As SK Broadband pursues Netflix for payments owed, politicians are divided on access charge proposals. It could yet be months before either situation is resolved
Lawmakers discuss access charges for content providers: On 21 October 2022, South Korea’s parliament engaged in an annual audit hearing of Ministry of Science and Technology (MSIT) policy, debating for a second time proposed legislation that would require large content providers to pay network access fees to the country’s telcos. During the first National Assembly hearing where the proposals were discussed, opponents such as Google and not-for-profit organisation OpenNet appeared to push back successfully against them; however, in the latest session, Google’s CEO was lambasted for providing unsatisfactory responses when questioned. As Netflix and Google currently account for over a third of domestic internet traffic, some National Assembly members argued that the firms have a responsibility to make greater financial contributions – and there were even suggestions that Google could be evading taxes. In response, Netflix stated that it is utilising technologies to help mitigate the impacts of rising data traffic and has spent close to $700m to date on Korean content.
The regulator paved the way for the current debate: The debate in parliament represents the latest flashpoint in a decade-long story. In 2012, KT blocked network access for Samsung smart TVs after they refused to pay for the increased traffic they were generating. Samsung argued that KT’s decision violated net neutrality, which led to intervention by the Korea Communications Commission (KCC). The KCC forced KT to unblock the devices, which was considered a win for Samsung, but arguably triggered the ongoing network access fee saga. Reforms to the country’s telecoms law in 2020 mean that content providers with at least 1m users and those responsible for more than 1% internet traffic must share accountability for (and cost of) providing a stable service to users. Since then, SK Broadband and Netflix have been locked in a legal battle over network usage charges, with the dispute intensifying following the launch of the popular Squid Game series. The current focus of the case is whether a free peering arrangement was established between the parties in 2018 when they agreed to move the network connection point from Seattle to Tokyo. With court progress slow, it could be several months before a final ruling is made.
Network fee proposals face growing opposition: Though the recent National Assembly hearing finished that day, ongoing deliberations mean that the controversial draft bill is still some way away from progressing to the next stage of the legislative process. Some politicians object to the proposals, concerned they could cause tech firms to raise subscription fees and that they could undermine local content creators. Earlier this year, it was reported that YouTube had threatened to cut investment in Korea over the push to impose charges. Meanwhile, a petition against proposed network fees has surpassed 250,000 signatures and support is growing. The Korean situation is made even more interesting by the introduction of net neutrality guidelines in 2018, which include the principles of no blocking, no throttling and no unreasonable discrimination. To get big tech to shoulder more of the infrastructure cost burden, European operators will need to square that particular circle between implementing ‘fair share’ and preserving a free and open internet.
