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[Newsmaker] YouTube threatens to cut down investments in Korea over ‘network usage fee’ bill

Proposed revisions will require global content providers to pay network fees to local Internet service providers

The YouTube logo at the YouTube Space LA in Los Angeles on October 21, 2015. (Reuters-Yonhap)
The YouTube logo at the YouTube Space LA in Los Angeles on October 21, 2015. (Reuters-Yonhap)
For the first time, YouTube has openly expressed concerns over the South Korean parliament’s push for global content providers to foot the bill for creating excessive network traffic.

Gautam Anand, Vice President and Managing Director at Google’s YouTube Asia Pacific, wrote on Wednesday on the official YouTube Korea blog that if the revisions are enacted, it could “undermine YouTube’s opportunity to make continuous investments for Korean creators to be successful.”

The planned revision to the Telecommunications Business Act -- also known as the ‘network usage fee’ bills -- would require global content providers to sign mandatory contracts with local Internet service providers such as KT and SK Broadband to standardize obligations to pay fees for using their networks. Korean content providers, such as Naver and Kakao, have already been paying such costs here.

SK Broadband and Netflix are undergoing a legal battle over whether the streaming platform should pay usage costs for causing heavy network traffic.

Ananda noted that the proposed bill would essentially make Internet service providers double-charge users and video streaming platform companies like YouTube, while providing the same network services.

“If the revisions are passed, YouTube will shoulder enormous additional costs. The additional costs that may result from the proposed amendments will have a direct impact on YouTube’s local businesses,” he said.

Referring to Oxford Economics’ report in 2021, the head of YouTube Asia Pacific pointed out that YouTube’s creator community generated 1.6 trillion won ($1.3 billion) for the Korean economy and created over 86,000 jobs in 2020. Such figures stemmed from YouTube’s partner program, which handed over half of its profits to Korean creators, he added.

Anand urged the National Assembly to thoroughly review the revisions, as YouTube wishes to continue investing in the country’s creator ecosystem. He added that YouTube was willing to sit down with lawmakers.

“Through meeting with the lawmakers, YouTube will try to explain how the legislation currently being discussed will result in YouTube’s businesses in Korea and further affect the Korean creator community,” he said.

According to the global video platform giant, there were 600 Korean YouTube channels with over 1 million subscribers and some 6,500 Korean accounts with over 100,000 subscribers as of June 2021.

Rep. Jun Hye-sook, one of the lawmakers who proposed the network usage fee bill, said, “According to a survey, over 70 percent of Koreans think foreign companies should pay network fees in the country.”

“(The proposed revisions) will play a role in making foreign companies, which generate a lot of profit by causing heavy network traffic in Korea, pay a proper amount in network fees,” she said.

The network usage fee bill is being reviewed by the National Assembly’s Science, ICT, Broadcasting and Communications Committee’s subcommittee. Debate over the contentious bill is likely to continue into incoming President Yoon Suk-yeol’s term, which starts on May 10.

By Kan Hyeong-woo (hwkan@heraldcorp.com)
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