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ICT Ministry proposes lowering exchange fees

Dec 23,2019
The Ministry of Science and ICT on Sunday announced a proposal aimed at lowering traffic exchange fees that internet service providers pay one another for interconnecting their networks.

The revision makes it unnecessary for major internet service providers - KT, SK Broadband and LG U+ - to pay each other expenses for exchanging traffic if the exchange rate is below a certain level.

The interconnection system is how network providers connect their communication networks to exchange traffic. Based on the system, users of a particular internet service provider are able to communicate with those who use other services.

In 2016, the government revised the system that forced network providers to pay expenses for the exchange of traffic, although there was no such charge before. The expenses are seen to have imposed a financial burden on content providers like Naver, Facebook and Kakao who have been arguing that the government revise the system. Facebook even changed an access route due to the costs.

Since the exchange expenses were high, network providers have been passive about securing content providers.

The increased traffic derived from the wide array of services offered by various content providers resulted in internet service providers imposing the financial burden of maintaining the networks onto the companies.

The revision is seen as an effort to give network providers the ability to attract content providers without being concerned about the traffic exchange fees. This is expected to give internet service providers more of an incentive to encourage domestic firms to create new types of content that involves innovative virtual reality and augmented reality technologies.

The access communication rates that smaller network providers like Sejong Telecom pay to major network providers will also be reduced.

The current annual rate is 13.4 percent. It will be lowered by 30 percent at most.

But if business operators agree to terms, the rate could be set up differently.

“The latest revision is an outcome derived from opinions of not just internet service providers but also from people engaged in the internet ecosystem,” said a spokesperson for the ministry. “[The ministry] will continue to invest efforts to enable people engaged in the internet-related services to see growth based on Korea’s strength of boasting the world’s best networks.”

BY JIN MIN-JI [jin.minji@joongang.co.kr]