The Universal Basic Rate Plan Opposed Even by the Ruling Party... Parliamentary Struggles Expected

Ministry of Science and ICT Pushes for 20th National Assembly's Abandoned 'Universal Service Fee'
Criticism of "Hindering Market Competition" Even Within the Ruling Party

[Asia Economy Reporter Koo Chae-eun] The government is pushing to reintroduce the universal tariff bill, which was discarded during the 20th National Assembly, but opposition voices within the ruling party are growing, making difficulties expected. The universal tariff refers to the mandatory launch of mobile communication plans priced in the 20,000 KRW range by telecom operators to reduce the communication fee burden on low-income groups. However, even within the ruling party, there are criticisms that this is a regulation-centered idea that goes against market logic.

According to the telecommunications industry on the 3rd, the Ministry of Science and ICT, which proposed the 'universal tariff' bill in 2018 and submitted it to the 20th National Assembly but was ultimately discarded, announced its intention to re-push the bill with the opening of the 21st National Assembly, but opposition voices are also emerging within the ruling party.

A staff member from a ruling party lawmaker's office in the National Assembly's Science, ICT, Broadcasting and Communications Committee said, "There was criticism last National Assembly that the government should not directly intervene in lowering communication fees," adding, "It is a policy that directly contradicts MVNOs and the rate approval system, so it is viewed skeptically." MVNOs, which already aim for low-cost plans, have been launched, and the system where telecom operators receive government approval for rates has been abolished, so forcing a universal tariff is considered anachronistic.

Another ruling party lawmaker's office staff member criticized, "It seems the Ministry of Science and ICT is trying to strengthen regulatory authority through the universal tariff, which is a problematic idea." This expresses concern that the Ministry’s push for the universal tariff may act as market regulation contrary to its actual intent. A senior ruling party lawmaker’s aide pointed out, "It is a typical case of regulatory capture theory," indicating that the introduction of the universal tariff could hinder free market competition and innovation rather than provide social benefits.

The universal tariff refers to the policy where the Minister of Science and ICT sets the level of 'universal rates' every two years to allow citizens to use basic levels of voice and data services at reasonable rates so that mobile communication services can be used fairly and affordably. In 2017, the Ministry of Science and ICT proposed a basic plan for a universal tariff priced at 20,000 KRW per month (200 minutes of voice, 1GB of data), expanding data usage and voice call volume to a certain level to fulfill the Moon Jae-in administration’s pledge to reduce household communication costs.

If the law is amended to introduce the universal tariff, the Minister of Science and ICT can set new rate levels suitable for the current situation every two years through a 'notification,' but operators consider this clause a 'poison pill' that contradicts market competition principles. Although the Ministry of Science and ICT plans to push for the introduction of the universal tariff by amending the Telecommunications Business Act, opposition voices within the ruling party are growing, making difficulties inevitable during the legislative amendment process.

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