Network neutrality at risk

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Network neutrality at risk

Korea’s telecom companies claim they are finding it increasingly difficult to maintain network neutrality, or the principle that Internet service operators should not discriminate between Internet traffic.

As the global debate on the merits of the issue continues to rage, Korea finds itself at the forefront due to its high Internet penetration rate and the world-leading status of its tech titans.

And while network operators are finding it hard to support the principle as the explosive popularity of smartphones and tablets has triggered a veritable tsunami of traffic, manufacturers of smart TVs together with Web portals and app developers support it, as network access is vital for their businesses.

More vocal opposition

According to sources in the industry, SK Telecom, KT and LG U+ - the country’s three telecom companies - recently delivered an official document to the Korea Telecommunications Operators Association (KTOA).

The document states their belief that smart TV makers and Web portals should be charged according to usage.

“We have reached an agreement demanding payment for how much they use the networks, and [in return] we take charge of the network operations and quality management,” a source said.

The KTOA is expected to officially comment on the matter soon.

The move comes as the companies have sent numerous requests to major makers of electronic devices, such as Samsung Electronics, and Web portals, like NHN, to discuss the issue. But the telecom companies claim that their appeals have consistently fallen on deaf ears.

“We have sent such requests more than ten times, but manufacturers and Web portals are just avoiding contacting us,” a senior executive at LG U+ said. That left the companies with few options apart from turning to the KTOA.

Companies already pay to use the networks, even with the current system, but the charges are lower and levied without discrimination based on usage. This means that a corporation that eats up 100 gigabytes and a personal user that requires only 1 percent as much data pay identical fees.

And this is precisely what the telecom firms are complaining about.

They no longer want to overlook how those giant electronics companies and Web portals - which contributed nothing to the development of the networks - clog up the systems that telecom firms spend trillions of won every year maintaining and expanding.

Fear factor: Smart TVs

Telecom companies are particularly worried about the advent of smart TVs, which are connected to the Web and based on huge investments by companies like Samsung and LG, for the huge congestion they threaten to herald.

“According to industry forecasts, by the end of 2013 there will be some 2.94 million smartphones in Korea, and that is more data than telecom operators can handle,” said Kim Tae-hwan, a senior director at KT. Kim hopes to see more industry debate about the issue to prepare for the era of smart TVs.

However, manufacturers are reluctant to become embroiled in the controversy before smart TVs, still in their infancy, have gone mainstream. They fear a hike in set prices that could drive away potential consumers due to inflated fees.

Yoon Boo-keun, the president of Samsung Electronics’ visual-display units department, told reporters recently that, “We haven’t received any reports [on the issue]. It’s a national issue and therefore we should conform to the global standard.”

Another source at an electronics manufacturer said, “Telecom operators already receive subscription fees from consumers. Asking for money [from smart TV makers and Web portals] is tantamount to double charging.”

Some critics say there is more to gain by preserving the status quo, such as better software for domestic industries and richer content for consumers.

“Everyone is calling for the need to boost software and content, so we cannot just consider the position of telecom operators,” a source at a Web portal said. “Telecom operators need to look at the larger picture, as the information and content made available through the networks has become richer and more diverse [and therefore should not be restricted].”

By Lee Soo-ki, Kim Hyung-eun []

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