Yoon Young-chan Targets 'Netflix Law'... Science and ICT Minister Denies Reverse Discrimination Controversy

[Image source=Yonhap News]

[Asia Economy Reporter Seulgina Jo] A controversy over reverse discrimination is emerging surrounding the enforcement decree of the so-called "Netflix Free Riding Prevention Act (Amendment to the Telecommunications Business Act)," which imposes an obligation on global content providers (CPs) such as Netflix to maintain the quality of domestic telecommunications networks. When Yoon Young-chan, a member of the Democratic Party and former vice president of Naver, criticized that "it will end up imposing the obligation of network usage stability only on domestic value-added telecommunications service providers," Minister Choi Ki-young of the Ministry of Science and ICT drew a line by saying, "It will help resolve issues when problems arise with overseas operators."

Minister Choi responded to questions about the effectiveness and reverse discrimination criticisms of the enforcement decree of the amended Telecommunications Business Act at the Science, Technology, Information and Broadcasting and Communications Committee plenary session held at the National Assembly on the 8th.

The amendment to the enforcement decree of the Telecommunications Business Act, which the Ministry of Science and ICT plans to announce for legislative notice on the 9th, mainly imposes an obligation to maintain network quality on value-added telecommunications service providers with an average daily user count of over 1 million and accounting for more than 1% of domestic total traffic. The target companies are announced annually, and under current standards, Google, Netflix, Facebook, Kakao, and Naver are included.

However, after the enforcement decree was made public, controversies over its effectiveness against overseas operators have continued, raising concerns that it will become a reverse discrimination regulation that only hinders domestic operators. This amendment was triggered by the previous controversy over Netflix's free riding on networks, but Naver and Kakao, which have paid hundreds of millions of won in network fees domestically, have also been included on the list.

On the same day, Representative Yoon Young-chan strongly criticized, "It is difficult to monitor and supervise the implementation process for overseas telecommunications operators, while it is very easy for domestic operators," adding, "Ultimately, the obligation for service stability is being shifted to domestic operators."

On the other hand, Minister Choi said, "Related data (to verify the obligation to secure stability) can be requested from overseas operators," and "because they are required to have domestic agents," drawing a line on the effectiveness and reverse discrimination controversy.

He answered, "The reason the enforcement decree was issued is because of Netflix and Facebook," and "Looking at the past, there have been no major problems for domestic operators. It will help take measures to resolve issues through domestic agents when problems occur with overseas operators." He also mentioned, "We gathered experts and operated a research group," and "We sufficiently listened to industry opinions."

Previously, Facebook was fined by the Korea Communications Commission for arbitrarily changing connection routes with SK Telecom, SK Broadband, and LG Uplus in March 2018, causing user connection delays. However, Facebook filed a lawsuit against this, and the first trial court ruled in favor of Facebook. The Korea Communications Commission immediately appealed. The Ministry of Science and ICT reportedly sought to supplement legislative gaps such as those concerning traffic route changes in this enforcement decree, considering that the court ruling at the time cited the absence of legislative precedents.

The Korea Internet Corporations Association, which includes Naver and Kakao, called for a full review of the enforcement decree on the same day. In a statement, the association criticized, "It is ambiguous and arbitrary whether the total traffic used as the denominator for the 1% standard refers to the actual traffic communicated or the traffic held by telecommunications companies." Some analysts suggest that the 1% standard including Naver and Kakao was set because if only U.S. companies were targeted, trade friction might occur.

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