KT fined 500 million KRW over 'Internet Speed Reduction Controversy'... Introduction of Automatic Fee Reduction System (Comprehensive)

Ministry of Science and ICT and Korea Communications Commission Announce Joint Inspection Results of Ultra-High-Speed Internet Services

[Asia Economy Reporter Koo Eun-mo] IT YouTuber ‘Itsub’ sparked an issue regarding internet speed quality, resulting in KT being fined a total of 500 million KRW. KT also promised to improve its system to enhance internet quality service.

On the 21st, the Korea Communications Commission (KCC) held a plenary meeting and imposed a fine of 308 million KRW on KT for providing internet speeds lower than the originally contracted speeds. Additionally, KT was fined 192 million KRW for opening internet services without measuring speeds and despite falling below the minimum guaranteed speed.

Based on the fact-finding inspection and investigation results related to the quality degradation of KT’s 10-gigabit internet that occurred in April, the Ministry of Science and ICT and the KCC finalized and announced system improvements and corrective actions for violations of prohibited acts. The Ministry also conducted inspections on SK Broadband, SK Telecom, LG Uplus, and others. SK Telecom was included in the inspection as it handles the resale of SK Broadband products.

This inspection spread after the famous IT YouTuber ‘Itsub’ revealed on his YouTube channel on April 17 that the KT 10-gigabit internet service he used was actually provided at a speed of only 100 megabits per second (Mbps), which is 1/100th of the promised speed. The customer service’s unfriendly response, which seemed to shift the responsibility of speed measurement and faults onto customers, was also criticized. In response to these issues, authorities conducted a sample survey of all 10-gigabit internet subscribers (9,125 people) and some gigabit-level (maximum speed 1 gigabit, 500 megabits) product subscribers.

As a result of the investigation, the authorities stated, “We thoroughly inspected the entire process related to ultra-high-speed internet, including subscription application, activation, system operation, compensation procedures and standards, and customer management,” and “During this process, we found system improvement points and violations of prohibited acts.”

First, the KCC confirmed that in the case of Itsub, the speed degradation was caused by a configuration error resulting from KT managing the 10-gigabit internet service activation system manually. The KCC decided to impose a fine of 308 million KRW on KT, considering that KT’s poor management led to providing speeds lower than contracted and that restricting telecommunication service use without justifiable reason constitutes a violation of prohibited acts.

The Ministry of Science and ICT also stated that since speed degradation due to system configuration errors, as in Itsub’s case, can be pre-checked and managed by the service provider, the telecom companies will improve their systems so that even if users do not measure speeds separately, the telecom company will monitor daily and automatically reduce charges for affected customers upon detecting issues.

Automatic Fee Reduction Without Separate Application When Below Standard... Minimum Guaranteed Speed for 10-Gigabit Raised from 30% to 50%

Improvements related to compensation when speeds fall below the minimum guaranteed speed were also announced. First, the Ministry of Science and ICT decided to raise the minimum guaranteed speed for 10-gigabit internet to 50%. Currently, the minimum guaranteed speed for 10-gigabit internet products is about 30% of the maximum speed according to the terms of use, but it will be raised to 50%, similar to the standard for products under 1 gigabit.

Furthermore, when users measure speeds and find them below the standard, fees must be automatically reduced without a separate compensation application. The inspection found that KT, LG Uplus, and SK Telecom required users to apply separately for compensation after measuring speeds below the minimum speed to receive fee reductions for those days. KT and SK Broadband plan to implement automatic fee reduction systems by October, SK Telecom by November, and LG Uplus by December.

Currently, users must use the telecom company’s speed measurement server site to measure speeds, which requires searching on the telecom company’s homepage or entering a separate dedicated site address, causing inconvenience. To improve accessibility, each telecom company will add shortcut banners on their homepages. Additionally, the KCC ordered telecom companies to operate ‘Internet Speed Compensation Centers (tentative name)’ by the end of the year to actively support user compensation, including damage compensation.

Strengthening Notification of Minimum Speed Guarantee System at Subscription

Issues that may arise during the subscription and activation process of ultra-high-speed internet were also pointed out, and system improvements and corrective actions were requested. First, notification of the minimum speed guarantee system at subscription was strengthened. The Ministry of Science and ICT pointed out that although the minimum speed guarantee system is included in the subscription application terms of use, very few users are actually aware of it. To clearly notify users, the minimum speed guarantee system will be included in the main text of the subscription application, and users will be required to sign a confirmation. After activation, users will be notified via text message.

Improvements will also be made to product names and speed-related information provision in advertisements. The Ministry noted cases where products with maximum speeds of 2.5 gigabits or 5 gigabits were labeled as if they were 10-gigabit products, potentially misleading users about speeds. Such product names will be changed, and advertisements will clearly inform users of factors that may affect actual speeds.

Moreover, the KCC will regularly update the database of available products based on the user’s address. Although the telecom company’s system is set to prevent subscription applications for products unavailable at the user’s address, outdated databases could cause problems. Therefore, information on product availability by region will be continuously updated through field activation workers.

Regarding activation, sanctions will be imposed for cases where speeds are not measured during internet activation or where activation proceeds despite speeds falling below the minimum guaranteed speed. According to the Ministry and KCC, the investigation found several cases where speeds were not measured during activation or where measured speeds were below the minimum guaranteed speed stipulated in the terms of use.

The Ministry stated, “Speed measurement and notification at activation are important matters affecting user contracts, but failing to properly notify and activating services regardless constitutes a violation of prohibited acts.” KT was fined 192 million KRW and given corrective orders, while SK Broadband, SK Telecom, and LG Uplus received corrective orders.

The Ministry of Science and ICT and the KCC will closely monitor the implementation of these system improvements and corrective actions for violations and cooperate closely between ministries. Han Sang-hyuk, Chairman of the KCC, said, “We will ensure that the improvements prepared through the inspection of the entire ultra-high-speed internet subscription and usage process are implemented and monitored without fail, and we will continuously strive to prevent inconveniences for the public using ultra-high-speed internet services.”

KT Announces Process Improvement Plan to Enhance Internet Quality

Immediately after the announcement of the inspection results, KT announced a plan to improve internet services to enhance the quality of ultra-high-speed internet, including 10-gigabit internet.

First, starting in August, KT will raise the ‘Minimum Guaranteed Speed (SLA)’ for all 10-gigabit internet products to 50%. Previously, the minimum guaranteed speed for 10-gigabit products was 3 gigabits, for 5-gigabit products 2.5 gigabits, and for 2.5-gigabit products 1 gigabit. The product naming system will also be reorganized focusing on maximum speeds to minimize user confusion.

To strengthen guidance on the minimum guaranteed speed, KT improved the system to provide detailed notification of the minimum speed guarantee system on subscription application forms and require user confirmation signatures. Additionally, speed-related information is emphasized at the bottom of the rate plan information page on the KT homepage. Furthermore, KT added a notification phrase about the minimum speed guarantee system (“According to the minimum speed guarantee system, compensation applications are possible if speeds fall below the minimum speed”) to text messages sent to customers who newly subscribe or change products.

KT is also promoting the introduction of an automatic fee reduction process. If a customer measures speed five times on the ‘Internet Quality Assurance Test Page’ on the KT homepage and three or more results fall below the minimum guaranteed communication speed for the product, the fee for that day will be reduced automatically, and the customer can simultaneously request an on-site inspection by an AS technician. This function is planned to be applied as early as October. Also, starting in October, if there is a discrepancy between the speed information of the service the customer subscribed to and the configuration values of KT’s internet equipment (system), KT’s inspection system will detect it first and automatically apply fee reductions.

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