The Pakistan Telecommunication Authority (PTA) has unveiled a new strategy aimed at regulating Virtual Private Networks (VPNs) in response to previous unsuccessful attempts to enforce compliance. This initiative comes as authorities grapple with the proliferation of unregistered VPNs that complicate efforts to monitor online activities.

Under the new framework, the PTA will establish a licensing category specifically for companies seeking to offer VPN services. This means that any proxies not provided by licensed entities will be classified as unregistered and subsequently blocked.

In a recent press release, the PTA confirmed that it has resumed issuing Class Licenses for Data services, which VPN providers must acquire to operate legally within Pakistan.

The push for localized VPN services was largely driven by the Pakistan Software Houses Association (P@SHA), which represents companies providing IT and IT-enabled services. P@SHA Chairman Sajjad Syed emphasized the importance of this initiative for the country’s burgeoning freelance community, which includes approximately 2.5 million individuals, many of whom are women supplementing their family income through IT-related projects.

He noted that to accommodate these freelancers, a model more aligned with international standards was necessary.

The new licensing regime will require local companies, bound by Pakistan’s laws and regulatory provisions, to provide proxy services. This approach allows the PTA to exert greater control over VPN providers, contrasting with the current landscape where many VPN services are offered by foreign companies. The licensing process will involve companies paying a fee of Rs300,000 for nationwide services and Rs100,000 for provincial offerings. These licenses will be valid for 15 years, with the possibility of renewal for an additional term.

The PTA’s framework also included stipulations that allow the government to monitor the content accessed by local VPN users, thereby addressing security concerns associated with VPN usage. Users who are dissatisfied with one VPN service will have the option to switch to another provider, similar to the flexibility offered by cellular companies and internet service providers.

Despite the regulatory framework, concerns have been raised regarding the implications for user privacy. The licensing terms dictate that VPN providers must comply with the Pakistan Telecommunication (Re-organization) Act 1996 and provide the PTA with information as requested. Notably, a provision requiring VPN companies to install “Lawful Interception” technology for national security purposes has raised alarms about potential invasions of privacy, as this could undermine the very anonymity that VPNs are designed to provide.

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Critics, including technical experts and representatives from the industry, have expressed skepticism about the effectiveness of this new scheme, labeling it a “futile exercise.” They argue that the excessive oversight powers granted to authorities may deter international companies from utilizing local VPN services. Shahzad Arshad, Chairman of the Wireless & Internet Service Providers Association of Pakistan, pointed out that while authorities may monitor local VPNs, it is unlikely that foreign entities will choose to engage with them due to these surveillance capabilities.