"Content Usage Fee Negotiation Breakdown and Viewer Rights Infringement: Operators Must Take Responsibility" Preview of the Science and ICT Committee Audit Issues

[Asia Economy Reporter Seulgina Jo] The unprecedented broadcast suspension crisis stemming from the conflict over paid broadcasting content usage fees between CJ ENM and telecom companies is expected to be a key topic at the 2021 National Assembly Science, Technology, Information and Communications Committee (STICC) audit. Issues such as KT's 10-gigabit internet speed reduction controversy exposed by YouTuber 'Itsseop' and the promotion direction of 5G 28GHz are also considered major audit issues.

According to the '2021 Audit Issue Analysis' report released by the National Assembly Legislative Research Office on the 3rd, this year's STICC audit is expected to focus intensively not only on negotiations for paid broadcasting program usage fees and the calculation of broadcasting channel fees but also on establishing the promotion direction for 5G 28GHz, preventing internet service speed degradation, protecting online platform users, and fostering an ethics-based foundation for artificial intelligence (AI).

◆Concerns over Viewing Rights Violation Due to Negotiation Breakdown

First, the Legislative Research Office pointed out that as broadcasting platforms expand to new media such as online video services (OTT), the principles and standards for program usage fee negotiations and transactions among paid broadcasters are changing, raising concerns about disputes and violations of viewing rights as a core agenda. A representative case was the breakdown of program usage fee negotiations between CJ ENM and LG Uplus in June, which led to the suspension of live broadcasts of CJ ENM channels on U+mobile TV.

The Legislative Research Office stated, "CJ ENM insists that it is natural to receive fair compensation for content, while LG Uplus claims that the major broadcasting channel operators (PPs) are demanding unreasonable fee increases," adding, "Broadcast suspension due to negotiation breakdown ultimately causes inconvenience to paid broadcasting subscribers and may infringe on their viewing rights."

In particular, CJ ENM and the three IPTV providers (KT, SK Broadband, LG Uplus) are also in conflict over the overall content usage fee levels for IPTV, not just mobile, so such disputes are expected to continue.

Accordingly, the Legislative Research Office suggested that if users' viewing rights are infringed due to channel supply suspension between paid broadcasters, the operators should bear some responsibility. The office pointed out, "Broadcast suspension (channel supply suspension) is not simply a result of negotiations between operators," and "Subscribers who pay fees but cannot receive the channels they originally watched due to negotiation breakdown between paid broadcasters have their rights violated, so responsible measures such as compensation should be taken."

Furthermore, the office added that it is necessary to review the government's role in mediation and adjustment and to analyze the current standards and methods for program usage fee determination among broadcasters to prepare reasonable guidelines and improvement plans.

◆Nationwide 5G 28GHz Network Deployment Slips Away

The status of the deployment of 28GHz 5G base stations, known as 'real 5G,' is also a key agenda item in this audit. The three telecom companies?SK Telecom, KT, and LG Uplus?are required to deploy a total of 45,125 base stations by the end of the year, but as of the end of June, only 125 have been installed. This falls far short of the number promised to the government at the time of frequency allocation, effectively indicating abandonment of the base station deployment plan.

The 28GHz band has a short radio wave reach, requiring many base stations to be installed. Due to low concrete penetration rates, its usability in urban areas is also limited. This is why the nationwide deployment of 28GHz, which the government previously promoted as "20 times faster than LTE," is realistically considered difficult.

Telecom companies argue for B2B utilization such as smart factories and smart farms within industrial complexes instead of nationwide deployment, but the B2B business model is still understood to be in an immature stage. This background has led to criticism that the 28GHz 5G commercialization represents a failure of the government's frequency policy.

However, despite this situation, the 28GHz policy direction has not been revised. The Legislative Research Office reported, "The Ministry of Science and ICT plans to promote pilot projects for 28GHz activation and subway Wi-Fi demonstration projects," but "there is no plan to revise the target of deploying 15,000 base stations by 2021."

Therefore, there are calls for detailed policy formulation that considers technical levels from the frequency allocation process. It is explained that feasible installation obligations must be established by reviewing the characteristics of the frequency band, current technology levels, and installation possibilities at the time of allocation.

The Legislative Research Office emphasized, "The feasibility of nationwide 28GHz installation and frequency utilization plans based on that feasibility must be carefully reviewed and clearly established as future policy directions."

◆Internet Speed Reduction Controversy Triggered by Itsseop: "Terms of Use Should Be Improved"

The 10-gigabit internet speed reduction controversy is also a matter of interest. Last month, the Ministry of Science and ICT and the Korea Communications Commission conducted an inspection of four telecom companies?KT, SK Broadband, SK Telecom, and LG Uplus?regarding the quality degradation of 10-gigabit internet services. They confirmed cases where speeds were not measured at all upon internet activation or where activation proceeded despite speeds falling below the minimum guaranteed speed.

This issue originated from IT YouTuber Itsseop's April disclosure that the actual speed of his KT 10-gigabit internet service was about 100Mbps, only 1/100th of the contracted speed. Subsequently, the Ministry of Science and ICT decided that telecom companies should automatically reduce customer fees when such problems are detected and raise the minimum guaranteed speed for 10-gigabit internet from about 30% to 50%.

The Legislative Research Office stated, "To prevent users from misunderstanding internet service speeds due to product names, telecom companies should be obligated to explicitly notify the 'minimum guaranteed speed' at subscription and show speed measurement results." Additionally, it said, "To improve user convenience in speed measurement and considering that if users receive discounts for more than five days per month, it is highly likely that contractual obligations have not been properly fulfilled," it is necessary to consider improving terms of use to include certain compensation.

Along with this, internet platform user protection measures are also highlighted as an issue in this year's audit. The Legislative Research Office pointed out that as new media platforms such as live commerce increase, cases of user interest infringement are rising, but the current law limits the Korea Communications Commission's role. It explained that guidelines should first be prepared and recommended to the industry. Furthermore, it recommended establishing reasonable measures through consultation with other ministries on whether to resolve these issues under existing general laws or through special legal regulations.

Other major issues mentioned include the market situation of MVNOs showing concentration in subsidiaries of the three major telecom companies, the establishment of an AI ethics foundation triggered by the Iruda incident, metaverse ecosystem construction, reasonable regulation of OTT services, and responses to false and manipulated information related to the COVID-19 pandemic.