[Q&A] Hansanghyuk "Establishing Policy to Maintain Fairness Between Netflix and Domestic Operators"

[Asia Economy Reporter Bu Aeri] Han Sang-hyuk, Chairman of the Korea Communications Commission (KCC), stated regarding overseas online video services (OTT) such as Netflix and Disney Plus, "We will establish policies to maintain fairness (with domestic operators) in various investigations for user protection."

Prior to announcing the work plan on the 16th, Chairman Han said in a pre-briefing with reporters, "Overseas operators including OTT services like Netflix and the expected entry of Disney Plus will be subject to policies ensuring that domestic operators are not treated differently in relation to these services."

◆Below is a Q&A with Chairman Han

- The 20th National Assembly has effectively ended. When the 21st National Assembly opens, how will the KCC revise the Broadcasting Act amendment? Also, there is a project called 'User Protection Work Evaluation'; will global service providers like Netflix be included in the investigation?

▲ Regarding OTT, the government has expressed a principle of minimal regulation. However, existing pay-TV providers are demanding more active regulatory policies, while from the industry activation perspective, there are claims to keep regulations minimal and not exceed current regulations. It is time to gather opinions on this matter and coordinate with related ministries, especially the Ministry of Science and ICT.

Currently, demands for stronger regulation from existing competitors and demands for minimal regulation from the industry side are conflicting. We need to listen to these opinions thoroughly and prepare appropriate countermeasures and policies. Please watch the progress of this project and government discussions.

Newly introduced OTT services and overseas operators, including Netflix and the expected Disney Plus, will be subject to policies that maintain fairness in various investigations for user protection so that domestic operators are not treated differently.

- Regarding false and manipulated information, you mentioned the government will not intervene and will allow voluntary measures. Could you explain more specifically how this will be done?

▲ This relates to the privately operated fact-checking centers that are being promoted with secured budgets. Overseas, many private fact-checking centers receive IFCN certification, and their fact-check results are published and actively reflected. In contrast, fact-checking in Korea is still at a very basic level with insufficient infrastructure. Therefore, the government’s role is to support the infrastructure for these private fact-checking centers to fulfill their roles. The government will support but not intervene or interfere in the fact-checking activities conducted by these centers.

- Regarding pay-TV M&A reviews, regionality is currently being examined, and more M&As are expected. Since the IPTV Special Act, Broadcasting Act, and existing Pay-TV Act have many conflicting parts, is there a plan to reorganize the laws?

▲ We have been continuously researching this since last year and have discussed the need for a long-term plan for the entire broadcasting and telecommunications regulatory system, including legislative consolidation. Last year, we announced the results of a mid- to long-term plan study as a starting point. We plan to gather opinions from civil society and related ministries and prepare long-term countermeasures.

- Can you share the scale of financial burden and launch timing for the private fact-checking center?

▲ As mentioned, the fact-checking center will be supported in terms of infrastructure establishment through a public contest. We aim to establish it within this year.

- Regarding the implementation of domestic representatives for overseas operators, it is known that Netflix and Facebook have not appointed representatives despite the system being in operation, which has caused issues. If they fail to comply, will there be fines or sanctions? Will such measures be included in the enforcement inspection to improve regulatory fairness?

▲ We will encourage voluntary designation and participation and may use indirect coercive policies if possible. However, directly imposing disadvantages for not appointing representatives may raise other issues. We will consider this matter carefully.

- Regarding on-site inspection rights for pay-TV platforms, companies might find this burdensome. Could you explain why on-site inspection rights should be introduced at this time?

▲ On-site inspection rights are necessary to strictly respond to unfair acts affecting users regardless of timing. With new services, new types of unfair acts have emerged, such as service quality degradation, which were not previously included as prohibited acts, so we could not investigate them. We plan to carefully review these new user inconvenience acts or unfair acts caused by business concentration, include them as prohibited acts, and demand corrections through on-site inspections.

- Regarding on-site inspection rights, you mentioned pay-TV operators. Could you specify the scope? Also, if legal amendments are needed, please explain in more detail.

▲ The plan is to add new types of user inconvenience acts to the prohibited acts under current on-site inspection duties, targeting existing pay-TV operators. We are considering ways to apply this to newly introduced services, which may require legislation or other methods.

- You mentioned minimal regulation for new convergence services. Many say new convergence services will emerge through pay-TV-based M&As. Would expanding on-site inspection rights contradict the stance of minimizing regulation?

▲ Current on-site inspections are not coercive but based on voluntary cooperation from operators. Considering this, it should be acceptable. If the necessity increases, we will review whether this can be included in our specific duties.

- Regarding resolving outdated regulations, you mentioned lifting regional mutual exclusivity regulations. What exactly does this entail?

▲ Currently, there is a system regulating operators based on regional viewership shares. However, new services do not limit service areas to specific regions. OTT services are nationwide, and IPTV is similar. Yet, SOs are regulated by regional market shares, causing inequity between services. We are considering regulatory improvements to address this.

- Mid-roll advertising allowance has reappeared in the 2020 second half work plan after years of discussion. Is there genuine intent to push this forward this year?

▲ Mid-roll advertising and advertising regulations affect industry activation and regulatory fairness among services. While opposition exists, we remain committed to swiftly securing regulatory fairness.

- Regarding public broadcasting board appointments, last year the KCC submitted opinions on introducing a citizen recommendation system and reflecting public opinion in president appointments through amendments to the Broadcasting Act or current bills. However, this year’s plan only mentions gathering public opinions, omitting the citizen recommendation system. Has the policy direction changed, or will last year’s plans still be pursued?

▲ Expanding public participation in public broadcasting board appointments is a direction we support. Fundamental solutions require legislative amendments, which have not yet occurred. We will continue efforts for legal and institutional improvements. Meanwhile, we will discuss with broadcasters ways to increase public participation within current laws. For example, KBS and MBC have reflected this in their board appointment processes through internal resolutions. We will promote public participation through legal amendments where possible and encourage voluntary participation by broadcasters where laws do not support it.

- Regarding the Child and Youth Human Rights Protection Guidelines, this seems related to last year’s ‘Boni Hani’ case involving broadcasting content but also YouTube, i.e., telecommunications content. Does this guideline apply to telecommunications content produced by broadcasters?

▲ The child and youth protection issue is a guideline matter. It concerns human rights and vulnerable groups, which must be protected. Violations can be enforced by punitive laws, but our policy direction is to encourage broadcasters to voluntarily comply with these principles in broadcasting and telecommunications services, including YouTube services produced by broadcasters.

- Regarding the pre-approval procedure for the T-broad merger, how far has it progressed? Is it nearing completion? When will opinions be submitted to the Ministry of Science and ICT, and when is the result expected? Also, last year the KCC agreed to require pre-approval for pay-TV acquisitions. If KT pursues the acquisition of D’Live as a follow-up pay-TV M&A, will the KCC take the pre-approval role differently than with the LG Uplus acquisition?

▲ Under current regulations, pre-approval is mandatory for mergers; otherwise, only opinions are submitted. Since mergers, acquisitions, and stock purchases have the same market effects, the same procedures should apply.

Last year’s agreement with the Ministry of Science and ICT was to amend laws and systems to allow pre-approval for stock acquisitions as well. Until such amendments are made, we will actively express our opinions to achieve similar effects as pre-approval.

The ongoing pre-approval procedure is being reviewed by the committee. I understand there was a public request at the last meeting to complete the procedure before the Lunar New Year.

- Earlier, you mentioned broadcasting license renewals. Some broadcasters have violations almost equivalent to license cancellation. Strict judgments are expected from the KCC. The KCC cannot avoid responsibility, and it may be difficult for the KCC to self-regulate. Shouldn’t there be audits by the Board of Audit and Inspection or investigations by third-party supervisory bodies? Are there plans for this?

▲ We have stated the principle of strict procedures for license renewals and re-approvals. The ongoing investigation of a specific comprehensive programming channel is separate from the license renewal process.

We are conducting internal investigations, and subsequently, legal and accounting reviews will be needed to determine possible actions based on findings. If problems with the KCC’s previous license renewal process are found, we will apologize to the public and prepare improvement measures if legally necessary. Since nothing specific has been revealed yet, we cannot provide detailed answers at this time.

This content was produced with the assistance of AI translation services.