Principle of Net Neutrality is Losing Its Ground

Global Internet companies have underpaid for communication networks and paid little taxes in view of their sales in South Korea unlike local Internet companies, whose business has been hindered by so many lopsided regulations, according to industry sources. These days, however, calls are growing for a level playing ground.

The same demand is being witnessed in the United States, too. Since the inauguration of the Trump administration, the Federal Communications Commission (FCC) has come up with policy to impose accurate calculated network costs on Internet firms. At the same time, the so-called Google tax is becoming increasingly persuasive as a way of preventing their tax avoidance.

What the U.S. government aims to do is abolish the principle of net neutrality, which was established in the previous Obama administration. The principle can be defined as a ban on discrimination against any content transmitted via the networks of operators such as cable TV companies and telecom operators. Internet content providers like portals and video service providers were relatively free from network charges and the companies including Apple, Google and Facebook were able to maximize their international influence with ease thanks to the principle.

Things have changed in the Trump administration though. The FCC recently remarked that net neutrality is a mistake which has resulted in a decline in investment in broadband networks, promising that the FCC will prepare investment recovery measures so that a shift to 5G can be accelerated. The FCC recently took its first step to this end by excluding Internet service providers from Title II, which means telecom operators, cable TV companies and the like can provide fast lanes for content providers paying more than the others and call for those causing excessive data traffic to share network costs. The final voting for this issue is scheduled for late this year.

This change is already in progress in many European countries. They are in favor of the principle of net neutrality and allowing telecom operators at the same time to manage data traffic in a reasonable way, examples of which include the above-mentioned fast lane provided in return for additional payment.

The U.S. and Europe are increasingly advocating the Google tax as well. Britain, which adopted this tax for the first time in the world two years ago, collected 130 million pounds in back taxes from Google in January last year. More recently, Google said that it would pay 306 million euros in 10-year back taxes to the Italian government. Australia is planning to adopt the Google tax in July this year so that intentionally diverted profits are subject to a tax rate of 40%, 10 percentage points higher than its corporate tax rate.

Also in progress are regulations and inspections regarding the preloading of Android apps by Google and information monopoly based on connection between the information collected online by U.S.-based giants like Google and Facebook and their online ad sales.