Kim Young-sik Proposes 'Internet Network Free-Riding Prevention Act' to Block Second Netflix

Global IT Giants Account for 30% of Traffic
Do Not Pay Fair Network Usage Fees
Concerns Over Burden Shifted to Small and Medium CPs and Consumers

[Asia Economy Reporter Cha Min-young] As traffic from non-face-to-face services such as Over-The-Top (OTT) platforms rapidly increases, disputes related to network usage fees have also risen. In particular, there are criticisms that a few IT giants like Google and Netflix, which account for more than 30% of domestic internet traffic, do not pay fair network usage fees, leading to the proposal of the so-called 'Internet Network Free Riding Prevention Act' to prevent this.

On the 15th, Kim Young-sik, a member of the People Power Party, officially proposed an amendment to the Telecommunications Business Act that focuses on introducing a 'reasonable network usage fee payment obligation' for large content providers (CPs).

The amendment defines as prohibited acts the demands for network connection or provision without paying fair compensation, considering the network configuration and traffic volume, when value-added telecommunications service providers above a certain scale use internet networks to provide their services.

Recently, amid changes centered on non-face-to-face services, the impact of large CPs on network usage environments has increased, but there are criticisms that they do not pay fair fees. In fact, Google, Netflix, and others account for more than 30% of total domestic internet traffic. According to a report by the Ministry of Science and ICT research team last year, Google accounts for about 23.5%, Netflix 5%, and Facebook 4%, totaling approximately 32.5%. This is ten times the traffic volume of Naver and Kakao.

Rep. Kim Young-sik said, “If global companies refuse to pay network usage fees commensurate with the scale of traffic they generate, the costs they should bear will inevitably be passed on to other small and medium CPs and general consumers,” adding, “This reduces incentives for domestic Internet Service Providers (ISPs) to upgrade infrastructure and disrupts maintenance of internet networks, ultimately risking the overall deterioration of the ICT environment.”

He also drew attention to the court ruling on the lawsuit between Netflix and SK Broadband in June. Netflix lost the first trial in the declaratory judgment lawsuit it filed against SK Broadband. The court did not accept Netflix’s claim that it had 'no obligation to pay' in the dispute over usage fees. This is significant as the 'first' judicial ruling distinguishing roles and responsibilities between CPs and ISPs both domestically and internationally.

Rep. Kim emphasized, “It has been clearly established that CPs use the internet networks built by ISPs to provide service connections to users, and such network usage is subject to payment obligations,” adding, “In countries like the United States and France, network usage fees are paid, so the discriminatory practice of refusing to pay fees domestically must be promptly corrected.”

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