5G and Net Neutrality: Controversy over Abolishment of Net Neutrality Stirred Up Ahead of 5G Commercialization | BusinessKorea

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Controversy over net neutrality is being reignited among telecom industry and platform operators ahead of the commercialization of 5G mobile telecommunication.
Controversy over net neutrality is being reignited among telecom industry and platform operators ahead of the commercialization of 5G mobile telecommunication.
Seoul, Korea
22 January 2018 - 9:30am
Cho Jin-young

Controversy over net neutrality is being reignited ahead of the commercialization of 5G mobile telecommunication which is the next generation wireless and wireless communication network. There is a sharp conflict of opinions on the matter between the telecom industry that insists that platform operators should share a burden of investment cost before making massive investment in 5G facilities and platform operators that strongly advocate the development of an autonomous Internet ecosystem.

According to the industry on January 21, with respect to net neutrality, there is a social consensus that technical traffic management to block certain users or access to contents and platforms or delay speeds of such contents and platforms. For example, if Carrier A delays the service speed of Platform Operator B, consumers and public opinions will blast Carrier A. Therefore, the telecom industry does not dispute net neutrality in terms of technology.

On the other hand, the telecom industry is insisting that considering an overload of mobile video traffic and a burden of 5G network investment, regulations on "economic traffic management" that charges additional fee on specific platforms be established. In particular, Korea’s three major mobile telecom carriers voiced their desire to vitalize 'zero rating' ahead of others in conjunction with the early commercialization of 5G.

The use of a zero rating-based service saves users a burden to pay data cost. This is because telecom companies or content providers (CP) pay data cost to mobile carriers instead of users. Currently, Naver, Google and YouTube among others earn huge profits through search advertising and ads at the beginning of mobile video play but data cost is borne by users. To play back high-quality videos in real time, huge networks of the three mobile carriers should support such video services. This is why controversy over the free use of such networks by platform operators such as CPs does not subside.

In this regard, "There are many cases where Korean portals and platform operators infringe on the interests of users and network operators amid net neutrality controversy,” Byun Jae-il, a lawmaker of the Minjoo Party and a member of the Science and Technology Information and Communication Committee at the National Assembly. “In particular, if foreign companies continue to use networks free of charge, it can crush network operators’ will to invest." The US Federal Communications Commission (FCC) decided to abolish the net neutrality principle due to a policy objective to encourage network operators to invest in networks.”

"Although telecom carriers and the Internet industry can give benefits to consumers by sharing network fees and lowering general rates for consumers, net neutrality impedes ties between the two groups for rating vitalization,” multiple telecom operators pointed out. Especially, as it is expected that a variety of services such as virtual reality (VR) and augmented reality (AR) based realistic media, connected cars, smart home, smart factory among others will use vast amounts of data with the advent of 5G commercialization in the first half of next year, there is a strong voice that regulations should be made to charge additional fees. "Naver, Google, Facebook and etc. strongly champion net neutrality that works for their interests, but they are quiet about app neutrality, search neutrality, and platform neutrality and discriminate against some contents to place contents in manners advantageous to them," claimed another representative of the telecom industry.

However, internet business operators are taking issue with this claim. "Now, every household is using high-speed broadband Internet services. The reason that they use the broadband Internet services is that they want to use Internet content services by Naver, Kakao and various start-ups," an internet industry official said. "If there is no contents service by internet business companies, how can telecom companies sell high-speed Internet services?"

This is a refutation that internet business operators are already contributing to telecom companies’ network business. Thanks to internet operators, telecom companies are recording strong sales in the network business. Nevertheless, internet business operators have been paying to operators for their services. Naver paid 73.4 billion won in network use fees in 2016 alone.

Zero rating which has recently surfaced should also be prohibited, Internet service providers say. Zero rating is a concept that internet business operators pay for users' data fees, which has no choice but to hamper innovative services of companies that lack funds such as start-ups. "If telecom carriers provide contents of their own companies or affiliated companies with zero rating, it can be a violation of the Fair Trade Act," said professor Park Kyung-shin at Law School of Korea University. “Even if it is not an affiliate issue, there is concern that large companies which already dominated the market may be on offensive in order to preclude start-ups which are their new competitors from growing."

In particular, Internet business operators are dissatisfied with issues such as the mitigation of net neutrality, the promotion of zero rating and the collection of money for the Broadcasting and Communication Development Fund. Some people are voicing that as the government put pressure on telecom companies to force the latter to cut rates, telecom companies are casting the burden of rate cuts on Internet business operators.

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