English Translation of MP KIM Youngshik’s Bill on “Network Usage Fee”

Proposed Amendment to the Telecommunications Business Act (“TBA”)

(Proposed by Assemblyman Young-sik Kim)

 

 

No. of Proposal: 11519            Date of Proposal: July 15, 2021

 

Sponsors: Assemblymen Young-sik Kim, Hee-kuk Kim                      Jong-seong Lee, Moo-kyung Han, Byung-wook Kim,

Jung-jae Kim, Sung-joong Park, Il-jun Seo, Jakeun Ku,

Sung-won Kim, and Yong-ho Tae

(11 persons)

 

 

Reasons for the Proposal and Key Details

 

As the services of large content providers such as Google and Netflix account for more than 30% of domestic Internet traffic, their influence on the domestic Internet network environments is increasing day by day.  However, despite the fact that these large content providers use the networks established by domestic Internet service providers to provide their services to consumers, they refuse to pay just consideration for their network use based on their overwhelming market power.

 

When large content providers unilaterally refuse to pay the fair network usage fee, there is an issue that the costs they have to bear are passed on to other general content providers or users. This may also decrease incentives of other domestic Internet providers for network investment and expansion and disrupt the normal network construction, thereby giving rise to a risk of deterioration of the overall Internet network environments.

 

In this regard, the court recently confirmed that (1) content providers use the networks of Internet service providers and are being provided with Internet access service, and (2) Internet access service provided through such network use is considered paid service (Decision No. 2020Kahap533643).

 

Given the foregoing court decision, the proposed amendment seeks to establish the legitimate order in the domestic network environments and prevent the issue of unreasonably passing on costs to other value-added service providers or users by prohibiting the act of value-added service providers under Article 22-7 of the TBA not paying just consideration of the network configuration and traffic volume necessary for the provision of Internet access service, despite the fact that such value-added service providers are being provided with Internet access service by using the network of facilities-based service providers (Article 50 (1) 6 of the proposed amendment).

 

 

New/Current Provision Comparison Table

 

Current Provision

Proposed Amendment

Article 50 (Prohibited Acts)(1) No telecommunications business operator may commit any of the following acts (hereinafter referred to as “prohibited acts”) which undermine or are feared to undermine fair competition or users’ interests, or allow other telecommunications business operators or third parties to commit such acts. 1. – 5-2. (omitted)<new provision>                     6. – 8. (omitted)   (2), (3) (omitted)

Article 50 (Prohibited Acts)(1)       1. – 5-2. (same as the current TBA) 6. The act of value-added service providers under Article 22-7 of the Telecommunications Business Act being provided or requesting the provision of Internet access service without paying just consideration in light of the configuration of the network used for the provision of Internet access service, traffic volume and other matters to be determined by the Presidential Decree.   7. – 9. (same as 6. – 8. of the current TBA)   (2), (3) (omitted)

 

<Existing provisions>

Article 2 (Definitions)

The terms used in this Act shall be defined as follows:

11. The term “facilities-based telecommunications service” means any telecommunications service for transmitting or receiving voice, data, images, etc. without any change in the form or details thereof and for leasing telecommunications line equipment to enable transmission or reception of voice, data, images, etc., such as telephone services or Internet services: Provided, That this shall not include telecommunications services (referring to detailed independent services among telecommunications services provided under subparagraph 6; hereinafter the same shall apply) determined and publicly notified by the Minister of Science and ICT;
12. The term “value-added telecommunications service” means any telecommunications service, other than facilities-based telecommunications services;

Article 22-7 (Service Stabilization by Value Added Telecommunication Business) Value added telecommunication business meeting the requirement of the number of users and the amount of traffic set forth by Presidential Decree shall take necessary measures set forth by Presidential Decree such as service stabilization, end-user request resolution, etc., in order to provide convenient and stable telecommunication services to the end-users.

Article 50 (Prohibited Acts)

(1) No telecommunications business operator may engage in any of the following conduct (hereinafter referred to as “prohibited acts”) which undermine or are likely to undermine fair competition or users’ interests, or allow other telecommunications business operators or third parties to engage in such conduct: <Amended by Act No. 13823, Jan. 27, 2016; Act No. 15858, Dec. 11, 2018>

1. Placing unfair or discriminative conditions or restrictions on the provision of equipment, etc., joint utilization, joint use, interconnection or joint-use services, wholesale services, provision of information, etc.;
2. Unfairly refusing to conclude an agreement on the provision of equipment, etc., joint utilization, joint use, interconnection or joint-use services, wholesale services, provision of information, etc. or failing to implement a concluded agreement without good cause;
3. Misusing the information of other telecommunications business operators that he or she has obtained in the course of the provision of equipment, etc., joint utilization, joint use, interconnection or joint-use services, wholesale services, provision of information, etc., for his or her business operations;
   4. Computing telecommunications service charges or the prices for the provision of equipment, etc., joint utilization, joint use, interconnection or joint-use services, wholesale services, provision of information, etc., by unfairly itemizing the expenses or revenues;
4. Providing telecommunications services in a manner different from the terms and conditions of use (limited to the terms and conditions of use reported or authorized under Article 28 (1) and (2)), or in a manner which substantially undermines telecommunications users’ interests;

5-2. Telecommunications business operators’ failing to explain or notify users about important matters, such as service charges, terms and conditions of a contract, and discount of service charges, or their false explanation or notification;

6. Determining and maintaining the prices for the provision of equipment, etc., joint utilization, joint use, interconnection or joint-use services, wholesale services, provision of information, etc., which are unfairly higher than the supply prices;
7. Refusing or restricting appropriate profit sharing when trading digital content through telecommunications services using the frequencies allocated under the Radio Waves Act; 8. Unfairly restricting measures to delete any software unessential to implementing functions of a communications terminal device or measures equivalent thereto; or installing and operating or suggesting any software that unfairly restricts the installation of other software.