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[Newsmaker] Data traffic costs spat hits Facebook in Korea

Facebook Korea said Thursday that it would comply with South Korea’s regulations over local network usage costs if new rules take effect, following clashes with a local telecom provider over sharing the costs of maintaining the quality and speed of its data traffic-heavy services.

“Facebook’s fundamental policy and philosophy is to sincerely comply with the local regulations of all of the countries that we operate in,” a Facebook Korea official told The Korea Herald.

“Should the Korean government devise new regulations regarding network usage costs for foreign companies, it is very likely that we will follow them,” he said.

Facebook also released a statement saying that it would continue to negotiate with Korean telecom companies so that it can provide optimal services to its users.

The conciliatory gestures came as the US social networking giant has been mired in a public dispute with SK Broadband over paying its share to local telecom providers for maintaining the heavy data traffic generated by Facebook’s activities.

The issue, which sparked an investigation from the state-run Korea Telecommunications Commission, emerged in December when SK Broadband subscribers began experiencing a slowdown in their Facebook connections as well as its photo-sharing app Instagram.

According to SK Broadband, there were initially two ways to connect to Facebook in Korea: via a direct connection to Facebook’s server in Hong Kong and via rerouting to a local cache server in Korea operated by local telecom provider KT.

The cache server is used to save online content locally in temporary storage, called a cache, and in turn improve local data speeds for connecting to foreign internet services. Facebook currently pays KT to use its cache server.

SK Broadband claimed that Facebook deliberately cut off its connection to KT’s cache server last December.

KT is the only Korean telecommunications firm that has set up a cache server for Facebook. Others, such as SK Broadband and LG UPlus, can therefore access Facebook’s content using KT’s network. SK Broadband argued that Facebook blocked SK Broadband users’ access to the KT network, diverting them to the slower Hong Kong server.

Facebook asserted that the cutoff was caused by changes in local telecom regulations governing rerouting arrangements, though SK Broadband said the new law affects only pricing.

Facebook also stated that to address the connection issue, it had suggested SK Broadband create its own local cache server, offering to pay for the server equipment and installation costs. However, negotiations were halted after the telecom provider asked Facebook to unilaterally pay for the costs of using and operating the server, it said.

Facebook Korea asserted that it is a content provider and therefore is not mandated to pay for such costs which remain in the realm of network providers.

The Korea Telecommunications Commission is planning to investigate whether Facebook Korea violated the national Telecommunications Business Act by deliberately changing the network router for SK Broadband.

The incident has ignited debate over net neutrality, a principle that internet service providers and governments should treat all the data on the internet in the same way without discriminating by user, content, website or platform.

The issue has become particularly salient in Korea, where foreign and local internet service providers are subject to differing regulations regarding network usage costs.

As the volume of Facebook’s data traffic continues to increase, largely due to the growing number of videos shared on the platform, local telecom providers are arguing that Facebook must bear the costs, saying major Korean internet content firms like Naver and Kakao pay fees proportionate to the amount of data their users consume.

Naver CEO Han Seong-sook on Wednesday urged the government to devise a uniform regulation on the network cost issue, pointing to apparent discrimination between Korean and foreign companies. At the same time, she stressed the need to uphold the notion of net neutrality.

By Sohn Ji-young (