[2022 National Audit] "Difficult to Legislate Without Basis for Network Usage Fees"... Divergent Opinions in the Science and ICT Committee

Minister Lee Jong-ho of the Ministry of Science and ICT is responding to questions from lawmakers during the National Assembly's Science, Technology, Information and Broadcasting Committee's audit of the Ministry of Science and ICT and the Korea Post on the afternoon of the 4th at the Government Complex Sejong in Sejong City.
[Image source=Yonhap News]

[Asia Economy Reporter Oh Su-yeon] Amid ongoing disputes over network usage fees between global content providers (CP) and internet service providers (ISP), on the 4th, during the National Assembly Science, Technology, Information and Broadcasting and Communications Committee’s audit of the Ministry of Science and ICT, claims were made that it is difficult to resolve corporate contract issues through legislation without data such as network maintenance costs or contract details that would serve as the basis for network usage fee legislation. There was also a suggestion that instead of the government intervening in contract agreements related to network usage fees, costs should be shared for network advancement.

Jang Kyung-tae, a member of the Democratic Party of Korea, said, "I want to request data related to network usage fees through the Ministry of Science and ICT, but telecom companies are refusing. If the National Assembly is to legislate by saying it is unfair because CPs earn a lot of money and that usage fees should be paid, at least the competent ministry should verify the information," adding, "On what grounds will legislation be made and usage fees be set?"

He continued, "The very attempt to resolve conflicts between private companies through legislation is problematic," and added, "The controversy over network usage fees is not only a CP issue. It is also an issue for creators and could become a burden for the public."

Park Wan-joo, an independent lawmaker, proposed a plan to form a fund to share the burden of network advancement costs, similar to discussions currently underway in the United States and Europe, instead of imposing network usage fees on CPs.

Park said, "This should not be seen as a dispute between specific businesses, but rather a discussion on who and how much will pay for the costs incurred to provide stable internet services through network advancement," and added, "In Europe and the U.S., legislation is being enacted to establish universal service funds to which platform companies contribute for network investment." He also emphasized, "The basic data requested by Representative Jang should be transparently shared."

Minister of Science and ICT Lee Jong-ho and Vice Minister Park Yoon-kyu responded that the relevant data have not been disclosed as they are trade secrets.

Byun Jae-il, a member of the Democratic Party of Korea, argued that the government needs to intervene in cases of market failure and that the Ministry of Science and ICT, as the competent ministry, should actively express opinions on conflicts related to network usage fees.

Byun said, "All parties accessing the network must pay network usage fees. If someone does not pay, the cost is passed on to someone else. Ultimately, individual subscribers bear the entire burden," and urged, "Shouldn't the government intervene in areas of market failure? I ask the government to take an active stance."

Meanwhile, Park Sung-joong of the People Power Party said regarding the discussion on network usage fees, "It seems that the opposition party held a public hearing among themselves to collect network usage fees, but when Google, Netflix, and others jointly attacked creators, they backed down."

Cho Seung-rae of the Democratic Party of Korea said, "We should ask the ruling party’s position, not the opposition’s. They need to organize their positions and then ask."

Currently, seven bills related to network usage fees have been proposed regardless of party affiliation in the National Assembly. On the 20th of last month, a public hearing was held to review amendments to the Telecommunications Business Act related to network usage fee payments, but ruling party lawmakers did not attend. Subsequently, on the 26th, Representatives Park Wan-joo and Kim Young-joo held a meeting and are continuing discussions for legislation.