Support Amounts Can Differ by Retail Store
Discriminatory Application by Subscriber Prohibited
Temporary Preferential Subsidies Allowed for Seniors and People with Disabilities
On the 7th, when the government approved the partial amendment of the Enforcement Decree of the "Act on the Improvement of Distribution Structure of Mobile Communication Terminal Devices (Terminal Distribution Act)" at the Cabinet meeting, a banner related to mobile phone discounts was hung at a mobile phone store in Seoul. Photo by Kang Jinhyung aymsdream@
With the repeal of the "Act on the Improvement of Distribution Structure of Mobile Communication Terminal Devices" (Terminal Distribution Act) on July 22, the regulation that set an upper limit on subsidies at mobile communication retail stores will be abolished. However, discriminatory subsidies based on certain subscriber characteristics, even when the subscription type, plan, and device conditions are the same, will remain prohibited. Temporary preferential subsidies for seniors, people with disabilities, and other vulnerable groups will be allowed.
The Korea Communications Commission and the Ministry of Science and ICT announced on the 23rd that, as follow-up measures to the repeal of the Terminal Distribution Act and the amendment of the Telecommunications Business Act, they will pre-announce a revision to the Enforcement Decree of the Telecommunications Business Act, which will take effect from July 22. With the repeal of the Terminal Distribution Act, its enforcement decree will also be abolished, and the types and standards of unfair subsidy discrimination will be delegated to the Telecommunications Business Act.
Since the repeal of the Terminal Distribution Act will remove regulations such as the subsidy cap, as long as the source and amount of the subsidy, as well as the conditions for using related value-added services, are properly specified in the contract, each retail store will be able to set different subsidy amounts. However, it will not be permitted to apply these subsidies in a discriminatory manner based on the subscriber’s age, residence, or physical condition.
Meanwhile, the authorities have decided that temporarily providing preferential subsidies to digitally marginalized groups, such as seniors and people with disabilities, will not be regarded as unfair discrimination based on subscriber conditions.
For example, holding an event to provide additional subsidies to people aged 65 or older around Parents’ Day, or increasing subsidies for people with disabilities during the period around Disabled Persons’ Day, will not be prohibited by the regulation that bans discrimination based on age or physical condition.
In addition, a new regulation will prohibit telecommunications companies from entering into service contracts with the management bodies of apartment complexes or other collective buildings that restrict the choice of residents. If violated, the maximum penalty will be set at 1 percent of the company’s sales.
Lee Jinsook, Chairperson of the Korea Communications Commission, stated, "The Terminal Distribution Act is being repealed for the first time in 10 years to help reduce household communication costs, and its implementation is imminent." She added, "We will ensure that follow-up measures, such as the revision of the enforcement decree, are carried out without delay so that the benefits to the public and the effects of revitalizing market competition can be felt."
Yoo Sangim, Minister of Science and ICT, also said, "We will revise subordinate regulations to maximize the effect of the repeal of the Terminal Distribution Act, which is intended to promote competition among businesses in providing subsidies and enhance consumer benefits."
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