Netflix Power Abuse Controversy Boards Today's National Assembly 'Last Legislative Train'

Discussion on Resolving Free Network Issues of Global CP at the Science and ICT Committee Bill Subcommittee on the 6th
In the Context of Addressing the 'Legislative Gap'
Review of Bills Granting 'Network Quality Management' to CPs Planned
Netflix-Originated 'Network Free Riding' Issue Escalated to Legal Disputes

[Asia Economy Reporter Koo Chae-eun] The bill to resolve the 'free-riding on network fees by global CPs' ignited by Netflix's lawsuit against SK Broadband will be discussed on the 6th in the 20th National Assembly. As discussions arise that the only solution to stop the 'traffic hippo' content giants (CPs) from demanding free network use is legislation by the National Assembly, attention is focused on whether the bill will pass.

If the bills addressing the 'free-riding on network fees by global CPs' submitted to the committee pass, CPs will be obligated to manage network quality, or designated representatives will be appointed to ensure that Google, Netflix, YouTube, and others 'comply with Korean law in Korea,' providing a basis for negotiating network usage fees.

'Network Quality Obligations' Imposed on CPs... Bill to be Reviewed Today

On the 6th, the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee will hold the last bill subcommittee meeting of the 20th National Assembly to discuss bills related to regulating global CPs (content providers). The main bills to be presented include ▲ a bill imposing various obligations on large CPs to maintain telecommunication service quality (proposed by Assemblyman Yuminbong) ▲ a bill imposing technical measures obligations to maintain certain quality on major value-added telecommunications service providers occupying a certain scale of traffic (proposed by Assemblyman Kim Kyung-jin) ▲ and an amendment to the Information and Communications Network Act requiring information and communication service providers above a certain scale to install servers domestically (proposed by Assemblyman Byun Jae-il).

Although the details of the bills differ, the core is to make CPs responsible for 'network quality management' or to designate representatives so that global content giants like Google, Netflix, and YouTube 'comply with Korean law in Korea.'

Furthermore, inside and outside the National Assembly, the core issue of the enforcement gap in regulating global CPs is identified as the 'current legal system centered on incumbent telecommunications companies.' Although global content companies like YouTube dominate 40% of total traffic, the legal framework is still centered on incumbent telecom operators. There is a sense of problem that the current law framework does not cover issues related to newly emerged global CPs such as Netflix and YouTube, and discussions on amending the Telecommunications Business Act are expected to intensify in this subcommittee.

Legal Litigation Escalates Conflict... Also Seen as a Preliminary Battle Against Content Predator 'YouTube'

The conflict over network usage fees between global CPs and domestic telecom companies is escalating into legal litigation. The Korea Communications Commission (KCC) had made significant progress in mediating the conflict, including considering a video conference with Netflix headquarters, but Netflix suddenly filed a lawsuit. Netflix has a precedent of signing a network fee contract with Comcast in 2014, leading to criticism that it insists on 'free network use' only in Korea.

Experts point out that this should be an opportunity to start new discussions on 'responsibility sharing.' Lee Jong-kwan, a senior advisor at the law firm Sejong, said, "In the platform economy, issues inevitably arise about where to place responsibility for user protection due to the interconnection and linkage structure among market participants," adding, "There needs to be revenue sharing based on value creation contributions and responsibility sharing for parts that undermine value."

Professor Shin Min-soo of Hanyang University's Business Administration Department diagnosed, "Since the telecommunications market has characteristics of a two-sided market, a structure should be created where CPs also bear indirect responsibility."

Currently, domestic content companies like Naver pay about 70 billion KRW (as of 2016) in network usage fees to telecom companies, but YouTube, Netflix, and others use their dominant position to pay zero won in network usage fees to telecom companies.

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