Damage already done, despite KL's U-turn on rerouting of web traffic

Concerns that large US tech firms may rethink investment plans in Malaysia

- Shannon Teoh

Although plans to prevent Malaysians from circumventing online restrictions to websites have been put on hold, concerns that this may be only a temporary respite have stoked fears of dampening investor sentiment and slowing the Anwar Ibrahim administration's push to grow the digital economy.

Communications Minister Fahmi Fadzil ordered regulators on Sept 8 to suspend the Domain Name System (DNS) redirection policy, which would have required all web traffic to be re-routed through local DNS servers and blocked the use of public or third-party DNS servers.

Days earlier, Mr Fahmi had defended the move amid a barrage of criticism over censorship and potential breaches of privacy and data security.

"The MCMC will continue engagements with all stakeholders... to ensure the objective of a safer internet will be achieved together," he said, referring to the Malaysian Communications and Multimedia Commission which regulates telecommunications.

The backlash came from not just industry experts and everyday consumers, but even lawmakers from Prime Minister Anwar's Pakatan Harapan (PH) coalition. This was after word had spread on Sept 5 that all firms providing web connections known as internet service providers (ISPs) - would have to implement the DNS redirection by the end of the month.

DNS is a system that translates domain names into numerical addresses used by computers to locate websites on the internet. While local ISPs often operate their own DNS servers, some web users use public DNS servers, such as those provided by Google or Cloudflare, to gain faster internet speeds or access websites blocked on local ISPs. Under the government plan, user requests from such third-party DNS servers will be redirected to those operated by local ISPs.