Controversy over Net Neutrality: US’ Abolishment of Net Neutrality Fuels Local Internet, Content Business Operators’ Worries | BusinessKorea

Monday, January 22, 2018

The abolition of net neutrality in the United States is strengthening the claims of Korean telecom operators’ request to scrap the principle of network neutrality in Korea.
The abolition of net neutrality in the United States is strengthening the claims of Korean telecom operators’ request to scrap the principle of network neutrality in Korea.
Seoul, Korea
18 December 2017 - 10:00am
Cho Jin-young

The abolition of net neutrality in the United States is strengthening the claims of Korean telecom operators’ request to scrap the principle of network neutrality in Korea, fueling the worries of Internet and content providers.

“The principle of network neutrality in Korea should be maintained and strengthened in order to nurture next-generation internet industries and help Korean start-ups enter the global market,” the Korea Internet Companies Association (KICA) which represents Korean internet and content companies said with respect to the US Federal Communications Commission (FCC)’s decision to abolish the principle of network neutrality on December 14. In Korea, internet service providers (ISPs) are regarded as telecommunication service providers and the principle of network neutrality is being implemented based on it.

When the principle of network neutrality is stamped out, telecom service providers will be able to charge more for certain services of Internet content companies or control the speed of each company's internet service. It will become possible to process data for a company that pays less money and its traffic speed and raise the traffic speed of a company which pays more.

A consensus has strengthened in particular among telecom service operators that the principle of net neutrality needs to be revised due to the development of new content industries such as virtual reality (VR) and augmented reality (AR), which require fast big data transmission in Korea.

Telcos have been claiming that internet and content providers should shoulder a heavy financial burden to invest in telecommunications networks in response to rapidly increasing data traffic. Telecommunication traffic in Korea which was 23,000 terabytes (TB) per month in 2012 more than doubled in five years such as topping 250,000 terabytes in January 2017.

"Traffic will be several dozen times as much as the current traffic when the 5th generation telecommunication era begins. All investment in network equipment will be made with money from the pockets of the telecommunication companies only," said an official of the telecommunication company. "Only content providers will make huge profits without paying their fair share in such investment. They claim that the principle should be amended or abolished so that cost for network usage should be shared by Internet and content companies.

Global internet and content companies such as Facebook and YouTube which aroused controversy in the Korean market by paying no network use fee are also carefully watching what conclusion Korea will arrive with reference to the principle of net neutrality. This is because telecom operators can begin charging internet and content companies in earnest by differentiating their services, citing the dismantlement of the principle of network neutrality.

Using their overwhelming traffic as an excuse, internet and content companies are provided with separate cache servers which are a bypassing means by Korean telcos but not paying any fee for the cache servers. Korean telcos have had little choice but to provide the cache servers for them for fear of complaints from subscribers using these services so global internet and content companies have been maintaining their service quality without paying a penny. In May, as SK Broadband did not follow Facebook's request to install a cache server, Facebook blocked access from Korean users, sparking off public criticism.

"If the principle of network neutrality is abandoned in Korea, we will be able to prevent global Internet and content providers from using Korean internet networks free of charge and their high-handedness,” an ISP industry official said. “We will be able to provide better quality network service to consumers."

"In particular, Facebook is planning to expand its VR content business with large data traffic by launching Oculus Go, a VR platform device that can be used without a smartphone early next year. Korea's dismantlement of network neutrality is a major obstacle to the plan," another ISP industry official said.

In this regard, the Ministry of Science and ICT clarified its position that the Korean government will adhere to the principle of network neutrality. "A change in the principle of net neutrality in the United States does not affect Korea’s policies," said an official at the Ministry of Science and ICT. "There is no plan to change domestic guidelines on network neutrality right now."

"I think we should pay a corresponding price for companies that over-induce data traffic," Lee Hyosung, chairman of the Korea Communications Commission, said, revealing his personal opinions on December 6. "The principle of network neutrality is appropriate for infrastructure that was built in the past with the government taking the lead, but it is an superannuated principle when the ICT sector is entering the 5G era," said Kim Sung-tae, a lawmaker of the Liberty Korea Party.

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