KCC swayed by mobile carriers

The nation's top telecommunication regulator is facing strong protest from consumers for taking the side of mobile carriers on the issue of network neutrality with little consideration for the general good of consumers.
The Korea Communications Commission (KCC) has announced that it will allow domestic mobile carriers ― SK Telecom, KT and LG Uplus ― to charge users to access mobile voice over Internet protocol (mVoIP) recently launched by Kakao Talk.

KCC Chairman Lee Kye-cheol

Telecom regulator’s biased stance causes consumer discomfort

By Cho Mu-hyun

The nation’s top telecommunications regulator is facing protests from consumers for taking the side of mobile carriers on the issue of network neutrality.

The Korea Communications Commission (KCC) has announced that it will allow domestic mobile carriers — SK Telecom, KT and LG Uplus — to charge users to access mobile voice over on Internet protocol (mVoIP) recently launched by Kakao Talk.

The government agency has received heavy criticism by consumers for its passive reaction to the recent dispute between Kakao Talk and telecommunications companies, and generally taking the side of the latter.

Many speculate that there is a subtle “understanding” between the KCC and mobile companies, with the two parties sharing a general interest in charging consumers for using mVoIP.

“The KCC and telecommunications firms need each other. The KCC supports telecommunication companies in policy concerning investments in building networks, while in return firms keep to prices to set by the KCC,” Kim Hong-seek, analyst at NH Securities, said over the phone.

Kim says the KCC needs to keep mobile carriers “happy” as the government agency needs them continuously investing on network building and management for second and third generation networks.

“If the KCC stops their support, the firms will argue that they are wasting billions of won in maintaining 3G networks. They will demand the agency to allow increasing its fees for voice calls, or canceling the unlimited call service provided for 3G to consumers. Regardless of whether this happens, in either case consumers will have to bear the burden of paying more,” said the analyst.

The current debate over network use involves the KCC, mobile carriers, content providers and consumers: the nation’s top telecom regulator is failing to satisfy any of the parties involved, says Kim.

Another expert in the area agrees that the KCC and mobile carriers are in bed together to keep fees high: “The recent overreaction of mobile carriers and the KCC acceptance of their pleas to allow for charging for using mVoIP is a way for companies to keep voice call charges high,” said Lee Seoung-ju, head of Mobile Monday’s Seoul chapter.

“Mobile firms can use mVoIP as an excuse to say that their profitability is being chipped away, and the KCC will rather allow them to charge for use of mVoIP instead of facing an increase in fees for voice calls, which will be even harder for them to avoid heat from consumers.”

Lee added that whatever the two parties agree to in the end, it will be phone users who will likely pay more for using networks.

However, a top level official of the KCC says the government’s main reason of restricting networks instead of totally opening them is to protect domestic businesses from other more powerful international firms, such as Microsoft and Google.

“Those companies that argue for network neutrality are constantly citing the freedom of consumer choices, which is only a limited view on the issue,” he said. “Companies such as Kakao Talk may seem invincible right now, but precedent says otherwise.”

“In the case of restricting mVoIP, it is the Untied States that is mostly calling for opening network use, while Europe, like us, mostly limits access to mVoIP or charges for using services like Skype. The reason is simple: most firms just can’t withstand industry giants that are usually based in the United States.”

The official says the KCC has a big responsibility as the regulator to consider interests of not just content providers or telecommunication companies, but the future of the whole market.

An analyst based in Seoul, who declined to be named, called the argument “nonsensical,” and commented that the KCC and the firms are just buying time to see returns on their long cooperation and investments in building 3G networks.

“Network neutrality will eventually happen, and the barrage of excuses by the KCC and mobile carriers are just ways to buy time until a complete LTE (long-term evolution) network is set so that they can secure another, steady revenue pipeline,” said the analyst.

“The KCC will continue to support mobile carriers because the government agency needs them constantly to work on building networks for the nation to maintain its ‘IT forerunner’ image.

“More importantly, the government must consider handset makers such as Samsung (Electronics) who depend largely on testing it with new handsets on built-in domestic networks. No one else besides the mobile carriers have the know-how or money to build networks, so it is important for the government to keep their interest as priority over the average users’.

“It is deeply regrettable that no one is considering the billions of won that mobile carriers have invested on building networks that content providers use,” said a high-level SK Telecom official.

“We have to see the larger picture of the greater good of the current ecosystem in the long term, instead of these shorthanded outburst that only considers the immediate benefits.”

An office worker surnamed Park, working in the domestic oil industry, says he “despises” mobile carriers and the KCC for blocking access to Kakao Talk.

“The mobile carriers, after receiving all that support by the KCC on building networks in policy, used the profits gained from it on further marketing its service instead of using it on strengthening its networks,” said Park. “Now they want to charge more. It is just a ridiculous example of corporate greed.”

impale@koreatimes.co.kr