Facebook agrees to pay network fees to SK
Netflix, Google pressed to follow suit
By Jun Ji-hye
Facebook has agreed with SK Broadband to pay for using the latter's internet networks to offer data traffic-heavy services to users in Korea, officials from the two companies said Sunday.
SK Broadband CEO Park Jung-ho
The agreement ended their dispute over how to share data traffic costs, which has lasted for about two years.
It marked the first time for the U.S. social networking giant to agree on cost-sharing with SK Broadband, an affiliate of the nation's top mobile carrier SK Telecom, to maintain its services since it entered the Korean market in 2010.
Facebook has paid network use fees to KT only, not to SK Broadband and LG Uplus.
Details of the contract such as period and how much Facebook will pay are unknown.
An official from SK Broadband said the two companies signed a confidentiality agreement.
An official from Facebook also refused to disclose any details.
Facebook Korea CEO Jung Ki-hyun
“Our users are our number one priority. We strive to provide optimal performance for all our users in Korea,” he said.
Industry sources noted the fees Facebook will pay would be similar to that paid by Korean content providers such as Naver and Kakao.
Naver and Kakao pay tens of billions of won to telecom companies annually for using their networks.
Facebook has also been in a dispute with LG Uplus, the smallest mobile carrier, as the U.S. firm has not paid for using its and SK's networks.
In 2016, Facebook was criticized for inconveniencing customers of SK Broadband and LG Uplus by randomly changing the path to access the social media platform.
At the time, suspicions were raised that the core reasons for this were conflicts between Facebook and the two telecom companies over fees.
On March 31 last year, the state-run Korea Communications Commission imposed a 396 million won ($353,000) fine on Facebook after conducting an inspection into complaints from users who suffered access speed slowdowns.
Regarding the issue, an official from LG Uplus said, “We are also conducting negotiations with Facebook on network use fees.
Officials at telecom companies here have complained that there are no clear standards for sharing data traffic costs with foreign players, although Korean internet service companies pay network use fees.
They said the agreement between Facebook and SK Broadband was meaningful as it would be a virtual guideline for future negotiations here involving the services of global giants such as Netflix and YouTube.