Sang-hee Kim Proposes 'Domestic Network Usage Fee Contract Avoidance Prevention Act'… "Netflix Should Not Be Ignored"

Kim Sang-hee, Deputy Speaker of the National Assembly. Photo by Dongju Yoon doso7@

[Asia Economy Reporter Eunmo Koo] As a follow-up measure to the recent controversy over the Netflix network usage fee dispute, a partial amendment bill to the Telecommunications Business Act, containing regulations on network usage fee contracts for overseas content providers (CPs), known as the 'Domestic Network Usage Fee Contract Evasion Prevention Act,' has been proposed in the National Assembly.

Kim Sang-hee, Deputy Speaker of the National Assembly (Science, Technology, Information and Broadcasting Communications Committee), announced on the 19th that she has taken the lead in proposing the partial amendment bill to the Telecommunications Business Act.

The bill includes the establishment of Article 34-3 (Conclusion of Information and Communication Network Service Use Contracts), which requires telecommunications business operators to conclude contracts upon request from other telecommunications business operators regarding the use and provision of information and communication networks.

Deputy Speaker Kim said, "Under the current law, there are no regulations concerning internet network usage contracts and payment, which clearly limits the regulation of disputes related to unfair practices or unjust enrichment that may occur during the process of network use and provision between operators. This amendment is expected to create a reasonable market environment without discrimination between domestic and foreign operators by stipulating network usage contract matters for operators above a certain standard."

According to data submitted by the Ministry of Science and ICT to Deputy Speaker Kim's office, the total domestic traffic volume in the past five years surged from 3.7 million TB (terabytes) in 2017 to 7.83 million TB in 2020, and it is estimated to reach 8.94 million TB this year following the same trend. Notably, as of the second quarter of this year, overseas operators accounted for 78.6% of the top 10 domestic traffic-generating sites, confirming that a significant portion of domestic traffic volume is generated overseas.

However, unlike domestic operators who have concluded network usage fee contracts, some overseas operators such as Netflix do not bear network usage fees and even neglect measures to maintain service quality.

Deputy Speaker Kim explained, "Domestic CPs like Naver and Kakao pay hundreds of billions of won annually in network usage fees and cooperate in stable network management and network expansion. In the absence of legal regulations, domestic CPs with weaker bargaining power compared to global CPs holding monopoly content such as Netflix and Google are placed in an unfair situation." She added, "Since this is a matter of interest to both ruling and opposition members of the Science and ICT Committee, I hope the bill will be reviewed promptly after its proposal."

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