Hundred of billion net fee of Korean companies… ‘Free’ for foreign companies, reverse discrimination dispute heat up
Jung Yoon Hee | yuni@ | 2017-05-16 11:04:17
Why there is ‘net fee reverse discrimination’ between Korean and foreign companies?
There is a growing dispute between Facebook and SK broadband as network usage fees are increasing. Especially, there is a numerous controversy over the reverse discrimination between Korean companies and foreign companies. Korean internet companies are paying billions of won a year for traffic, while foreign companies are using the network for free, which raises the dispute between the companies.
According to the industry on May 15, Facebook required a "cache server" for seamless service to domestic carriers last year. The number of Korean users of Facebook is increasing, and traffic is expected to surge due to the introduction of UHD and VR content. According to inside the industry, Facebook traffic in Korea has been reported to have increased by more than 80%.
The cache server saves the contents that users frequently search in the domestic internet data center (IDC). There is no need to import content from overseas every time, which can increase the transmission speed and its quality. However, Facebook has asked mobile carriers to pay for a cache server installation.
Therefore, SK Broadband has rejected the cache installation due to the issue of equity as domestic companies such as Naver and Kakaotalk are paying billions of won a year for net usage. LG U Plus is also in the process of negotiations. However, it is difficult to pay unilateral costs for the company.
SK broadband users are suffering from Facebook access obstacles as both sides fail to close the gap. SK Broadband claims that Facebook is changing its content delivery channel. Previously, Facebook was able to connect directly to KT networks in Korea and SK Broadband and LG U Plus to receive the content. However, SK Broadband claims that it is receiving content directly from the Facebook Internet Access Point (POP) in Hong Kong as the route is cut off.
Meanwhile, Facebook denies changing the channel. Facebook also claimed that the cost of the cache server should be borne by the mobile carriers. A Facebook Korea representative said, "Just as users do not pay for Facebook usage, the content providers do not need to pay to build their infrastructure. Other countries do not request network fee and only Korea requires the network fee and I do not think it is the problem of Facebook.”
Shin Min-soo, professor at Hanyang University pointed out, "Netflix has signed an agreement with Comcast, Verizon and AT & T to share the cost of building an internet network in the United States. It is a problematic attitude that Facebook will not be burdened with costs while requesting Cache installation."
The Korean internet industry insists that this opportunity should address the problem of revise discrimination against network users. Currently, domestic video service companies such as Naver, Kakatalk, and afreecaTV are paying network fees according to traffic volume. An Internet industry expert said, "Overseas companies have a cache server for free service in Korea, so quality is good and cost is low. Therefore the starting line itself is different. In fact, YouTube accounts for 70 ~ 80% video market in Korea due to this system. If we do the same way to facebook, domestic companies will continue to be at a disadvantage. Facebook now has a reason to slow down its services because of the arrogance that users will continue to use Facebook anyways.” Hel also added, "If Google and Facebook have servers in Korea, the problem would be solved. "Nobody wants to pay taxes because every company has to pay and the profits are clear."
Another industry expert also said, "Big companies will keep going somehow, but in the case of start-ups and venture companies, it is impossible to compete with overseas companies." He also mentioned, “This problem should be approached with regulatory equity as Korea`s internet ecosystem itself can collapse due to this dispute.”
Meanwhile, some also point out that the telecom industry has misplaced its first button. Earlier, YouTube also installed a cache server through a domestic carrier, but is not paying the fee. Instead, YouTube is paying an international line fee to bring content to Korea. For the service provider, it does not charge the international line fee, but instead it does not pay the domestic cache server fee. Professor Shin pointed out, "In the past, mobile carriers tried to provide a competitive service using YouTube, so they installed a cache server at their own expense, which is a great way to cut costs." He also pointed out, “VR and others are starting to become active and surely, the net fee is going to increase. Mr. Shin explained that this was not a "net neutrality" issue. Network neutrality is what prevents network operators (ISPs) from discriminating or stopping certain content.
The problem is that there is no legal basis to force overseas companies to pay the network usage fee. A representative of Ministry of Science, ICT and Future Planning, said, "Currently, there are no statutes or guidelines related to this situation, so we have no choice but to leave this issue to the negotiations between the operators.”
By Jung Yoon Hee yuni@
[ copyright ⓒ The Digitaltimes ]
There is a growing dispute between Facebook and SK broadband as network usage fees are increasing. Especially, there is a numerous controversy over the reverse discrimination between Korean companies and foreign companies. Korean internet companies are paying billions of won a year for traffic, while foreign companies are using the network for free, which raises the dispute between the companies.
According to the industry on May 15, Facebook required a "cache server" for seamless service to domestic carriers last year. The number of Korean users of Facebook is increasing, and traffic is expected to surge due to the introduction of UHD and VR content. According to inside the industry, Facebook traffic in Korea has been reported to have increased by more than 80%.
The cache server saves the contents that users frequently search in the domestic internet data center (IDC). There is no need to import content from overseas every time, which can increase the transmission speed and its quality. However, Facebook has asked mobile carriers to pay for a cache server installation.
Therefore, SK Broadband has rejected the cache installation due to the issue of equity as domestic companies such as Naver and Kakaotalk are paying billions of won a year for net usage. LG U Plus is also in the process of negotiations. However, it is difficult to pay unilateral costs for the company.
SK broadband users are suffering from Facebook access obstacles as both sides fail to close the gap. SK Broadband claims that Facebook is changing its content delivery channel. Previously, Facebook was able to connect directly to KT networks in Korea and SK Broadband and LG U Plus to receive the content. However, SK Broadband claims that it is receiving content directly from the Facebook Internet Access Point (POP) in Hong Kong as the route is cut off.
Meanwhile, Facebook denies changing the channel. Facebook also claimed that the cost of the cache server should be borne by the mobile carriers. A Facebook Korea representative said, "Just as users do not pay for Facebook usage, the content providers do not need to pay to build their infrastructure. Other countries do not request network fee and only Korea requires the network fee and I do not think it is the problem of Facebook.”
Shin Min-soo, professor at Hanyang University pointed out, "Netflix has signed an agreement with Comcast, Verizon and AT & T to share the cost of building an internet network in the United States. It is a problematic attitude that Facebook will not be burdened with costs while requesting Cache installation."
The Korean internet industry insists that this opportunity should address the problem of revise discrimination against network users. Currently, domestic video service companies such as Naver, Kakatalk, and afreecaTV are paying network fees according to traffic volume. An Internet industry expert said, "Overseas companies have a cache server for free service in Korea, so quality is good and cost is low. Therefore the starting line itself is different. In fact, YouTube accounts for 70 ~ 80% video market in Korea due to this system. If we do the same way to facebook, domestic companies will continue to be at a disadvantage. Facebook now has a reason to slow down its services because of the arrogance that users will continue to use Facebook anyways.” Hel also added, "If Google and Facebook have servers in Korea, the problem would be solved. "Nobody wants to pay taxes because every company has to pay and the profits are clear."
Another industry expert also said, "Big companies will keep going somehow, but in the case of start-ups and venture companies, it is impossible to compete with overseas companies." He also mentioned, “This problem should be approached with regulatory equity as Korea`s internet ecosystem itself can collapse due to this dispute.”
Meanwhile, some also point out that the telecom industry has misplaced its first button. Earlier, YouTube also installed a cache server through a domestic carrier, but is not paying the fee. Instead, YouTube is paying an international line fee to bring content to Korea. For the service provider, it does not charge the international line fee, but instead it does not pay the domestic cache server fee. Professor Shin pointed out, "In the past, mobile carriers tried to provide a competitive service using YouTube, so they installed a cache server at their own expense, which is a great way to cut costs." He also pointed out, “VR and others are starting to become active and surely, the net fee is going to increase. Mr. Shin explained that this was not a "net neutrality" issue. Network neutrality is what prevents network operators (ISPs) from discriminating or stopping certain content.
The problem is that there is no legal basis to force overseas companies to pay the network usage fee. A representative of Ministry of Science, ICT and Future Planning, said, "Currently, there are no statutes or guidelines related to this situation, so we have no choice but to leave this issue to the negotiations between the operators.”
By Jung Yoon Hee yuni@