Pakistan this week demanded that all internet providers (ISPs) inform authorities if their customers were using virtual private networks (VPNs) to access the web, ostensibly to check use by militants.

Anyone that needs to use this technology must now apply for special permission.

VPNs, of course, allow internet users to connect to the web and send e-mails undetected and without fear of government interception. Militants may be using them, but so are foreign and private companies including banks and credit card issuers and news organisations, to send data and other senstive information that cannot be intercepted by Pakistan's military and civil intelligence agencies.

They probably will not be lining up outside the offices of the Pakistan Telecommunication Agency, but they will certainly be more wary of government snooping.

Pakistan's 20m internet users have previously been banned from social networks such as Facebook, apparently because of blasphemous material about the Prophet. BlackBerry access can also be dicey because of controls.

But Pakistan is not the only country in the region that is moving toward stricter internet controls. India has moved to closer scrutiny of the internet, BlackBerry and even pre-paid mobile communications after the November 2008 militant attacks, citing security reasons. Even Indonesia has made noises.

And China, of course, is finding new ways to monitor internet use. In the latest such move, state paper China Daily has warned that Communist Party control is at risk unless the government takes firmer steps to stop bogus opinion on the internet from manipulating public sentiment.

While a commentary in the People's Daily does not amount to a policy directive, it is still a good barometer for government thinking, and may well signal to tougher controls.

China already filters the Internet with a heavy hand, blocking social networks such as Facebook, YouTube and Twitter, and warning homegrown microblogs, including Sina's Weibo, of the need to rein in debate. There are nearly 200m weibo users in China, and the numbers are set to grow.

But beyond them, such controls have wider implications for companies operating in China. Unilever earlier this year was fined for merely talking about raising prices on account of inflation. Google exited China because it disagreed with the curbs and controls.

But these markets are too big to ignore. Controls by the state may well go not just against a company's philosophy, but also interfere with essential communications and operations. And that's something for not just internet and telecoms companies to consider.

It's a fine line that companies must tread when it comes to controls in these markets.


The Friday Review is a weekly FT Tilt column. Rina Chandran, FT Tilt's Asia bureau chief, offers news and views on Asian movers and shakers, companies and markets, regulators and regulation, economies and politics, executives and politicians. See all our Friday Review columns via this link -- you can also subscribe by email.


See also:
Coverage of internet in Asia - FT Tilt
Coverage of political risk in Asia - FT Tilt