In South Korea, network costs are a topic of discussion for Google and Netflix
The law reflects the European Union’s attempt to propose legislation to ensure that telecommunications infrastructure is partially financed by big technology companies in South Korea.
Seoul: South Korea’s parliament witnessed a heated debate on Friday over proposed legislation to make global content providers such as Netflix and Alphabet’s Google pay network fees in South Korea.
The deliberations reflect attempts in Europe by some countries that want the European Commission to propose legislation to ensure big tech companies can partly finance telecoms infrastructure while increasing streaming video and other data usage.
Various versions of the legislation have been proposed in South Korea to get companies to pay what proponents of the reform call a fair price.
The hearing is expected to conclude on Friday night, but the motion is still considered a long way from advancing to the next stage of the legislative process.
“Google and Netflix account for more than a third of domestic traffic… It is appropriate for global companies to review the issue more proactively,” lawmaker Hong Suk-Joon said during the hearing.
Others disagree, saying charging big tech companies could mean they could raise their own fees and undermine South Korean content creators.
“It threatens the collapse of local content providers while trying to protect a small number of local ISPs,” said Jong Chung-Rae, chairman of the parliamentary committee overseeing the issue.
Google’s YouTube campaigned against the bill, and more than 259,824 people signed a petition opposing the legislation, according to the activist group Obnet.
“It will be necessary to conduct a profound review of the way the business is run,” Kyung-Hoon Kim, head of Google in South Korea, told lawmakers, referring to what would happen if such legislation were introduced.
Liz Chung, a unit manager for Netflix in South Korea, said her company was looking for ways to deal with the surge in traffic.
“We are developing a series of technical measures to effectively harness networks and adequately respond to traffic growth,” Chung said. In Europe, significant telcos have welcomed regulators’ plans to make Google, Meta, and Netflix bear some of the costs of telecoms networks. Still, smaller companies have warned it would distort the telecoms market and harm competition.
Experts said building and maintaining undersea infrastructure and cables that transmit data from one place to another are expensive, and the wide spread of global video content has increased transmission costs for data stored offshore.
YouTube has 41.8 million active South Korean users out of a population of 51.6 million. According to data provider Mobile Index, they used YouTube for 1.38 billion hours in September.
Sweden’s Ericsson said in a June report that global mobile data traffic reached 67 exabytes per month by the end of 2021 and is expected to reach 282 exabytes in 2027. Video traffic accounts for about 69% of traffic and is expected to rise to 79% in 2027.
South Korean network provider SK Broadband went to court hoping to pay Big Tech a fee.
SK declined to comment.
“The legislation could have repercussions, including content providers passing costs on to end users,” said Kim Hyun Kyung, a Seoul National University of Science and Technology professor.
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