Facebook vows smooth negotiations with Korean ISPs over data traffic costs

Facebook said Thursday that it has expressed to South Korea’s state media regulator its willingness to carry out smooth negotiations with local internet service providers over sharing the costs of maintaining the quality and speed of Facebook’s data traffic-heavy services.

Kevin Martin, vice president for mobile and global access policy at Facebook, met with Korea Communications Commission Chairman Lee Hyo-seong on Wednesday to discuss current issues concerning Facebook Korea and the broader internet communications sector here.

Since 2016, the US social networking giant has been mired in a dispute with SK Broadband and LG Uplus over network usage fees. The row deepened when Facebook refused to pay for operating a new cache server -- used to save online content locally in a temporary storage called a cache -- that would improve the connection speed to Facebook and its photo-sharing app Instagram.

The spat triggered controversy over the fairness of Korea’s regulations, under which Korean internet firms like Naver pay local ISPs network usage fees proportionate to the scale of their services while foreign players are not held to the same standards.

The KCC chairman urged Facebook to pay network usage fees that are proportionate to the amount of traffic generated by its services. Martin said Facebook is aware of the current situation and that it respects the regulator’s request to resolve the data traffic costs issue.

In addition, Martin reaffirmed Facebook’s pledge to start properly reporting taxes to the Korean government, in line with its newly adopted tax policy under which the company will pay taxes in the country where sales are made, instead of booking all revenue in Ireland.

As part of its push to contribute to Korea’s ICT ecosystem, Facebook also revealed plans to work with the Ministry of Science and ICT to build a new tech innovation lab in Pangyo, Gyeonggi Province, in the first quarter.

The upcoming center will support the development of next-generation technologies including augmented reality and virtual reality, and support Korean startups specializing in these fields, among other plans, according to Facebook Korea.

“Equipped with cutting-edge ICT infrastructure, South Korea is an extremely important market for Facebook. We will continue to work toward revitalizing Korea’s ICT businesses and improving its internet ecosystem,” Martin said. 

By Sohn Ji-young (jys@heraldcorp.com)