New IT Bill could kill innovation in Nepal, experts warn

  • Critics of the government’s Informational Technology Bill say it will add more red tape for internet companies
- Bhrikuti Rai, Kathmandu

Feb 21, 2019-

A new Information Technology bill proposed by the KP Sharma Oli administration has alarmed rights advocates as well as IT entrepreneurs, who say the bill is not in line with the government’s messages about Nepal being open for business opportunities and foreign investment, and could stifle innovation in the country’s nascent but growing information technology sector.

The bill, which will replace the existing Electronic Transaction Act (ETA), has been touted by the government as the most comprehensive and clear bill to address the long-held concerns around IT management. But critics of the bill say its wide scope nature and the vague language used in the provisions could instead mean more red tape for internet-based companies.  

For instance, the ETA’s definition of originator clarifies that intermediaries like the Internet Service Providers (ISPs) do not fall under the broad definition of “originator”, which includes anyone “who generates, stores or transmits electronic records, and this term also includes a person who causes any other person to carry out such functions.” However, the proposed IT act removes the clause regarding intermediaries. This, IT experts say, could jeopardise ISPs who are merely the medium of the content created and shared online.

“The government needs to at least communicate with us because we are the ones who will have to deal with the challenges of implementing the rules they enact,” said Bhojraj Bhatta, the managing director of internet service provider Net Max Technologies and the president of Internet Service Providers’ Association of Nepal. Bhatta and many of his peers say they were not consulted in the drafting process of the bill and have not seen a copy of the bill yet.

“I only found about these stringent provisions after reading media reports,” Bhatta said.

There is also a clause in the proposed IT bill which states that ISPs will not be penalised “if they remove any content deemed illegal by any public body or the court as soon as possible.” This was another reservation some of the stakeholders from the private sector had when they were consulted on the drafting of the bill a few months ago. Despite their reservations, this provision remains in the bill.

The possibility of being confronted in a situation where multiple public bodies flood ISPs with requests to remove anything they deem illegal would overwhelm these companies in more ways than one.

“We don’t want the responsibility of actively filtering content forced on us with the fear of punishment hanging over us,” said Binay Bohra, the managing director at Vianet Communications, another ISP company. “That’s not what technical service providers like us do.”

Bohra also expressed concerns over what provisions like these would mean for the country’s internet users if the government adds filtering online content to their responsibility.

“What kind of internet will the people get if we, the ISPs, start taking down sites one after another, to safeguard our business and because of the fear of government reprisal?” he said.

IT entrepreneurs are also worried about the provisions in the bill which requires them to seek permission from the government to bring equipment into the country. They are frustrated by the increasing red tape and say their businesses might be adversely impacted if the government bodies dealing with permission aren’t efficient.

“There is already a lot of restrictions for online ventures and pushing for more controls, like having to take multiple permissions, will only add to the hurdle,” said Subash Sharma, the CEO of F1 Soft International, one of the largest financial technology companies in Nepal. “You can’t expect innovation amidst such regulations in every step of the way.”

However, government authorities have defended the bill saying they are only trying to regulate those who might be misusing internet-based platforms.

In an interview with the Post, Mahendra Gurung, secretary at the Ministry of Communication and Information Technology, said the new law will pave the way for data security and accountability of internet companies in Nepal.

“We welcome the private sector, and encourage the international tech companies to follow the rules of our country if they are to operate here,” said Gurung.

On Tuesday, Gurung tweeted an article about New Zealand planning to impose a digital tax on Google and Facebook. “New Zealand will impose a digital tax on Google and Facebook, what about Nepal?” he wrote.

Replying to his tweet, people put forward questions about how the taxations would work, the obstacles to online payment that already exists in Nepal and how Nepal would be able to implement everything it set out to do with the new provisions to crack down on tech giants.

Gurung did not respond to any of the tweets, but the reply threads and engagement on the tweet summed up the confusion and apprehension among tech users and entrepreneurs regarding the vaguely-worded provisions in the bill.

Kathmandu-based tech blogger Anil Ghimire was among the handful of people who spent a considerable amount of time on Gurung’s tweet thread, replying to people’s questions about the proposed rules on tech companies.

According to Ghimire, there are multiple reasons why Nepal should first do its homework—from a business-friendly policy to necessary infrastructure to make the country a tech-hub—if it wanted internet companies to come to Nepal and run as a registered entity.

“If you don’t register here in Nepal, we can block your service means the government is not inviting the tech

companies to do business,” said Ghimire. “This is sending a wrong message to the world just before it is hosting Nepal Investment Summit in March.”

Published: 21-02-2019 10:15

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