10. Opening ICT Public Access and Dealing with the Cyber "Pandora Box": A Survey of Internet Kiosks in Five Major Cities in Indonesia

Idris F. Sulaiman* and Donny B. Utoyo**

A survey, followed by discussions with a focus group and analysis of secondary statistical material provide useful information about the development of Indonesia’s Internet kiosks (known locally as “warnets” in four Indonesian regional cities: Yogyakarta, Semarang, Banding and Medan, and in the capital, Jakarta. The paper is divided in three parts: first, an overview of Indonesia's ICT status; second, the characteristics of Internet kiosks surveyed in terms of their legal (or the lack of) status of ownership, software, hardware and connectivity infrastructure, location and other operational variable to the extent they monitor cyber vices; third, an analysis of the potential, despite regulatory impediments, of warnets; and fourth a discussion of cyber-crime activities 
Notwithstanding the regulatory impediments, warnets have considerable potential and should try to diversify among themselves to evolve into one of  the many proto-type multi-functional community tele-centers (MCTC). There are alternatives the trend to develop into game centers or access points for carrying out cyber-crime (hacking and others) and cyber fraud (credit card fraud and forms of fraud which use the Internet) and other socially undesirable activities. Warnets could consider transforming themselves to proto-types MCTCs such as business centers for small and medium enterprises (SMEs), English-language and other e-learning training centers or to providers of other information service centers. Such a trend would enable warnets to act as accelerators for Indonesia's economic revival and as links to the Global Information Society, particularly in secondary towns, rural and remote regions.
Finally, the paper discusses some cyber-crime activities occurring in Warnets and measures that could be promoted in Indonesia to minimize the adverse aspects of Warnets. Cyber-security considerations should be built into ICT public access at the outset of its development. If such measures are not taken, there will be an increasing risk that the Warnet phenomenon will become a cyber "Pandora’s Box" in the sense that it will be used for many of the dark sides of the Internet, notwithstanding the initial expectations of delivery of the many benefits of the Information Society. 

Keywords: information communications technology (ICT), public ICT access, Internet statistics, Internet Kiosks, telecaster, cyber-security, credit card fraud, cyber-crime 

*.International Cooperation Advisor, Indonesia Information Technology Federation, Cyber-Elektrindo Building, JI. Kuningan BaratNo. 8, Jakarta 12710, Indonesia (idriss@indo.net.id) 
**. Coordinator of Information and Communication Technology (ICT) Watch, Wisma ICT, Jl. Damai II / 61, Pondok Gede - 17411, Indonesia (www.ictwatch.com). Coordinator of e-Business Specific Discipline of Manajemen Department, Economics Faculty of Bina Nusantara University (www.binus.ac.id). Contact : donnybu@ictwatch.com

We thank the Partnership of Economic Growth (Government of Indonesia-USAID) Project for the financial support to conduct this first round qualitative survey. The views expressed in this paper are those of the authors and not necessarily those of US Agency for International Development, the United States Government or the Government of Indonesia 
INTRODUCTION

The majority of Indonesian homes cannot afford to have personal or individual access to the Internet and some Information Communications Technologies (ICTs). More than 90 percent of homes do not have access to fixed or mobile phones. The majority of Indonesians in the major urban areas can now access the Internet through the public access points such as Internet Kiosks/Cafes (known also as "Warung Internet" or "Warnet") that provided 50% of Internet access in 2000. By 2003, this percentage had risen to 64% according to AC Nielsen's research. Hence, most of Internet use is through public ICT access but this increasing access does not come without its dangers. 
There has been an upsurge in the demand for accessing the cyberspace from Internet kiosks or cafes in Indonesia. In the year 2000, Warnets were used by 25% of the total users but by 2003, an estimated 34% of the use was through warnets. This increase has been attributed to the decline of direct access from households from 13% in 2000 to only 6% of the total Internet users in 2003 with a corresponding decline in Internet access from offices from 42% in 2000 to 38% in 2003. 

Such a major change in the mode of Internet use has two major implications. First: on the positive side, with the increase of the number of Warnet users, Warnet entrepreneurs are earning greater disposable income and re-investing some of their earnings to improve their services. If such a trend continues and there is continuing relative economic stability, more investors will sink their capital into the Warnet business. As such, this can lead to further improvements in services; a lowering of access costs and healthier competition between Warnets, particularly if there is no significant rises in various government levies. This could mean even greater numbers of Internet users accessing from Warnets. 

Secondly, on the negative side, the rapid expansion of Wamets in Indonesia has some dire implications which must be taken seriously as they can threaten and undermine not only e-commerce but also security at large not just in Indonesia but also in the rest of the world. One implication of Wamets use increase is that, in some cases, unscrupulous entrepreneurs who only treat Wamets as pure profit centers and do not heed the prevailing ethical standards, appear to allow cyberfraud, cybercrime and other unlawful exchange of information and other activities to take place on their premises. Another type of activity that can be observed is that, if such behavior is allowed to continue, there is little doubt that some Warnets will also be used as centers of terrorist information exchange which will then pose an ever more serious threat to the rest of society. 

1.1 INDONESIA ICT STATUS 

In Indonesia, ISPs play a pivotal role in the diffusion of the Internet and in raising the public awareness of the potential of ICTs particularly in the regional cities and town. As at January 2003, according to the ISP Association (APJII) the estimated number of Internet users reached 4.5 million (or 2.1% of the total population assuming a population of 215 million) and registered ISP subscribers of 583,861 (less than 1% of total population, 81 24/I/2003). Of the total number of subscribers, 544,272 (93%) are domestic subscribers while the remaining 39,583 (or 7%) are from the corporate sector. 

At the end of 2003, the estimated number of Internet ISP subscribers and users in Indonesia stands at 866,000 and 8.08 million respectively according to the ISP Association (Bisnis Indonesia daily, 3/2/04). The estimated total number of users was higher than expected (7.4 million) for the period. In 2004, it is expected that the total number of subscribers and users will be 1.3 million and 12 million respectively. 

Of the total number of subscribers, 91% are domestic and other subscribers while the remaining 9% are from the corporate sector. While the growth of total fixed telephone lines owned by both categories reached 7.807 lines (see Table 1), the growth will come mainly from use of the new fixed wireless CDMA technology rather than from PSTN telephones. Nevertheless, it is rather curious that the data from the telecommunications incumbent, PT Telkom, shows that the projected growth will decline after 2003. 

Table 1 Total fixed lines owned (Millions of lines) 2002-2005

Type of line	2002	2003*	2004*	2005*	
Existing fixed line telephones (PSTN)	7.514	7.514	7.514	7.514	
CDMA
%growth	0.293	1.063
263%	1.610
51%	1.886
17%	
PSTN
% growth		0.368	0.669
82%	1.063
59%	
Total
% growth	7.807	8.945
15%	9.793
9%	10.463
7%	

Note: CDMA -Code Division Multiplier Access for the new fixed wireless phones; PSTN -Public Switched Telephone Network; Source: Data from PT Telkom. 

The growth of CDMA fixed-wireless subscribers will be greater than fixed wire-line PSTN connections primarily due to the large-scale introduction of CDMA technology in 2003. The sole incumbent CDMA operator, PT Komselindo (also a PT Telkom subsidiary) only had a relatively small subscriber base in 2003. 

Table 2  Estimated Indonesian subscribers to, and users of, the Internet 1998-2004

Year	Subscribers	% increase on previous year	Users	% increase on previous year	
1998	134000		512000		
1999	256000	91	1000000	95	
2000	400000	56	1900000	90	
2001	581000	45	4200000	121	
2002	662007	13	4500000	7	
2003	865706	22	8080534	68	
2004*	1300000	50	12000000	50	

Note: *As estimated by Indonesian ISP Association (APJII), February 2004 see Table 10 below. 

The growth of Internet subscribers and users is driven largely by the availability of accessible content. The growth of such content in a particular country is not easy to measure. The volume of content and quality of different websites varies widely. Often websites do not register using the country’s domain name or do not follow naming conventions. For example, many universities do not use “ac.id” names, or government agencies do not use "go.id" names. Some websites have many pages with useful information and others have merely one or two. Notwithstanding the measurement difficulties, the growth of the registration of different domain names types provides an indication of the expansion of types of ICT content and hence their impact on different segments of society. 

In 2002, statistics collected by the Indonesia Network Information Center (IDNIC) showed a 26% increase in the number of ".id" domain names to a total of 15,588 names. However, the growth rate was lower than the 39% increase in 2001. The number of registrations recorded in 2002 was also lower than that in year 2000 which peaked at 4,229 names (see Table 7 below). Nevertheless, the growth in 2002 reflected the highest numbers of new registrations of ".or.id" (for organizations), then "ac.id" (companies) tie with "web.id" (general websites) and ".go.id" (for government agencies) new domain names. 

The explosive growth (213%) in government registrations from 74 in 2001 to 232 in 2002 reflected the greater income available to regional governments (regency and provincial websites which can be accessed from www.indonesia.go.id) since the passing of the Regional Autonomy Bill in January 2001. Through the Ministry of Communications and Information, the Government conducted a nationwide public awareness campaign to promote "E-Government" in the outer island regions. Despite some improvement in the general economic situation in Indonesia since 2001, the number of newly registered websites appears to have declined since 2000. 

Table 3  Statistics for Various Types of Domain Names Registration in Indonesia

Domain 
	2001 
	2002	% increase on previous year	Website
Growth:

Year	Number of newly registered “.id” names	% increase on previous year	
co.id	7508	9183	22	1995	87	275	
or.id	2035	2796	37	1996	240	299	
web.id	1520	1945	28	1997	718	206	
sch.id	599	647	8	1998	1480	145	
ac.id	383	489	28	1999	2150	197	
go.id	74	232	213	2000	4229	-82	
net.id	169	184	9	2001	3488	-91	
war.net.id	78	102	31	2002	3196		
mil.id	6	8	33				
.id	12392	15588	26	Total sites	in 2002	15588	

Source: IDNIC, Business Indonesia 7/1/2003. 

Improvements in quality of access suggest that there will have been a higher rate of increase during 2003. The measured Internet traffic, as indicated by Multi Router Traffic Graph (MRTG) reports, is growing rapidly. In the first quarter of 2003, some peak traffic reached the capacity of 260 Mbps, which is higher than the average for 2002 (see Table 10). This is due to more companies who previously used dial-up facilities signing up for leased lines with 128 Kbps or higher. According to APJII sources, the demand for Internet services from the corporate sector was increasing in 2003. 

Table 4   Residential and Corporation Subscribers, 2000-2003 

Subscribers	2000	2001	2002	2003*	
Corporate	18000	29050	39934	100000	
% increase on previous year		61	37	150	
Residential and others	382000	551950	622073	700000	
% increase on previous year		44	13	13	
Total	400000	581000	662007	800000	
Note: * Estimates by ISP Association (see below), February 2003

The growth in the number of users accessing the Internet from such points as homes, Internet kiosks, universities and offices can be estimated by multiplying the assumed average number of users for each category with the number of subscribers in that category (Table 5). The multiplications, based on the distribution of users from each category, showed that from 800,000 subscribers, there would have been approximately 7,550,000 users in 2003. Hence, the estimated number of Internet users in 2003 appears is significantly higher than the 4.5 million in 2002 and the 4.2 million in 2001 (Table 6). 

Table 5   Estimation of Residential, Internet Kiosk (Warnet), School, large, medium and small Enterprise and Other Users, 2000-2003 

Type of user	Estimated subscribers 2003	Assumed number of users for each PC	Estimated users in 2003	
Residential	700000	4	2800000	
Warnet	400000	100	4000000	
School	600000	100	6000000	
Large enterprises	10000	100	1000000	
Medium enterprises	25000	50	1250000	
Small enterprises	50000	20	1000000	
Government agencies and NGOs	10000	100	1000000	
Total	800000		8000000	
Source: ISP Association (APJII), Jan 2003

1.2.0 INDONESIA W ARNET SURVEY OVERVIEW 

The Internet Kiosk or Warnet industry in Indonesia experienced a series of fluctuations in numbers and activity levels from their beginnings in 1997 and through the economic crisis. Few warnets were established in 1997-98, but their numbers surged in late 1999 and early 2000. From late 2001 until early 2003 the warnets faced greater uncertainties and harsher conditions, but later in 2003 most warnets experienced a turnaround.  The survey found that most Wamets in all areas surveyed faced similar issues. In each of the five major cities, 10 randomly picked Warnets were selected and their operators interviewed on 4 key set of issues: 

(1) Legal status and business regulatory issues: 
1.1 Legal business status 
1.2 Existing local government regulations 
1.3 Existing national government regulation 
1.4 Existing official payments and unofficial levies 
1.5 Previous experience of search of premises or arrest by law enforcement 

(2) Business model, nature of operation and other value added activities on the premises: 
2.1 Operating hours 
2.2 Employee net salary level 
2.3 Date of establishment 
2.4 Average number of users 
2.5 Initial capital 
2.6 Categories of typical users 
2.7 Existing assets 
2.8 Other side/value-added businesses 
2.9 Number of employees 
2.10 Existing and optimum level of tariff for users 
2.11 Highest attained level of education 
2.12 Net earnings of employees/operators 
2.13 Type of computer servers 
2.14 Routine expenses 
2.15 Type of computer client software 
2.16 Employee net salary level 

(3) Physical and network security issues: 
3.1 Physical security of premises and equipment 
3.2 Additional protection with enforced computer casing 
3.3 Types of computer and cybercrime activities ( credit card fraud, hacking, cracking and others) 
3.4 Pornographic access 
3.5 Facility for users to use their own software 
3.6 Availability of firewall software 
3.7 Requirement for users to show identity cards 
3.8 Keeping of activity log books 

(4) Software, hardware and licensing issues: 
4.1 Type of technology to obtain bandwidth (wireless, Internet cable and others) 
4.2 ISP service levels 
4.3 Operating system of servers 
4.4 Operating system of client computers 
4.5 Types of applications software 
4.6 Use of licensed software 

Key Features of the Internet Kiosks Survey 

* A Preliminary survey was conducted in July-August, 2003 
* Qualitative approach is used (structured questionnaire and Focus Group discussion) 
* Field research locations as indicated above in 5 cities: Banding, Jakarta suburban and 
Makassar, Medan, Bandung, Yogyakarta and Jakarta 
* Respondents: Administrators and/or owners of the Internet Kiosk 

The Survey covers 34 data fields across a sample of 50 respondents -10 Wamets in each city selected based on their "representativeness" derived from a consensus of the Wamet Focus Groups (WFG, see below) in 5 cities. The choice of cities in this first round qualitative survey namely the five major cities in Indonesia (Jogja or Yogyakarta, Medan, Makassar, Bandung and Jakarta suburban) emerged from after a discussion at the WFG. Based on the prior research conducted by ICT Watch, the five cities were selected because these are cities have the largest number of Wamet users and Wamets.

Fig. 1 Map of Indonesia showing the major cities

The Wamet Focus groups that were formed to obtain greater depth on the responses are made up of several well-known Wamet entrepreneurs and industry local organization activists1.  Given time and budget restrictions, our study covered only 50 out of an approximately of 1000-2500 Warnets in Indonesia.  The precise total number of Warnets is not easy to determine, as many have not registered themselves with the local branches of the Internet Kiosk Association (AWARI) or the Cooperative Association of Internet and ICT Kiosks (APKOMINTEL). While the Internet subscriber and user statistics (Tables 2 and 5) suggest an overall increase in ICT use in Indonesia, much of that increase appears to be from increased Internet traffic in the corporate sector.

Although warnet Internet traffic has grown, its proportion of the total traffic has declined, according to Mr. Heru Nugroho of the ISP Association (APJII) from 42% in 2001 to a mere 3% in 2003 (Bisnis Indonesia, 3/2/2004). This marginalization of the warnet business is largely due to the steep rise in costs of connectivity (dial-up phone, cable or DSL connection charges) since 2001.

1We are grateful to Mr. Stephanus Edi Pambudi (former chairman of the Yogyakarta Wamet Association, AWAYO and a long- time Wamet owner), Mr. Hadi Sutikno (Warnet owner and Warnet network developer), Mr. Sie Ket Liong (Information Technology staff of the Japan International Cooperation Agency, Medan), Mr. Berlin Bulo (Warnet observer, Makassar), Mr. Adi Nugroho (Chairman, ISP Association of Makassar), Mr. Irwin Day (Linux activist and Wamet owner, Makassar) and Mr. Mappasoro Mahmud (Warnet owner since April 1999, Makassar), Mr. Irsan Bakhtiar (Warnet owner, Bandung) and Mr. Imam Badaruddin (Wamet manager since 1998). We appreciate their generosity in sharing their comprehensive knowledge of the Warnet industry. All errors and omissions are ours.

1.2.1 INDONESIA WARNET SURVEY – FINDINGS

The key findings of the survey cover such operational aspects of the Internet kiosks as their legal business entity status, investment size and range of costs of computers used, type of computer and software used, average number of computers, type of internet access, average number of users and the extent of the warnets’ surveillance of cybercrime activities.

Table 6  Legal entity of the Indonesian Internet Kiosk’s and attitudes towards local government policies for warnets

City	Legal status of warnet(1)
Yes	Legal status of warnet(1)
None	Local government policy (2) on warnet response
        Yes                          	Local government policy (2) on warnet response
None                    	
Makassar	4	6	7	3	
Medan	3	7	6	4	
Bandung	5	5	4	6	
Yogyakarta	2	8	4	6	
Jakarta suburban	5	5	5	5	
Notes: 	(1) The question that was posed was whether the Internet Kiosks/Warnets have any legal status, which can be either a limited partnership ("CY" status) or incorporated limited liability (Inc/Ltd) 
(2) The local government policy on Internet Kiosks in some cases involves general business licensing or in some cases specific license for the Internet Kiosks 

On the legal status of Internet Kiosks, at most locations in all the five cities, the majority of warnets do not have any legal status. While the figures from Bandung and Jakarta suggest that those with and without legal status in the sample are evenly matched, the anecdotal evidence suggests that only a minority of the warnets in all cities have a legal status. One consequence of the lack of legal status of most Internet kiosks are the associated difficulties for their owners in obtaining bank loans and the difficulty in monitoring and enforcing certain public policies. 

From our questionnaire, the Internet Kiosk owners have few objections to a greater level of governmental regulation as long as it does not lead to a system with complicated procedures that would create ample room for corruption. There is also a widespread concern over the increasing incidence of local government officials trying to impose illegal or unofficial levies. 

Table 7: Size of Investments and Rental Fees 

City	Investment (US$1 =Rp 8-8,500) 	Rental Fee * (standard per hour) 	
Makassar	>= Rp 80 million (4) 	Rp 3500- Rp 4000 	
Medan	>= Rp 80 million (9)	Rp 2500 -Rp 4500 	
Bandung	>= Rp 80 million (7)	Rp 3000 -Rp 4500 	
Yogyakarta	>= Rp 80 million (6)	Rp 3000 -Rp 3800 	
Jakarta suburban	>= Rp 80 million (5) 
	Rp 4000 -Rp 6000 

Most warnet operators believe it costs an average of $10,000 to establish an Internet café. Medan appears to have the highest investment costs but the lowest rental fees. A single warnet may offer 2 or 3 alternative rental fees depending on the time of day of use. The lowest fee is usually after midnight, in the early hours of the morning when charges can be as low as Rp 1500 per hour.  Many respondents said that current fees gave them low returns and that fees should be up to Rp 2000 higher, as they were in 2001. Fees fell after then due to price-cutting competition.

Table 8 Number of computers in warnets and net income

City	Units with 5-10 computers	Units with 
11-20 computers	Units with more than 20 computers                          	Average net monthly income
(Million Rp)	
Makassar	5	5	0	2-4	
Medan	0	3	7	5-10	
Bandung	0	8	2	2-6	
Yogyakarta	4	4	2	2-4	
Jakarta suburban	8	0	2	0.5-2 (housing area)
5-10 (campus area)	

Medan has larger warnets than other locations, reflecting the larger investments in warnets in that city.  Most of the other cities tend to have small to medium sized warnets. The higher average incomes in Medan and suburban Jakarta reflect the larger sized warnets in those locations.

Table 9: Type of Operating Systems Used and Internet Access 

City	Windows operating system (server)	Linux operating system (server)	Internet access	
Makassar	1	9	Wireless/ 16-64 Kbps	
Medan	8	2	Wireless/ 16-64 Kbps	
Bandung	0	10	Wireless/ 32-64 Kbps	
Yogyakarta	1	9	Wireless/ 32-64 Kbps 	
Jakarta suburban	8	2	Dial up (housing area)
ADSL 512 (campus area)	

The types of operating system used by warnets show an interesting contrast, with Yogyakarta, Makassar, Bandung and Medan preferring Linux and Medan and suburban Jakarta generally using windows.  Most use terrestrial wireless for connections, except for suburban Jakarta which uses slower dial-up facilities.

The third column of 10 shows the main categories of users of the surveyed Warnets and the preventive measures (or lack of them) against cybercrime and pornography related activities. On the type of Warnet users, there is little doubt that the overwhelming majority of users are high-school and university students in all cities but in Yogyakarta and Jakarta there are also some office and miscellaneous workers who come in after work hours. With exception of Bandung's Warnets, where half of the warnets take some appropriate measures, Warnet operators in most cities tend to be either unwilling, or unable, to do much about cybercrime-related activities and they also ignore the use of their equipment for downloading and browsing pornographic sites. However, some operators give warnings to high school and university students if they are caught using computers to browse or download pornographic sites. Most Warnets, however, on the grounds of protecting the privacy of clients and, in order to attract clients, provide semi-private booths. These operators in most cases disregard their users’ Internet activities, even though they may be cyber fraud, cyber crime- or pornography-related. 

Furthermore, according to many Warnet observers and from anecdotal evidence, in order to attract more customers, some Warnet owners promote the following: 
Vice-related Internet Websites: For example, relay chats sites that swap credit card numbers sites, pornography promotion sales and swap sites, prostitution sites, meet foreign rich men/women sites, video-brides sites and others. 
Paedophilia Websites: In Warnets with DSL -512k broadband- accesses, web cams access is now becoming very popular with youths (especially youth under the age of consent). In particular because they have an Internet videoconference facility which allows interaction with foreigners from developed countries. According to police reports, there are international paedophilia rings operating with members in Indonesia, which organize tours into the country and meetings with locals using the Internet, so that foreign paedophiliacs can lure under-aged young people with expensive gifts and travel to exotic places.
Distribution of Stolen Goods obtained with false credit card details is often carried out by some unscrupulous Wamet users (who may not have any consent of their owners). It is well known that many students or unemployed graduates are engaging in stealing credit card numbers (mainly from the servers containing the customer lists of small and medium-sized merchant vendors in US and EU countries). They then order such expensive goods as golf and other sports equipment, as well as musical instruments, computers and peripherals, and receive them in Indonesia. There is some anecdotal evidence that these activities have become more organized. Some gangs consist of a few advanced hackers (many are allegedly IT -students and unemployed graduates), various credit card numbers and goods distributors. 

While the above socially undesirable activities may not occur in the majority of Warnets, the fact that many have shown little regard for preventive action against cybercrime- or pornographic-related activities on their premises is disturbing. There is also some evidence that some hacking activities resulting in Internet fraud takes place from locations other than Warnets but there little doubt that Internet fraud and cybercrime from credit card abuse is serious. According to a survey conducted by a Texas-based security company, from mid 2000 until the end of 2001 this involved 1137 merchants, six million transactions and 40,000 customers (see www.clearcommerce.com), Indonesia is ranked second after Ukraine on the list of countries of origin for cyberfraud (credit card fraud). Also, 20 per cent of all credit card transactions from Indonesia are said to be fraudulent. One of the serious consequences for Indonesia is that in many e-commerce sites, customers who use an Indonesian address or have Indonesia's IP (internet protocol) addresses (202, 203) have been blocked from access. While many hackers can get around this problem by falsifying ("IP spoofing") their true addresses, the majority of Indonesia's Internet users are not in the same position and therefore are excluded from fully engaging in e-commerce. 

Most of the victims of criminal activities on the Internet are from the USA, followed by other developed countries. Most of the Indonesian perpetrators of cyber crime are suspected to live in smaller cities such as Bandung, Semarang, Yogyakarta or Jogja. According to sources within the Indonesian National Police (Cybercrime Division) most reported cyber fraud cases were related to victims in Indonesia (Solo and Yogyakarta). They were suspected to have been carried out from Warnets. While most Wamets offer the convenience of anonymity, many now require their clients to show their civic identity cards. Similarly, the few cases of suspected terrorist activities relating to the Internet have been linked to Warnets. 

Table 11: Modus Operandi Categories of Various Internet Related Frauds, 2002 

Category	Modus operandi	Total crimes in category	Residence of victims	Residence of suspects in Indonesia	
	Credit Card Fraud 
	184	168	 USA
2	UK
8	Australia
2	Germany
1	Denmark
1	Korea
1	Singapore
1      Bali, Indon.	71 Yogyakarta
17  Jakarta
22  Bandung
54  Semarang
  7  Solo
  6  Bogor
  4  Batam
  3  Cilacap
  7  Malang
  2  Medan
  2  Salatiga
  1  Makasar
  1  Purwokerto
  1  Bekasi
  1  Bengkulu
  1  UK
  1  Malaysia	
	Stock Exchange Fraud 
	0	0	0	
	Banking Fraud 

	4	1 Solo
2 Yogyakarta		
	Child pornography	0	0	0	
	Terrorism 
	3	1 Germany
1 Australia
1 USA	2 (Bali Bombing cases)	
	Arms smuggling	0	0	0	
	Drug trafficking	0	0	0	
TOTAL		192	191	206	
Source: Cybercrime Division of the Indonesian National Police (Bareskrim-Polri), 2002. 

Since August 2002, several activities have been carried out at the national level in Indonesia to counter cybercrime and other Internet related crime. The Cybercrime Unit of the Indonesian National Police commenced discussions with the private sector and participated in various international and regional discussions to coordinate responses from Law Enforcement, Legislature, Businesses, Academia and related NGOs. In March 2003, a new forum called the Indonesia Forum for ICT -Incident Response and Security Teams (ID-FIRST) was formed by the Indonesia Information Technology Federation (IITF) as a private sector-led initiative to formulate policies and implement practical action to: 

(1) Improve Trust & e-Security (5 elements): Awareness Raising and Consensus Building, Training and Education, Strengthening Legal and Policy Frameworks, Capacity Building in Technology Tools, and Computer Emergency Response Teams (ID-ISP-CERT and ID- CERT which are linked to ID-FIRST). The two CERT teams collaborate to coordinate over Incident Reporting/Data Collection and Crisis Management. 

(2) Consolidate Partnerships between the Private Sector, Academia, and Government, including Law Enforcement Agencies (LEAs), emphasizing the need to improve e-Security as part of the Business/Investment Climate and Employment Opportunities in Indonesian IT industries. 

(3) Collaborate with multi- and bi-lateral donor organizations as well as with other CERT/IT-security organizations (some examples are APCERT-AusCERT/AusAID, CERT/CC-US, FIRST.org /USAID, TW-CERT/, KISAIKOICA, JP-CERT/JICA, MYCERT/NISER/KTKM) that are willing to assist and accelerate Indonesian e-Security programs. 

(4) Improve Wamet Security by: (i) developing Warnet Industry Code of Conduct, Community Awareness Raising Programs and Enforcement (through the Warning And Response Point (WARPs) security points program); (ii) improving ID-ISP-CERT's Incident (or Internet Abuse) Reporting Scheme via Email (address: abuse@apjii.or.id); (iii) Improve e-Security information availability in the Indonesian language; (iv) improve incident "ticketing system" and quality of incident reporting handling by adopting the standard called "Incident Object Description and Exchange Format" (IODEF, see http://www.terena.nl/tech/task-forces/tf-csirt/iodef/) 

ID-FIRST supported by the Indonesian IT Industry Federation (IITF) continues to search for domestic and international partners to work together in dealing with the growing cybercrime and Internet-related crimes. There were several significant Asia Pacific Regional events that are associated with the APEC process: the Cyber Security Declarations (Shanghai Telmin5, March 2003) and the APEC Economic Leaders Meeting (Program of Action and Statement on the Security of ICT Infrastructures), Los Cabos, Baja California Sur, Mexico in October 2002. There is on-going APECTEL e-Security Task Group which has among its aims is to let each member economy to establish its own APEC Computer Emergency Response Teams (AP-CERT). Such a centre will have to be staffed 24X7 and functions as the first Point of Contact and Center for the Capacity Building Network. 

At the national Ministry of Communication and Information (Kominfo), the IT Security Task Force was also established in July 2003 to work on several priority initiatives: a special MoU between Kominfo with the National Police; the development of a "Cybersecurity Strategy"; the development definition of Architecture, Roles and Responsibilities; Business Model; Funding Mechanism and Contributions; and Technical Assistance for a future e-Security Agency for Indonesia. Meanwhile, the Indonesian Parliament is due to put in place the legal framework for e-Commerce by passing the Draft Information and Electronic Transaction Bill (RUU-ITE) by early 2005.  However, a firmer legal basis is needed in Indonesia, such as that which would be provided by having a Cybercrime law, and a Privacy and Freedom of Information Act.

1.3 CONCLUDING COMMENTS 

Greater Connectivity leads to greater productivity. An overview of Indonesia's ICT status suggest that there are some improvements in the overall connectivity indicators for Indonesia but the low base means that Indonesia must accelerate its connectivity readiness. Internet kiosks or Warnets can play an important role in this process. This is helped by the better understanding of the characteristics of the Internet kiosks surveyed (the legal status of ownership, software, hardware and other operational indicators). 

Better Connectivity leads to greater diversity. Notwithstanding the economic and regulatory impediments, the surveyed Warnets appear to be sustainable with considerable potential and should try to diversify among themselves, eventually becoming one of the several types for "multi-function community tele-centers (MCTC), warnets with additional value-added business activities, such as: business centers for small and medium enterprises (SMEs); English-language and other e-learning training centers; as well as other health and government information service centers. There are several alternatives for Warnets other than becoming effectively sited for cybercrime sight or game centers. Warnets can be encouraged to consider transforming themselves to one of the many proto-types of MTCs. If such a strategy can be implemented, then Wamets can act as accelerators for Indonesia's economic revival and become a link to the Global Information Society particularly from MTCs in secondary towns, rural and remote regions. 

Better capacity building will bring greater security. As with all cybersecurity issues, coordinated activities are needed involving the private sector, legislative, political and governmental organizations. With better facilities and training, both ID-CERT and ID-ISP-CERT will be able to respond more quickly to cyber-incidents. 

As an overall conclusion, the paper argues that cybersecurity considerations should be built into ICT public access at the outset of the development of the system. If these measures are not taken, then there is an increasing risk that the Wamet phenomenon can become a cyber "Pandora’s box", in that they become a source of many social-ills, notwithstanding their initial expectations of yielding the many benefits of the Information Society. With nearly 200 countries connected to the Internet, cyberfraud and cybercrime have become a local, regional and global issue that requires the full participation and cooperation of the public and private sectors in all countries, including the 180 developing countries around the world. Initiatives such Indonesia's ID-FIRST, IT Security Task Force and APECTel's e-Security Task Group and AP-CERT are only the initial steps towards combating cybercrime and dealing with the glaring gaps in such work so far, especially in terms of (i) bringing about local, national and international coordination and (ii) tackling the woefully deficient legal framework and organizational capacity building in developing countries such as Indonesia. However, without such steps it will be difficult to fully realize the benefits of Information Society. 

ACKNOWLEDGEMENT 

We are grateful to the Chung-Hua Institution for Economic Research for providing us support to present the initial research at the World Forum on Information Society, Geneva, December 2003. We are also indebted to Mr. John Pasaribu, Mr. Eka Ginting, Mr. Richard Mengko, Dr. Onno Purbo and Dr. Naswil Idris (fellow WSIS colleagues) for their helpful comments. We gratefully acknowledge all the Internet Kiosk owners and operators who voluntary shared their extensive knowledge of the industry.  Without such cooperation, this research would not have been completed. All errors and omissions are ours. 

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