YANGON/TAIPEI -- Myanmar's military government is planning to outlaw the use of virtual private networks (VPN) under a proposed new cybersecurity law, Nikkei Asia has learned, in a move to reduce internet access and limit money going to pro-democracy groups.

According to a letter sent to industry sources, a revised draft of a cybersecurity law, which the military regime first proposed in February 2021 but subsequently abandoned, stipulates imprisonment of one to three years for the use of a VPN, a technology that allows private and secure internet connections.

The proposed law also stipulates that service providers have to provide the personal information of users -- including names, addresses and access history -- upon request from the authorities.

The letter, dated Jan. 13, was signed by Soe Thein, permanent secretary of the military's transport and communications ministry.

Myanmar has banned Facebook -- one of the most popular ways of communicating in the troubled country -- after the military takeover last February, according to a statement by Facebook. Currently, people can still access the social media platform via VPN.

"This is just the latest futile battle between the regime and Facebook," said a Yangon-based business analyst familiar with the draft legislation. "Their instruction to internet services to block the social media site converted the country overnight to VPNs." The anonymous source added that this is just another "attempt to criminalize Facebook use."

The crackdown by the military regime is meant to keep the public from contributing to the National Unity Government, a pro-democracy group set up by elected and ousted lawmakers. The NUG launched an online contribution campaign -- in the form of a lottery -- last August and said it sold out within an hour, raising over $60,000.

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If the proposed law goes into effect, the regime risks destroying Myanmar's online public space, with massive implications for business and the economy, industry executives and activists warn.

"If they achieve their intended impact, it would reverse Myanmar's modernization and send the country back to the Ne Win era, driving a further wedge between it and the rest of ASEAN," the analyst added, referring to the period when military strongman Ne Win ruled Myanmar as a one-party socialist state.

According to the January letter, the regime demands feedback from 13 government ministries, the national business lobby Union of Myanmar Chamber of Commerce and Industry (UMFCCI), Myanmar Computer Federation, Central Bank of Myanmar, banking and financial services and telecom operators by Jan. 28.

Industry bodies and business lobbies will be pressured to speak out. Last year's proposal was quietly shelved in the face of massive opposition from business and public associations. The UMFCCI, Myanmar Computer Federation and over 150 civil society organizations opposed the scheme. All western foreign chambers of commerce in the country, with the exception of AustCham Myanmar, also opposed the planned cybersecurity law.

"One of the very few successful advocacy efforts by businesses following the coup was [shelving of the] first cybersecurity bill. It was quite phenomenal," a Yangon industry source familiar with the matter said. "I think it will probably get a similar level of opposition this time."

Companies are worried about how a new law would hinder operations. Many, if not all, network operators, financial institutions and tech companies rely on VPN connections to operate, said a telecom executive based in Yangon.

"A blanket ban would be cumbersome and further hurt the business environment," the executive told Nikkei Asia. "Companies will struggle to comply and costly IT investments may be required. It's not purely about companies -- consumers also use VPNs for a variety of reasons, from accessing business services to accessing news and social media."

According to the annual "Freedom on the Net" report published by global nonprofit Freedom House last September, Myanmar was classified as "Not Free," marking the biggest decline in internet freedom scores among all nations evaluated.