TPRC 2024: The 52nd Research Conference on Communications, Information and Inter

Link to paper

Abstract:
The South Korea telecom services market reports annual revenues of $32 billion. The country is noted for market-based network usage fees in which content providers (both domestic and foreign) negotiate access to broadband networks. The magnitude and volume of such fees are not public, but news reports suggest they amount to less than 1 percent of the total market revenue. This paper investigates the size and volume of the network usage fee regime and impacts on related broadband and content markets. 

As usage fees have been place for some years in Korea, this paper reviews the development of the Korean broadband and content markets and whether changes can be observed after the introduction of usage fees to the industry structure, revenue, market size, concentration, penetration, technological development, and other variables. International comparisons are offered to see whether there are statistically significant differences in countries without formal usage fee regimes. 

Results are expected to be correlative, not causative. Theoretical modeling is explored in parallel to explore whether and how results could change under different circumstances.

A conceptual framework suggests expected relationship between variables and defines objectives for the research process. In this respect, the authors hypothesize that network usage fees have a neutral effect on the market, or at best positive. Alternative scenarios are explored, for example the refusal to supply by content providers and the lack of reinvestment of fees into the network. 

The paper explores other reasons why the Korean regime may be an appropriate model or not, for example, the discrete number of broadband providers, the presence of an authority to meter and publicize traffic levels, the ease of measurement of international traffic because of limited entry points to the country, policy orientation towards technological innovation, and so on. 

The paper is relevant for at least 4 themes promoted at TPRC52 including
• Broadband Deployment, Access and the Digital Divide, Criticality of Infrastructure
• Social Dimensions to Communications and Internet Policy
• Policies Governing the Digital Economy
• Geopolitics, Digital Sovereignty, and Tech Regulation.
Moreover, it offers new, original, and valuable data and analysis for policy scholars including a bibliography of Korean sources of information on usage fees translated and summarized for an English-speaking audience, a formal presentation of Korean content market development over the last decade and reference to international proceedings on the similar topic in other countries as appropriate. 

The paper offers a timely review of the small but emerging literature on the topic of network usage fees and interconnection and the significant literature in Korean on the nation’s broadband policy, which is not necessarily accessed by English language scholars. 
The work is significant because many nations consider whether and how to engage in such regimes and whether market-based or regulated approaches are superior. Proceedings have been undertaken or underway in USA, European Union, Brazil, among other regions.