Korea divided over U.S. net neutrality debate

Korean telecommunications companies and the Ministry of Science and ICT are closely watching the U.S. Federal Communications Commission’s proposal Tuesday to dismantle regulations that ensure equal access to the internet, also dubbed net neutrality regulations.

The rule put in place by the Obama administration prohibits internet service providers like AT&T and Verizon from stopping or slowing down certain websites. It also blocks internet service companies from charging users, including portal operators, more for higher-quality streaming and faster internet access.

Internet giants like Google, Netflix and Amazon have criticized the decision, claiming that it will allow telecommunications companies to play favorites or hurt the innovation of smaller start-ups. Despite this, industry insiders assume it is highly likely that the plan will be approved during the commission’s general meeting on Dec. 14.

“Under my proposal, the federal government will stop micromanaging the internet,” said FCC Chairman Ajit Pai, a Republican that has aggressively pushed a deregulation agenda, in a statement on Wednesday.

Pai also added that repealing the open-internet rules will create jobs, increase competition and lead to better, faster, cheaper internet access for Americans. Once the net neutrality rule is killed, telecom companies are expected to introduce internet services in different tiers.

Taking that idea into the Korean market, it could mean internet service providers like SK Telecom, KT and LG U+ gain higher negotiating power over giant content providers and portal operators that were previously “free-riding,” or not paying enough for the network they used, according to a source from the telecommunications industry.

“Dismantling the net neutrality rule essentially means content providers now have to negotiate with telecommunications companies to offer content with the optimum streaming settings,” said Park Kun-young, an analyst for securities firm Golden Bridge. “The impact of the U.S. decision has a small influence on the domestic market now, however, considering U.S. telecommunications companies’ major argument is that internet companies are reaping in massive profits out of network infrastructure they invested in, Korean mobile carriers may use the argument for future negotiations.”

Yang Jong-in, a researcher from Korea Investment and Securities also said the discussion in the United States could positively influence Korean mobile carriers in the mid to long term.

“As the United States has mostly led discussions on net neutrality and influenced internet companies like Google that operate globally, the FCC’s decision could have a worldwide impact,” Yang said in a research paper on Thursday.

Korea’s Ministry of Science and ICT is closely watching the discussion in the United States as well.

“As the final vote on the plan will be made next month and market response from the United States will likely show in the latter half of next year, we will review our regulations on net neutrality accordingly,” an official from the ministry said.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]