced in 2009 after Kominfo enacted the Ministerial Decree

(MD) No. 43/2009 which segregates TV stations into two entities: ‘the central’

(mostly Jakarta based TV stations), and ‘the member’ (which are located in the

capital of provinces as well as in municipal or district regions)33

. During the

transition, the existing TV stations are allowed to broadcast nationally until the

establishment of the local TV station34

. In terms of ownership, the system strictly

prohibit Jakarta’s media group owners to own more than 50 per cent of shares in the

local TV stations. Based on the Kominfo 2011 statistics that show that three Jakarta

based TV stations have implemented this system in 33 provinces so far. The

remaining TV stations have the network within the range 24 to 29 provinces (Buku

Putih Kominfo, 2012:51).

The implementation of SSJ system is ideally aimed at preserving the “diversity

of ownership and diversity of content” (Sudibyo and Patria, 2013:260) by reducing

the centralisation and conglomeration of media ownership by the few tycoons in

Jakarta. However, the existing regulations do not strictly implement this system. The

Broadcasting Law (Clausal 18) and the Government Regulation No 50/2005 (Clausal

36) allow Jakarta based TV stations to broadcast to a maximum 75 per cent of a total

33 provinces and broadcast their contents to up to a maximum of 90 per cent of local

TV stations every day. The aim is to enhance local TV stations to be more

independent and to be able to compete with Jakarta based TV stations. This would

32

There are 10 national private FTA TV stations: RCTI, SCTV, ANTV, Trans TV, Trans 7, MNC TV, Indosiar, Metro TV, TV One, Global TV. All of them based in Jakarta, the capital city of Indonesia. 33

Chapter IV of MD No. 43/2009 34

clausal 11 and 12 of the MD

26

not be likely achieved with these regulations. There are four TV groups35

that

dominated the 10,682 billion IDR of the ad spending market share in 2011

(Nusantoro et al., 2012:12). Nusantoro and colleagues argue that the TV networks

need to maintain an audience share of above 12 per cent in order to maintain the

advertising pricing power (p.11). Media Nusantara Citra (MNC) media group, for

instance, had at least a 40 per cent36

share of the prime time audience by the end of

2013 (Indonesia Investments website, 2015). It is nearly impossible for local TV

stations to compete with big media groups to get the audience as well as the

advertising share on a national scale. The dependency of local TV stations on the big

media group will be relentless in terms of content. The MD enacts an equal

proportion of national and local contents that broadcasted by the local TV stations

but without any specific time table or target for the implementation. While the big

media groups enjoy the huge market share, it is unlikely for them to reduce their

content in the local TV stations.

Beside the implementation of TV network system, the industry is challenged

by migration of TV terrestrial from analogue to digital terrestrial television

broadcasting (DTTB). Based on Kominfo’s middle term of development plan 2015-

2019, the target of analogue switch off (ASO) nationally is in 2018 (Bappenas,

2014). In order to achieve this target, Kominfo initiated the roadmap of DTTB in

2009 by introducing the multiplexing system which allows multiple digital data

transmissions in a single signal or shared medium. During the 2011 and 2012,

Kominfo enacted some MDs to induce the implementation of the system in the

industry that including: MD No.22/2011 (then replaced with MD No.28/2013)

stipulates the Multiplexing (MUX) operators and the content providers; MD

No.23/2011 stipulates the usage of 478-694 MHz spectrum radio for DTTB; MD No.

05/2012 stipulates the usage of Digital Video Broadcasting – Terestrial second

generation (DVB-T2)37

equipment.

Kominfo divides the Indonesian geographical archipelago into 15 Multiplexing

zones based on the MD No.7/2009 and each zone has different number of service

35

36% MNC group (RCTI, MNC TV, and global TV); 22%Trans Corp (Trans TV and Trans 7); 22% EMTEK group (Indosiar and SCTV); and 16% Visi media Asia (TVOne and ANTV) 36

MNC group has three FTA TV stations : RCTI has 21.5 per cent average audience share, MNC has 12.2 per cent prime time audience share, and Global TV has 6.4 per cent prime time audience share (Indonesia Investment, 2015) 37

The DVB-T2 is able to provide at least 12 broadcasting slots for Standard Definition TV (SDTV)

27

areas (as seen on Picture 1.). Based on the MD No. 32/2013 Clausal IV Chapter III,

the MUX operators are allowed to serve more than one multiplexing zone in one

province except Jakarta and its four suburbs38

and Jogjakarta-Solo. In order to avoid

monopoly, the chapter V of the MD restricts a multiplexer to use more than three

MUX slots for its own group of TV stations. Therefore, the MUX operator must

apply “open-access” and “non-discriminatory” principals (Chapter III clausal 5) for

its non-alliance TV stations, including its competitors.

The open recruitment of multiplexing stage I started in 2012 by offering five

MUX slots in each of five zones (as seen on table 1.). There were eight Jakarta TV

stations and one local TV selected in this tender39

. Another tender was held in 2013,

ten TV stations40

were selected as MUX operators to serve zone 1 (Aceh and North

Sumatera) and zone 14 (East and South Kalimantan). In the recruiting process, each

applicant was committed to provide set-top-boxes (STB) which were equipped for

the early warning system in the service zone (the MD No. 6/2013 document, p.16).

The STBs are provided for lower class society only. Kominfo also issued 101 digital

content provider licenses in eight provinces41

.

No Zone Province Service

Areas

Mux

slots

STB

quantity

Simulcast Period

1 4 Jakarta 1 5 4,846,418 Q1-2012 to Q2-2015

Banten 3 5 Q4-2012 to Q1-2016

2 5 West Java 11 5 463, 665 Q1-2012 to Q2-2015

3 6 Central Java 7 5 535, 779 Q1-2012 to Q2-2015

Jogjakarta 1 5 Q4-2012 to Q1-2016

4 7 East Java 10 5 825,197 Q1-2012 to Q2-2015

5 15 Riau Islands 2 5 6, 680, 827 Q1-2012 to Q2-2015

38

The suburbs are Bekasi, Tanggerang, Bogor and Depok. 39

They are TV One (2 zones), Metro TV (4 zones), SCTV (2 zones), TransTV (5 zones), Indosiar (2 zones), Global TV (2 zones), RCTI (2 zones), ANTV (2 zones), and local Banten-based BSTV 40

Zone 1 (RCTI, ANTV, Trans7, Metro TV, and Indosiar); zone 14 (Trans7, Global TV, TVOne, MetroTV, SCTV) 41

The digital content broadcasting license is given to private and public TV station so that their contents are eligible to be broadcasted by MUX operators in eight provinces: Jakarta, Banten, West Java, East Java, Jogjakarta, South Kalimantan, North Sumatera, and Riau Islands.

Table 1. Stage I MUX Recruitment

Source: presentation slide ‘Perkembangan Implementasi SistemPenyiaran TV digital’,

Directorate of TV, Kominfo and ITU, 2013

28

Table 2. Indonesia’s DTTB implementation schedules

Dates Proposals

13 August 2008 Soft launching DTTB broadcast testing at TVRI (public TV station)

20 May 2009 Grand launching DTTB broadcast testing at SCTV (private TV station)

3 August 2009 The initial mobile TV digital broadcast testing which organised by

community and telecommunication operators

Early 2010 The digital broadcast testing officially by the minister of Kominfo in

Bandung. At least 1,000 STB were given as part of socialisation

program

June-July 2012 The MUX operators tender, the issuing of digital content providers

licenses,

Early 2013 The launching of TV digital website https://tvdigital.kominfo.go.id/

and logo for wider public communication

2012-2015 Simulcast period of zone 4, 5, 6, 7, 15

2013-2016 Simulcast period of zone 2, 3, and 13 and part of service zone

1,8,10,11 and 12

2014 Simulcast period of service zones 9 and the remaining service zones

1,8,10,11 and 12

2015 70 % of provinces analogue switch off

2016 80 % of provinces analogue switch off

2017 90% of provinces analogue switch off

2018 Nation-wide analogue switch off

In the MD No. 18/2012, Kominfo designates the formula of MUX slots leasing

tariffs for the Multiplexer which is a Forward-Looking Long Run Incremental Cost

Plus (FLLRIC+) that encompasses the calculation of direct and indirect multiplexing

technology infrastructure costs and the company margin with a fair cost basis. Since

the Kominfo did not set the maximum price, thus it allowed the MUX operators to

Picture 1. Multiplexing Service zones

Source: the MD No.6/2013, p.12

Source: ITU’s roadmap for transition from analogue-DTTB in Republic of Indonesia 2012 report;

Kominfo’s TV digital Indonesia website; Kominfo’s RPJM 2015-2019

29

increase their margins in the government’s formula. The multiplexer must submit

their leasing calculation to Kominfo for evaluation purposes.

Whilst the evaluation of a multiplexing leasing fee is ongoing, there is a

growing resistance against this multiplexing system particularly from the local TV

stations. The local TV stations are incapable of providing financial resources if they

have to pay a similar leasing fee as the national TV stations. The government

acknowledges this issue.

“The local TV stations are concerned about the extra cost to rent MUX

channels during the simulcast period. It burdens their operational costs

to cover both analogue and digital. Based on our formula, the rental fee

of MUX depends on the capital and operational expenditure of the MUX

license holders. In the meantime, The MUX license holders mostly are

national based TV stations which have a sophisticated and costly towers

and transmission infrastructures. In consequence, the rental fee is

expensive” (Buyung Syaharuddin interviewed on 9 February 2015)

As illustrated, PT. Visi Media Tbk (VIVA), a media group company that owns two

national based TV One and ANTV, has to invest 300 billion IDR (+/- 23 million

USD) to provide multiplexing infrastructure in six provinces (Riska, 2014). In

addition, Anang Latif, the head of the sub directorate infrastructure development of

Kominfo, argues a non-technical barrier particularly to change the local TV stations

owner’s mindset to focus on the content production rather than distribution.

“It is not easy to ‘relocate’ the broadcasters who used to have their own

‘house’ to someone else’s property. There is different sense of pride. This

is what I see as non-technical aspect and we need more time to convince

them” (Anang Latif interviewed on 24 February 2015)

Apart from these issues, Anang Latif further expresses that the industry seems

reluctant to migrate to digital since it would diminishes the barrier for entrants which

eventually will make the competition in TV industry become heightened.

The absence of a higher legally binding power is the main counter argument of

the DPR, the KPI, the broadcasting community, and the academics towards the

implementation of multiplexing (AJI press release, 2014). The legal frameworks of

the multiplexing system are primarily based on the MDs. In the Indonesian legal

system42

, the MDs usually consists of technical details of the law. It can be judicial

42

Based on the formation of law regulations (pembentukan peraturan perUndang-Undangan) No. 12/2011 Clausal 7, there are seven sequences of legal hierarchy: 1) The Law of the State of Republic of Indonesia 1945 (Undang-Undang Dasar Republik Indonesia tahun 1945); 2) The People’s

30

reviewed43

if it conflicts with the related Law (Undang-Undang). In 2013, the

Kominfo’s MD No.22/2011 was judicial reviewed and terminated by the Supreme

Court since it stipulated two different broadcasting types: MUX operators and

content providers. The termination of the 2012 MD affected the validity of other

MDs44

. Not long after the Supreme Court decision, the Kominfo issued the MD

No.28/2013 which stipulates the existing FTA TV stations can be either as MUX

operators or content providers. It is possible that the recent MD would be judicial

reviewed and terminated in the future. Judhariksawan, the head of KPI, contends the

recent MD is a defect and against the 2002 Broadcasting Law since it does not

recognise the digital broadcasting principles. Therefore, the MD should be aborted

based on the lex Superior derogate lex inferior principal.

“The weakness of the law [the 2002 broadcasting law] is not visionary

regulation that would accommodate the upcoming technology. What

becomes the problem is the previous minister introduced the multiplexing

system which divides the broadcasting system into two different entities

which are the frequency and content providers. The Law does not

recognize the infrastructure owner and program [content] owner”

(Judhariksawan, the head of KPI, interviewed on 28 January 2015)

The definition of ‘broadcasting’ in the 2002 Broadcasting Law chapter 1 is “a

transmission of broadcasting contents through land, sea or space in the form of radio

frequency spectrum through air, cable, and/or other media that can be received

simultaneously”. This definition does not specifically state any provision concerning

any digital based transmission. Moreover, in the chapter 13 of the law does not

stipulate the multiplexing type of broadcast or any digital support broadcasting45

. In

this regard, the minister’s regulation must therefore be held to be void and

unenforceable. However, it must be noted that for subordinate regulations made

Representative Assembly Representative; 3) Laws/ Interim Government Regulation or Government Regulation in Lieu of Law; 4) The Government Regulations; 5) The Presidential Decrees; 6) The Provincial Government Regulations; and, 7) The Municipal Regulations. 43

Clausal 9 the formation of law regulation clearly states that existing legal regulations if contradicted to the higher level of the law can be judicial reviewed by authority (either the Supreme Court or Constitution Court). The La w also can be judicial reviewed if contradicted to the Law of the State (Undang-Undang Dasar 1945) 44

The MD No.6/2013, for instance, is the legal document of MUX operator tender recruitment for zone 1 and 14. In the appendix point 4.3, the winner of the Tender must fulfil what has been stipulated on MD No.22/2011 Clausal 5 (2) & (6) and clausal 6 (2). Those clausal mandate the license requirement for MUX operators and the usage of Single Frequency Network (SFN) radio spectrum. 45

In the chapter 13 of the law only recognize the four types of broadcasting: public, private, community and subscribing types

31

pursuant to the prevailing act to be held as void, the matters needs to be claimed

before the Supreme Court.

IV.I. B Telecommunication Sector

The Indonesian telecommunication sector has shown significant progress in the

last decade. It contributed around 292,402.6 billion IDR or 22.63 million USD for

GDP in 2013 (BPS, 2014). The main driver of this progress is the vast growing of the

mobile telecommunication industry (Rohman, 2014:6). As seen on table 2., the

growth of mobile penetration is exceeding the total population. There are at least

around 200 ISPs operating in the mobile market in Indonesia. It was triggered by the

availability of affordable mobile gadgets and competitive tariffs among operators.

There are at least 10 operators with 21 different brands in the mobile market.

Nevertheless, three operators dominated almost 80 per cent of the market share in

2013: Telkomsel (40.39 %), XL Axiata (22.36%), and Indosat (18.33%) (Dokumen

Konsultasi Publik Kominfo, 2015:10)

In spite of tremendous market growth, the mobile operators are in a saturated

phase. The operators are unable to increase their average revenue per users (ARPU)

although the data consumption continues to grow (as seen on figure 1.). This

condition is known as the ‘scissor effect’ (as seen on figure 2.). By comparison, the

data revenue of three operators (Telkomsel, Indosat, and XL) reached 1,456 million

USD in 2013 or increased 2,573.5 per cent from the 2009 revenue (54.46 million

USD). In the same year, the SMS service revenue reached 1,604.73 million USD or

increased 33.78 per cent from 2009 revenue (p.26).

32

There are two causes of this inverse trend: the unchanging customer communication

expenditure and the tight tariff competition among operators (Dokumen Konsultasi

Publik Kominfo, 2015:15). As an illustration, XL offers data ‘HotRod 3G+’ 3GB

capacity and 3.6 Mbps with tariff 200,000 IDR (less than US $20) for 30 days. With

the same speed 3.6 Mbps, Tri data package costs 125,000 (less than US $12) with

5GB capacity.

Figure 1. The comparison data traffic and Minute of Usage (MoU) voice

Source: Dokumen Konsultasi Publik Kominfo, 2015, p.14

Figure 2. ARPU Trend (per thousand IDR)

Source: Dokumen Konsultasi Publik Kominfo, 2015, p.15

33

No The key growth Year

Percentage 2000 2013

1 the fixed line telephony

subscription 6,662,605 40,165,000 502.8%

2 the mobile-cellular telephone

penetration 3,669,327 303,695,200

46 8,176.6%

3 The percentage of individuals

using the internet 0.93 % 15.82 % 14.89%

4 The fixed wired broadband

subscription 4,000 3,251,800 81,195%

Indonesia has progressively developed the broadband ecosystem since 2011.

There are two main national broadband development projects: Indonesia Broadband

Plan (IBP) and Indonesia National Telecommunication Critical Infrastructure Policy

(INTCIP). In October 2014, the former President Yudhoyono signed the Presidential

Regulation No.96/2014 to legalise the IBP project. This inter-ministries project cost

around 278 trillion IDR (USD$21.6 billion) from 2014-2019 (Majalah ICT website,

2014). By 2017, this project aims to increase mobile and fixed broadband usage to up

to 75 per cent of population47

. So far, the total fibre optic development reaches

41,151.6 km in Java, Sumatera, Sulawesi, Bali and Nusa Tenggara with a capacity of

2,071.18 Gbps. In Java Island itself, the development has reached 60.37 per cent of

its target (Buku Putih Kominfo 2012, p.22)

INTCIP is a policy protection scheme that aims to accelerate the national

broadband development. There are four policy plans: Open Access, Sharing

Infrastructure, Right of Way, and Protection Policy of Infrastructure Zone (Batubara,

2013). These policies will benefit both the government as well as the operators in

terms of efficiency in national budget and the capital expenditure respectively (Buku

Putih Kominfo 2012 p. LK10). Open Access and Sharing Infrastructure enable both

access and service providers to share and open their resources based on the lease

agreement. These policies will increase the efficiency of infrastructure costs (PPI

Annual Report, 2013). Kominfo issued the MD No. 19/2009 that enables the sharing

of telecommunication towers among operators. The MD for Open Access has not

46

This number is almost doubled to the population, which according to the National Bureau Statistic projection in 2010 was 238,518,800 47

The speed of mobile broadband targets 1 Mbps. The target for fixed broadband access for households is 40-75 per cent with speed capacity 2 Mbps while for the building is 50-80 per cent with speed capacity up to 1 Gbps.

Table 3. Indonesia’s Telecommunication growth 2000-2013

Source: ITU statistic website (accessed January 2015)

34

been finalised. The Right of Way and the Protection Policy of Infrastructure Zone are

the government’s incentives to a) remove barriers, and b) to offer protection for

telecommunication investment and infrastructure development, particularly in local

regions. The government’s national broadband plans augment the global institutions

broadband plans such as ITU, UNESCO, and ASEAN48

.

Beside infrastructure, the challenge for broadband development is the

availability of spectrum. It is an internationally consent that spectrum is a scarce

resource that should be distributed efficiently. The UHF and SHF is the common

frequency band that designated for telecommunication and broadcast industries. As it

seen on table 4., there is growing demand of frequency license on both UHF and

SHF. The main driver of this growth is the necessity to increase bandwith due to the

increasing data traffic. This growing trend of demand will create the available

spectrum become exhausted. Kominfo predicts that the mobile broadband spectrum

demand will be minus 500 MHz with the assumption of 60 per cent annual growth of

data traffic and 28.8 per cent annual growth of site tower deployment (SDPPI, 2014)

No Frequency

(spectrum)

Frequency

(band)

2011 2012 2013 2014

SMT-1 SMT-2 SMT-1 SMT-2 SMT-1 SMT-2 SMT-1

1 MF 300 – 3000

KHz 332 328 315 227 273 270 184

2 HF 3,000 KHz

– 30 MHz 5,764 5,571 5,324 5,381 5,620 5,286 4,676

3 VHF 30 – 300

MHz 24,482 25,081 26,199 27,223 23,707 24,662 25,945

4 UHF 300 – 3,000

MHz 103,338 103,724 103,848 104,165 103,796 104,111 104,398

5 SHF 3,000 –

30,000 MHz 109,782 197,107 231,185 247,336 276,412 295,147 313,588

Total 324,698 331,811 366,871 384,332 409,808 429,476 448,791

Source: Data Statistik SDPPI 2014

An effective spectrum management will ease the industry in adapting to the

new technology, particularly the Long Term Evolution (LTE/4G). At the moment,

the GSM (3G) providers such as Telkomsel, Indosat, and XL Axiata develop their

LTE technology in 900 MHz and 1800 MHz frequency band (Dokumen Konsultasi

Publik Kominfo 2015, p.10). Due to the outcome of the 11th

Asia Pacific

Telecommunity Wireless Group Meeting (AWG-11), Indonesia is likely to benefit

48

The ITU and UNESCO broadband commission 2015 targets: 40 per cent of households that have broadband access, the internet users in developing countries (up to 50 per cent), and affordable broadband service tariffs which are less than 5 per cent of monthly income. The ASEAN Masterplan on Connectivity targets the development of the Broadband Corridor in ASEAN in 2014 and the policy reformation for the Universal Service Obligation (USO), which is designed to accommodate the broadband development in 2015.

Table 4. The radio frequency license issued

35

from the 698-806 MHz spectrum band (known as 700 MHz sub band) for broadband

wireless access (BWA). This band has larger cell radius coverage than 900 or 2100

MHz spectrum bands so that it is not necessary to build a new transmitter station.

This band would reduce the capital expenditure up to 70 per cent and eventually will

reduce end users’ tariff (Ariyanti, 2013). Kominfo allocates the spectrum band 478-

694 MHz for FTA digital TV49

. However, the analogue FTA TV stations is located

in the 470-806 MHz spectrum. If Indonesian TV successfully migrated from

analogue to digital, it will create a digital dividend50

. Ariyanti (2013) studies the link

between investment and bandwith capacity ranging from 1.4 MHz to 20 MHz in four

types of areas: dense urban, urban, suburban, and rural. She finds that the best

scenario to optimise the LTE technology regarding digital dividends is three telecom

operators with 15MHz bandwith capacity for each, so that there is no need to add

further bandwith capacity and deploy the transmitter station until 2021 (p.206).

IV.II. Media and Telecommunication Convergence: the regulatory

scenarios

The notion of ‘Convergence’ appears in the Law No. 17/200751

. Yet, both of

the broadcasting and telecommunication Laws do not sufficiently regulate the

convergence technology in these sectors. In responding to this absence, Kominfo

initiates the MDs that regulate the specific convergence issues. For instance, the MD

No.15/2014 (previously the decree No.11/2010) is about the implementation of

IPTV. This MD stipulates that the IPTV license holder should have three kinds of

license: network, service and TV subscribed type broadcasting license. In addition,

the provider should build its IPTV device system based on the government

requirement which includes the data centre deployment in Indonesia territory

(Kominfo publication, 2014). Regarding content, the IPTV provider should fulfil the

minimum 10 per cent local content for pushed broadcasting content service and a

49

Based on the MD No. 23/2011 50

In TV digital, one canal RF 8 MHz could broadcast four to six MPEG-2 digital programs. While, one canal RF 8 MHz in TV analogue can broadcast a single program. The DTTB will create a spare of 112 MHz long from 470-806 MHz spectrum 51

The law stipulates the National Long Term Development Plan. In the chapter IV, ‘the Priority of 2005-2025 Development Plan’ states:

“The development of post and telematics to create knowledge-based society through the creation of competitive foundation in post and telematics industry; anticipate the implication of telecommunication convergence, information technology and broadcasting …”

36

minimum 30 per cent for pulled services and interactive services (Chapter 18).

Another prominent convergence regulatory issue is the existence of ‘over the top’

(OTT), content applications and services which run on telecommunication service

without any charge. According to Gunawan Hutagalung, the Directorate of

Telecommunication of Kominfo, Kominfo has been drafting the MD since 2013. The

upcoming MD will regulate the minimum requirement of service base cooperation

between telecommunication operators and OTT providers. There is a possibility that

the telecommunication operators will apply a fee to OTT providers.

The convergence needs a unified regulatory framework, however it is

unlikely to be achieved in Indonesia. There is dissent between the Kominfo

(executive) and DPR (legislative) in regulating broadcasting and telecommunication

convergence. At least, there are two emerging approaches: unification and

harmonisation. The first approach is to merge the convergence related laws: the

Broadcasting Law, the Telecommunication Law, and the Electronic Information and

Transaction law (ITE), into a single law, notably ‘the Convergence law’. The second

approach is to synchronise these existing laws to support the convergence. That

means these three Laws should be revised to enable the convergence service both in

these two sectors

“As matter of fact, unification is really hard to be done since there are

some laws that heavily political matters since it relates to public domain

such as broadcasting law and ITE law. Hence, the DPR argues that these

laws should be independent” (Gunawan Hutagalung, Echelon III sub-

Directorate Telecommunication, Kominfo, interviewed on 10 February

2015)

“In our constitution, it does not acknowledge the single law as an

umbrella for several laws. There is no nomenclature of ‘Convergence

law’ in DPR legislative programs. There are three laws (broadcasting,

telecommunication, and the ITE laws) plus public broadcasting bill

which will synchronised one to another (to support convergence). In the

future, the regulation of spectrum based business should be clear and

cannot be dismissed by other related regulation. The DPR and the

government are mutually agreed on this issue.” (Tantowi Yahya, the

DPR Commission 1 member, email on 28 February 2015)

Both Kominfo and DPR each have their own agenda in setting the upcoming

broadcasting and telecommunication regulations. In this year, the revision of the

2002 Broadcasting Law is a priority agenda of the 2015 legislative programs.

37

Whereas, The Convergence Bill52

and the Migration of Broadcasting from Analogue

to Digital Bill are part of Kominfo’s middle term development plans for 2015-2019

(Bappenas website, 2014). Therefore, the revision of Broadcasting and

Telecommunication Law will be the only way to adopt the convergence trend in

these industries.

Revision of the 2002 Broadcasting Law

The revision of the 2002 Broadcasting Law or Broadcasting Revision Bill has

become the most fierce and stagnant discussion between DPR, Kominfo and KPI.

DPR initiated this revision in its National Legislation Programs (Program Legislasi

Nasional/ Prolegnas) in 2011. The KPI and Kominfo have listed the issues that

emerged in the 2002 broadcasting law and submitted their own proposal of revision

to the DPR. Interestingly, both KPI and Kominfo struggle over the authority to

regulate the broadcasting industry. In its bill draft proposal, Kominfo replaces KPI

with Broadcasting Content Supervisor Commission (Komisi Pengawas Isi Siaran). It

means that the Kominfo does not recognise the role of the independent regulatory

body in formulating the broadcasting regulations, instead solely a commission that

supervises the broadcasting content. In contrast, the KPI’s draft bill introduces the

‘national broadcasting system’ which aims to restore and extend the role of KPI as an

independent regulator as well as a state institution. In Chapter III of the draft, KPI

has authority to issue the license and regulations, as well as supervise the content.

Also, KPI is authorised to give sanctions, including freezing or withdrawing the

license. KPI and the DPR share a proficient vision of this revision.

“The amendment of 2002 broadcasting law will regulate the

digitalisation, networking based system, the enhancement of public

broadcasting and the role of KPI. So far, KPI is independent adequately

although it uses the government budget. They (the KPI commissioners)

are quite critic to the government. In the future, KPI’s role will be

strengthened by allowing it to give a recommendation to issue and to

revoke the broadcasting license.” (Tantowi Yahya, the DPR Commission

1 member, 28 February 2015)

52

Kominfo aims for the submission of the Convergence Bill to the legislative in 2017. Kominfo has prepared the academic script since 2009 and harmonisation with the Ministry of Law and Human Rights during 2010-2012. The bill was included in DPR’s 2011 priority agenda, but not in the following years.

38

In the draft, KPI also proposes to strengthen its institution by making a strong

hierarchical structure between KPI central and KPI in the provinces (Article 9). The

authority of the head of KPI is also extended to include assigning the head and the

members of KPI province (Article 11). The KPI’s secretariat is employed by officials

titled ‘echelon I’ or one level under the Minister (Article 9 (5)).

Both KPI and Kominfo’s bill drafts do not specifically regulate convergence

technology in the broadcasting industry. The Kominfo’s draft bill, in Chapter III

Article 67-78, specifically discusses the analogue-digital migration through the

multiplexing system (the license procedures, the pricing formula, and the sanctions).

While the KPI’s bill draft revises the definition of broadcasting by adding the

‘multimedia’ technological dimension (Chapter 13). Regarding the centralised media

conglomeration, both KPI and Kominfo propose different regulations in their

proposals. The KPI’s draft bill clearly states that the centralisation of media

ownership by an institution or a person is prohibited. In contrast, the Kominfo’s draft

bill allows the limitation of media and cross media ownership53

.

IV.II.B Revision of Telecommunication Law

The revision of the 1999 Telecommunication law seems the only way to

provide legal framework for convergence in Indonesia. Kominfo is still drafting the

revision bill. Gunawan contends that the biggest challenge of this revision is to

transform the traditional broadcasting and telecommunication industries in to digital

ones, particularly to facilitate the interconnection and internetworking among the

value chains of the telecommunication industry that create the digital infrastructures

and networks as the foundation of the convergence ecosystem.

“Infrastructure and network digital are for broadcasting,

telecommunication, and internet. We no longer need to separate the

network between TV and telecommunication anymore. The convergence

occurs in the infrastructure level.” (Gunawan Hutagalung, Echelon III

sub-Directorate Telecommunication, Kominfo, interviewed on 10

February 2015)

There are five supporting broadband infrastructures: backbone, backhaul, access,

costumer-premises equipment (CPE), and application content. These supporting

infrastructures are the foundation of broadband ecosystem in Indonesia (as seen on

53

The limitation applies a maximum 100 per cent share of the first media, 49 per cent of the second media, 20 per cent of the third media, and 5 per cent of the fourth and so on.

39

figure 3.). The industry, particularly mobile service operators, is heading towards the

so-called ‘triple-play’ (voice, video and high speed data). Indosat54

, for instance,

cooperated with its Singapore based sister company Starhub to launch mobile

application features55

for the blackberry in 2004. A year later, it cooperated with

Nokia to launch Blackberry Connect56

(Indonesian commercial newsletter March

2011 report). Since 2009, Indosat enhanced its broadband technology in its 3G

network, and it even acquired its broadband retail subsidiary company Indosat

Multimedia Mobile (IM2) for efficiency purposes. Similarly, Telkomsel57

launched a

mobile e-money TCash. The growth of TCash is promising, it went from 8 million

subscribers in 2011 to 13 million in 2013 (SWA, 2014)

Both the 1996 Telecommunication Law and the Government Regulation No.

52/2000 are allowing the network telecommunication providers, including satellite

54

Indosat is the second largest of telecommunication operator (access and service) in Indonesia. It used to be a state owned company before it was owned by the Qatar based telecommunication operator (QTel) for 65 per cent, whereas Indonesia only owns a 14.3 per cent share. 55

Encompasses wireless e-mail, global address lookup, mobile data, and wireless calendar synchronisation. 56

An application to access blackberry features through Nokia 9500 and Nokia 9300 57

Telkomsel is the largest service provider in Indonesia and also is Telkom’s subsidiary company

Figure 3. Indonesian Broadband Ecosystem

Source: “kebijakan akselerasi pengembangan broadband di Indonesia” presentation slide (Kominfo

website, 2015)

40

mobile access or packet-switched58

based access providers, to provide the services59

.

Nevertheless, the network infrastructure of the special purpose telecommunication

provider, particularly for broadcasting, is not allowed to lease its infrastructure to

other telecommunication services60

. The primary challenge of the upcoming revision

bill is the provision to diminish the barrier between network, service and special

purpose type telecommunication providers, particularly in terms of physical

connectivity, applications and content. The government establish regulated prices,

terms and conditions, particularly the interconnection among network providers61

,

but not the physical layer unbundled network. The 1996 US Telecommunication Act,

for instance, envisions the new trend unbundled network element platform (UNE-P)

that allows telecommunication providers to use connections of incumbent local

exchange carriers to the customer’s premises (Tardiff, 2007:115). Werbach

(2005:80) argues the key of policy challenges in the convergent environment is

“connective layers”62

which lie in two critical leverage points: the physical

infrastructure and the user experience. These connective layers do not merely refer to

the open access debate, but also to the notion of network neutrality. “[W]hen network

operators provide their own applications and content, they do not necessarily crowd

out competitors” (p.81).

58

A digital networking communications method that groups all transmitted data into suitably sized blocks, called packets, that are transmitted via a medium that may be shared by multiple simultaneous communication sessions. It improves technological convergence. 59

Clausal 9 and 57 of the law. In clausal 14, the service telecommunication encompasses: the basic telephone (e.g. local and inter-local or international wired telephone, telegraph, facsimile); value-added service (e.g. intelligent network, voice responses, or calling card); and multimedia (e.g. content provider, VoIP, internet, or streaming) 60

In the Government Regulation No.52/2000, Clausal 53 61

in the Chapter IV of the telecommunication law, Clausal 84 the MD of Kominfo No. 01/2010, and the MD of Kominfo No. 08/2006 62

From the “layered model” emerges a new regulatory approach in the study of convergence, which involves the shifting from a silo based approach to horizontal layers on the network platform (Werbach, 2005). Furthermore, “layered models are becoming a common tool for analysing questions in telecommunication policy, internet regulation and cyber law” (p.69)

41

CHAPTER V

CONCLUSION

This study has shed light on broadcasting and telecommunication governance

towards convergence in Indonesia, and highlighted the absence of appropriate

regulations and the tensions between existing regulatory bodies. There are three

regulators: executive (President and the Kominfo (Ministry of Information and

Communication Technology)), legislative (the DPR) and judicial actors (the

Supreme and Constitutional courts). There are two independent regulatory bodies

responsible for convergence issues: the KPI (Indonesian Broadcasting Commission)

and the BRTI (the Indonesian telecommunication regulatory body) which have a

unique position among these three institutions.

The upcoming revisions of 2002 Broadcasting Law and the 1996

Telecommunication Law are likely opportunities for Indonesian regulators to address

the convergence since the absence of agreement between the Kominfo and the DPR

to adopt a single convergent law. The KPI and the Kominfo have submitted their

revision proposal to the legislative body of the DPR on the 2002 Broadcasting Law.

The dissent between these two proposals lies on KPI’s role in broadcasting policy

making process. KPI, which supported by the DPR, likely to retreat from its role in

policy-making process to that of an independent regulator authorised to issue

broadcasting licenses, regulate the industry and supervise broadcast content. In

contrast, Kominfo seeks to diminish the role of KPI to that of a ‘broadcasting content

supervisor commission’ which merely supervises the broadcasting content.

Furthermore, the two proposals have a different focus that will impact convergence

in different ways. Kominfo’s proposal focuses on the legalisation of multiplexing

system for free-to-air (FTA) TV’s analogue to digital migration, whereas KPI

focuses on the revision of broadcasting definition which enables the adaptation of

new technology, including the changing of broadcasting in digital era. The “digital

switchover” for FTA TV is targeted for 2018, but is challenged with the inadequacy

of broadcasting law to legalise the existence of multiplexing operators and content

providers in the digital broadcasting system. Addressing this will be critical, as the

migration will create a “digital dividend” of licensable spectrum which allow the

adaptation of LTE/4G technology for telecommunications.

42

The biggest challenge for the government in the revision of 1996

Telecommunication Law, which the Kominfo is still drafting the bill, is to transform

the traditional broadcasting and telecommunication industries to digital ones, by

facilitating interconnection along the value chain of the telecommunication industry

to enable digital infrastructures and networks as foundation of the convergence

ecosystem. By the recent regulations such as the ministerial decree No.01/2010 and

No. 08/2006, the government establishes regulated prices, terms and conditions for

interconnection among network providers, but not the physical layer’s unbundled

network. However, broadband development has been listed as a priority project in

the government’s 2005-2025 long-term national development plans. This includes

the 2014-2019 ‘Indonesian Broadband Plan’ which costs around USD 21.6 billion.

A critical factor in the sustainable achievement of these initiatives will be the

interrelation between regulators. The emerging interrelations, particularly between

Kominfo; DPR; KPI; and BRTI, emerges from the nature of both the Broadcasting

and Telecommunication Laws itself. The Telecommunication Law, which initiated

by Kominfo, amended the establishment of BRTI and the interrelation between them

is in the form of a “partnership”. However, the KPI whose role is established by the

Broadcasting Law (initiated by the DPR) tends to act as opposition towards

Kominfo. Nevertheless, both KPI and BRTI rely on Kominfo’s budget, so the

independence of these bodies is far from absolute. As the interviewees in this study

have described, it will be a political balancing act to reduce the natural conflict

between these regulatory entities toward Indonesia’s convergent media future.

43

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http://web.kominfo.go.id/sites/default/files/users/1536/Dokumen%20Penyemp

urnaan%20Regulasi%20Tarif%20dan%20Interkoneksi%20-

%20Konsultasi%20Publik.pdf [date accessed 30 January 2015]

Komisi I DPR (2015) ‘Laporan Singkat’ http://www.dpr.go.id/dokakd/dokumen/K1-

Lapsing-Rapat-kerja-Komisi-I-DPR-RI-dengan-Menkominfo-RI-

1423014508.pdf [date accessed 11 March 2015]

Majalah ICT (2014) ‘Pembangunan Broadband Nasional Butuh Rp. 278 Triliun’.

http://majalahict.com/berita-5805-pembangunan-broadband-nasional-butuh-rp-

278-triliun.html [date accessed on 5 March 2015]

Nielsen (2014) ‘Nielsen: konsumsi media lebih tinggi di luar Jawa’

http://www.nielsen.com/id/en/press-room/2014/nielsen-konsumsi-media-lebih-

tinggi-di-luar-jawa.html [date accessed 4 February 2015]

OREI (2015) ‘why is it important?’ http://orei.unimelb.edu.au/content/why-it-

important [date accessed 28 April 2015]

Riska, M (2014) ‘Penyedia Multipleksing Siap Sewakan Kanal’.

http://industri.kontan.co.id/news/penyedia-multipleksing-siap-sewakan-kanal

[date accessed 6 February 2015]

Rohman, I.K (2014) ‘Review of Indonesian Broadband Development’

http://broadbandasia.info/wp-content/uploads/2014/04/Indonesian-National-

Broadband-Initiative.pdf [date accessed 2 February 2015]

Siaran Pers Kominfo (2013) ‘Kebijakan Kementerian Kominfo Terhadap Keputusan

Mahkamah Agung Mengenai Penyelenggaraan Penyiaran Televisi Digital’

http://sdppi.kominfo.go.id/?mod=news&action=view&cid=26&page_id=2084

&lang=en [date accessed 11 March 2015]

SWA (2014) ‘Telkomsel Andalkan T-Cash dan T-Izy’ http://swa.co.id/business-

strategy/telkomsel-andalkan-t-cash-dan-t-izy [date accessed 9 April 2014]

Telkom (2015) 'PT Telekomunikasi Indonesia, Tbk: Investor Summit & Capital

Market Expo’

48

http://www.telkom.co.id/assets/uploads/2013/05/TLKM_9M13_InvestorSumm

it2013.pdf [date accessed 30 January 2015]

The Jakarta Post (2014) ‘Twitter to open Indonesia office in Jakarta’

http://www.thejakartapost.com/news/2014/08/29/twitter-open-indonesia-office-

jakarta.html [date accessed 7 April 2015]

Wall Street Journal (2014) ‘Facebook Users in Indonesia Rise to 69 Million’

http://blogs.wsj.com/digits/2014/06/27/facebook-users-in-indonesia-rise-to-69-

million/ [date accessed 6 April 2015]

WSIS (2003) ‘Declaration of Principles: Building the Information Society: a Global

Challenge in the new Millennium’

http://www.itu.int/wsis/docs/geneva/official/dop.html [date accessed 6 April

2015]

Government official documents

The 2002 Broadcasting Law

The 1996 Telecommunication Law

The Constitutional Court Decision Document No 031/PUU-IV/2006

The Ministerial Decree of Kominfo No. 08/Per/M.KOMINF/02/2006. “The

Interconnection” (Interkoneksi)

The Ministerial Decree of Kominfo No.7/2009, the structure of radio spectrum band

for wireless broadband” (penataan pita frekuensi radio untuk keperluan layanan

pita lebar nirkabel)

The Ministerial Decree of Kominfo No. 43/PER/KOMIMFO/10/2009, the

networking TV system adaptation for private free-to-air TV stations

(Penyelenggaraan Penyiaran Melalui Sistem Stasiun Jaringan Oleh Lembaga

Penyiaran Swasta Jasa Penyiaran Televisi)

The Ministerial Decree of Kominfo No. 01/PER/M.KOMINFO/01/2010, the

Telecommunication Network (Penyelenggaraan Jaringan Telekomunikasi)

The Ministerial Decree of Kominfo MD No.23/PER/M.KOMINFO/11/2011, the

master plan of the allocation of 478-694 MHz spectrum radio for Digital

Terrestrial Transmitted Broadcast (Rencana Induk Frekuensi Radio untuk

Keperluan Televisi Siaran Digital Terestrial Pada Pita Frekuensi Radio 478 –

694 MHz)

The Ministerial Decree of Kominfo No.22/ PER/M.KOMINFO/11/2011, the

implementation of free-to-air Digital Terrestrial Transmitted Broadcast system

(Penyelenggaraan Penyiaran Televisi Digital Terrestrial Penerimaan Tetap

tidak Berbayar)

The Ministerial Decree of Kominfo No. 05/2012

49

The Ministerial Decree of Kominfo No.18/2012, the formula of leasing tariff for

multiplexing system broadcasting (Tata Cara Perhitungan Tarif Sewa Saluran

Siaran Pada Penyelenggaraan Penyiaraan Multipleksing)

The Ministerial Decree of Kominfo No.28/2013, the license procedures and terms

and conditions of Digital Terrestrial Transmitted Broadcast (Tata cara dan

persyaratan perizinan penyelenggaraan penyiaran jasa penyiaran televisi secara

digital melalui system terestrial)

The Ministerial Decree of Kominfo No. 32/2013, the implementation of digital

broadcasting television and the multiplexing system through terrestrial system

(penyelenggaraan penyiaran televisi secara digital dan penyiaran multipleksing

melalui sistem terestrial)

The Ministerial Decree of Kominfo No.15/2014, the amendment of the ministerial

decree No. 11/PER/M.KOMINFO/07/2010, the implementation of Internet

Protocol Television (penyelenggaraan layanan televisi protokol internet)

The Kominfo’s broadcasting bill draft document “Rancangan Undang-Undang

Tentnag Penyiaran Usulan Pemerintah” [obtained during the interview section]

The KPI’s broadcasting bill draft “Rancangan Undang-Undang tentang Perubahan

atas UU No.32 Tahun 2002 tentang Penyiaran” [obtained during the interview

section]

The Supreme Court Decision Document No: 005/PUU-I/2003 which published on

Berita Negara Republik Indonesia No.63/2004, Friday 06 August 2004.

50

Appendix 1.

The interview questions

Interview Question (Semi -structured format)

A. Ministry of Communication and Informatics

Directorate General of Communication and Public Information/ KIP or

Directorate General of Informatics Application/ Aptika

1. How and in what way the media industry expected to be changed for the next

five years (the business model and market)? What is the biggest challenge that

the government would face in that changing?

2. What is the main focus of change in the ongoing revision of 2002 Broadcasting

Law?

3. What and How the government’s role to be expected changing in the revision

of 2002 Broadcasting Law?

4. How and in what way the existing internal collaboration (individualized self-

regulation scheme) in the ministry to formulise media policies (e.g code of

conduct, guidelines)?

5. Is there any different formulation in the policy making process of media

traditional and new media regulation? Will there be different in regulating

media in convergence era?

6. How KPI and Min. of Communication and Informatics suppose-to elaborate to

mitigate the overlapping role and function in regulating media?

Directorate General of Post and Informatics Resources and Devices/ SDPPI

(http://www.postel.go.id/) or Directorate General of Post and Informatics

Empowerment (PPI)

1. How and in what way the telecommunication industry expected to be changed

in the convergence environment (the business model and market)? What is the

biggest challenge that the government would face in that changing?

2. What have the government’s done and will do to provide supportive

infrastructure for this convergence environment?

3. What was the main purpose of the Convergence Telematics Bill?

4. What is the primary obstacle so that the bill has not been passed yet in

legislative regardless the political situation?

51

5. What is the government’s expectation from this bill in terms of authority and

role?

6. How and in what way the existing internal collaboration (individualized self-

regulation scheme) in the ministry to formulise telecommunication policies?

7. How and in what way the existing collaboration between government,

independent regulatory body (IRB) and industry in regulating

telecommunication? Will it be expected to be changed in the convergence

media environment?

8. How this bill would elaborate or accommodate the existing bill such as

Broadcasting and telecommunication Law (Press, Broadcasting, and Internet

domains)?

9. In what way this bill would support any blue print of broadband development

in Indonesia?

10. If the legislative passed the bill, what the central government’s strategy to

implement it to local government?

B. Indonesia Broadcasting Commission/ KPI (an independent regulatory body for

broadcasting)

Chairman of KPI

1. How and in what way the media industry expected to be changed for the next

five years? What is the biggest challenge that KPI would face in that

changing?

2. How and in what way KPI regulate media recently especially based on 2002

Broadcasting Law?

3. As independent regulatory, what is KPI’s expectation from the revision of 2002

Broadcasting Law?

4. How this revision would change the existing media regulation and address the

essential issues such as mitigate media conglomeration and create diverse

content and voice?

5. How and in what way the existing internal collaboration (individualized self-

regulation scheme) in KPI to formulise media policies (e.g code of conduct,

guidelines) that support existing law?

6. How and in what way the existing collaboration between government, KPI and

industry in regulating media? Will it be expected to be changed in the

convergence media environment?

7. How KPI and Min. of Communication and Informatics suppose-to elaborate to

address the issue of overlapping role and function in regulating media?

52

D. Indonesia Telecommunication Regulatory Body/ BRTI (an independent

regulatory body for telecommunication industry)

Committee of telecommunication regulation

1. How and in what way the telecommunication regulation expected to be

changed in the convergence environment?

2. How and in what way the telecommunication industry expected to be changed

in the convergence environment?

3. What is the biggest challenge that BRTI would face in convergence

environment?

4. How and in what way the existing internal collaboration (individualized self-

regulation scheme) in BRTI to formulise telecommunication policies (e.g code

of conduct, guidelines) that support existing law?

5. How and in what way the existing collaboration between government,

independent regulatory body (IRB) and industry in regulating

telecommunication? Will it be expected to be changed in the convergence

media environment?

6. As independent regulatory, what is BRTI’s expectation from the Convergence

Telematics Bill?

E. Commission 1 House of Representative

Deputy Chairman of Bill, Secretariat General of House of Representative

1. Is the Convergence Telematics Bill as an effort to fill the gap or accommodate

the regulation which does not regulated both in telecommunication and

broadcasting law?

2. What is the primary issue so that the bill has not been passed since 2010?

3. What was the main purpose of revision of 2002 Broadcasting Law? Based on

hearing meetings and public consultation, what was the main issue that should

be addressed in the revision?

4. What was the main purpose of Convergence Telematics Bill? Based on hearing

meetings and public consultation, what was the main issue that should be

addressed in this bill?

5. As legislative, what is your expectation in the revision of 2002 broadcasting

law and the convergence telematics bill?

53

Appendix 2.

PLAIN LANGUAGE STATEMENT

“Media Policy and Governance in Indonesia towards

Convergent Media”

Researcher : Vience Mutiara Rumata

Email : vrumata@student.unimelb.edu.au

Supervisor : Daniel James Butt

Email : danny.butt@unimelb.edu.au

Dear Participant

You are invited to participate in the above research project, which is being conducted

by Vience Mutiara Rumata (researcher) and Daniel James Butt (supervisor) of the

Department of Culture and Communication at the University of Melbourne. Your

name and contact details have been drawn at random from a database of former

applicants for ethics approval, with the permission of the General manager of the

Melbourne Research Office. This project will form part of Ms. Rumata honours

thesis, and has been approved by the Human Research Ethics Committee.

The aim of this study is to shed light on transformations in Indonesian Media and

Telecommunication policies and regulations. I will be carrying out semi structured

interviews and observations with selected participants who have adequate experience

in media and telecommunication sector in Indonesia. I will interview you

individually and observe you in natural setting. Your honest responses are extremely

important in giving valid to this study. With your permission, I may audiotape your

responses and/or observe you in a media setting at work or in a public place.

Responses from interviews and observations will be analysed and written up in the

form of a research report for submission at the end of the first semester next year

(2015). Data will be destroyed after kept safely at the University of Melbourne for

five years. This project involves a small sample of participants (six to eight

interviewees), this may have implications with regard to the protection of your

identity. I must inform you that your name and working title are disclosed in the

research paper, unless without your permission. As soon as the research report is

returned to me after being examined, a copy of it will be made available to you upon

request.

Please be advised that your participation in this study is completely voluntary.

Should you wish to withdraw at any stage, or to withdraw any unprocessed data you

have supplied, you are free to do so without prejudice. The researchers are not

involved in the ethics application process. Your decision to participate or not, or to

54

withdraw, will be completely independent of your dealings with the ethics

committee, and we would like to assure you that it will have no effect on any

applications for approval that you may submit.

If you would like to participate, please indicate that you have read and understood

this information by signing the accompanying consent form and returning it in the

envelope provided. The researchers will then contact you to arrange a mutually

convenient time for you to view the web site and to complete the questionnaire and

interview

This research project is being carried out with approval from the University’s Office

for Research Ethics and Integrity (OREI), if you have any concerns and would like to

as further questions, you may contact my supervisor (as above) and/or the Office for

Research Ethics and Integrity (OREI) as below:

Director, OREI, level 1, 780 Elizabeth Street, The University of Melbourne, VIC

3010

Phone: (+61) 3 8344 2047; Fax: (+61) 3 9347 6739; email: research-

integrity@unimelb.edu.au

If you would like to participate in this research, please indicate that you have read

and understood this information by signing the accompanying consent form. Thank

you

Yours sincerely,

55

Appendix 3.

DEPARTMENT of CULTURE AND COMMUNICATION

Master Program Global Media Communication

Consent form for persons participating in a research project for Thesis purpose

“Media Policy and Governance in Indonesia towards Convergent Media”

Name of participant:

Name of investigator(s): Vience Mutiara Rumata

1. I consent to participate in this project, the details of which have been explained to me, and I have been provided with a written plain language statement to keep.

2. I understand that after I sign and return this consent form it will be retained by the researcher.

3. I understand that my participation will involve an interview and observation and I agree that the researcher may use the results as described in the plain language statement.

4. I acknowledge that: (a) the possible effects of participating in the interview and observation have been explained to my satisfaction; (b) I have been informed that I am free to withdraw from the project at any time without explanation or prejudice and to withdraw any unprocessed data I have provided; (c) the project is for the purpose of research; (d) I acknowledged that there are legal limitations to data confidentiality; (e) I have been informed that with my consent the interview will be audio-taped and I understand that audio-tapes will be stored at University of Melbourne and will be destroyed after five years; (f) I have been informed that a copy of the research findings will be forwarded to me, should I agree to this.

I consent to this interview being audio-taped □ yes □ no

(please tick)

I wish to receive a copy of the summary project report on research findings □ yes □ no

(please tick) Participant signature: Date: