KCC Research Project on Network Usage Fee Policy
'Government-Prepared' Guideline Implementation Status Survey Underway
Industry "Guideline Effectiveness↓"... Interest in Whether Legislation Will Be Established
The Korea Communications Commission (KCC) is once again reviewing the current status of network usage fees, which have sparked disputes between telecommunications operators and content providers (CPs). The commission plans to take a broad look, from whether the industry is complying with the guidelines established by the KCC to domestic and international conflict situations.
According to the national comprehensive electronic procurement system, Nara Market, on the 7th, the KCC recently issued a request for proposals for a research project titled "Policy Measures for Creating a Rational Internet Network Usage Environment." The research mainly consists of ▲analysis of dispute cases and major trends in domestic and international policies related to internet network usage ▲analysis of key issues ▲and policy measure research. A KCC official explained, "This research project aims to understand how things are done overseas and how contracts are currently made in the market to the fullest extent possible, in order to propose policy alternatives."
Although the KCC's operations have been temporarily paralyzed due to the opposition party's push to impeach the newly appointed KCC Commissioner Lee Jin-sook, it appears that issues related to network fees will continue to be reviewed. At the confirmation hearing held on the 24th of last month before the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee, Commissioner Lee stated, "Foreign online video services (OTT) like Google and Netflix do not pay network usage fees, causing asymmetrical disadvantages to domestic OTTs," and added, "If appointed as commissioner, I will pay particular attention to this issue."
The analysis of key issues also includes an investigation into the implementation status of the "Guidelines on Fair Internet Network Usage Contracts" (Guidelines). The guidelines were established in December 2019 amid controversies over discriminatory internet network usage contracts between domestic and foreign, and large and small businesses. This was because user harm occurred during the network usage contract process, prompting calls for government intervention. The guidelines have been in effect since January 27, 2020.
However, there are many negative views regarding the effectiveness of the guidelines, which lack legal binding power. The dispute between SK Broadband and Netflix, which began in April 2020 after the guidelines were implemented, was only resolved three years later through an agreement between the two companies. An industry insider said, "Negotiation power still effectively influences agreements," and added, "The fact that both ruling and opposition parties in the 21st National Assembly have proposed bills related to network fees also reflects the ineffectiveness of the guidelines."
There is also interest in whether the survey will lead to the preparation of legislation. Although the KCC proposed the guidelines as an alternative, if they are not being properly implemented, legislation could be considered. Another industry insider said, "Legal and institutional improvements are still necessary for the sustainable development of the internet ecosystem and the creation of a rational network usage environment," adding, "Voices calling for fair payment of network usage fees and institutional improvements are growing overseas as well."
Among the tasks of the research project, "Policy Measures for Internet Network Usage," the specific content includes "reviewing policy measures such as improvements to existing systems through stakeholder consultations and expert reviews." A KCC official said, "We have not decided on any conclusions regarding what alternatives will be proposed."
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