[Exclusive] Three Major Telecoms to Compensate 10 Times for Outages Under 2 Hours

Domestic Telecom Companies Report Terms of Service Amendments to Ministry of Science and ICT
Compensation of 10 Times Monthly and Additional Fees for Outages Under 2 Hours
Fair Trade Commission Accepts Telecom Companies' Voluntary Corrections... Unfair Review Procedures End

From now on, telecommunications companies must compensate customers ten times the monthly fee and additional usage charges corresponding to the duration of the service outage, even if the service disruption lasts less than two hours.

According to the industry on the 14th, telecommunications and IPTV providers such as SK Telecom, KT, LG Uplus, and SK Broadband have reported a revision of their terms of service with the Ministry of Science and ICT reflecting this change. The Fair Trade Commission, which had been reviewing the unfair terms of these telecom companies, also agreed to accept this measure and concluded the review process.

The services with revised terms include 5G, LTE, internet, internet phone, and IPTV. The revision states that if the company intentionally or through gross negligence fails to provide service, even if the outage lasts less than two consecutive hours, customers can claim compensation equivalent to ten times the monthly subscription fee and additional usage charges for the outage period.

The previous terms only stipulated tenfold compensation if the telecommunications service interruption exceeded two hours. There was no compensation regulation for outages under two hours. The Fair Trade Commission, which was examining the unfair terms of telecom companies, decided to accept the companies' voluntary corrective actions. A Fair Trade Commission official explained, "We judged that there was no practical benefit in continuing the corrective measures due to the telecom companies' voluntary corrections, so we ended the review process."

The revision of the telecom companies' terms follows criticism that KT's consumer compensation plan was grossly insufficient during the nationwide wired and wireless network outage incident in October 2021.

The KT network outage began around 11:16 a.m. on October 25 and lasted between 40 to 89 minutes. During router replacement work at the KT Busan office, a worker entered an incorrect configuration command, which caused routing errors and led to a nationwide internet network outage. Following an increase in DNS traffic, the network failure occurred and was restored around 12:45 p.m.

Subsequently, KT proposed a compensation plan totaling approximately 35 to 40 billion KRW. Calculated as an average amount per individual, wireless subscribers on a 50,000 KRW plan would receive about 1,000 KRW, and small business owners would receive up to around 8,000 KRW. However, small business owners affected by the telecom outage protested that the compensation was too small.

The Citizens' Coalition for Economic Justice (CCEJ) and the Consumer Sovereignty Council filed a request with the Fair Trade Commission in November of the same year, claiming that the compensation clauses in the terms of service of SKT, KT, LG Uplus, SK Broadband, and other telecom companies were invalid and requested a review of unfair terms.

Han Ki-jung, Chairman of the Fair Trade Commission, also reported plans to inspect unfair terms during last month's presidential work briefing and announced a firm stance on addressing consumer rights violations.