Right now in America, there is an ongoing war over something called “network neutrality”, where one can download and view anything, anywhere on the internet that is publicly available without paying extra “access fees”. Some providers in the states (AT&T and various cable thieves companies) propose having one pay for quicker delivery of mail to certain addresses or having the subscriber pay to view videos, which in effect is like a installing a toll road where one did not exist before. Well now Korea is first in the world again in that one ISP, Powercomm.com (LG) has “decided their three million customers may not watch video from HanaTV, a competitor”, blocking them from accessing the service. To quote boingboing.net:
The ISP in question runs a broadband video service that is being creamed by a competing Internet service. In order to “compete” better with the winning player, they simply cut off access to it for their customers, saying “IPTV is a broadcasting, not a telecommunications service.
One can only wonder just how long before the prolonged sucking sound of Powercomm users abandoning Powercomm begins. This is the first large-scale “breach of network neutrality” yet. For those that may want more background on network neutrality, please read this as a start.
I also note that HanaTV (Hanaro) is “controlled by U.S. investors AIG and Newbridge, while Goldman Sachs and Bill Kennard’s Carlyle Group have been investing in (other) Korean cable companies”.
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Currently, Hanaro, Powercomm, and the giant KT are classified as Internet Service Providers (ISPs) and all are barred from broadcasting TV signals on their networks, despite Hanaro and Powercomm having the physical infrastucture to easily do so.. Hence, Hanaro’s IP-based on-demand Hana TV to create an additional revenue stream. It works very much like TV, but isn’t broadcast TV.
This service is also very bandwidth-hungry. Each TV channel (and hence, each viewer) consumes up to 3Mbit/s in the downstream and up to 75Kbit/s in the upstream, even if the users are watching the same TV program. It doesn’t take many concurrent users to consume the bandwidth in a given area, thus destroying statistical multiplexing models for getting the most bangs for the bits out of one’s network.
So, Powercomm’s response is predictable.
Besides that, most ISPs like Hanaro and Powercomm regularly rate-limit the downloading of popular web streams, such as large sporting events, to limit the impact on their networks.
There’s a lot of bandwidth in Korea, aye, but it’s not infinite.
The real problem here is that the Ministry of Information and Communication (MIC) is control-freaky — like so many other Korean government agencies. Television, especially digital television, is just bits and the ISPs are just pipes to deliver bits. There is no good reason to limit the distribution of video-program data — or voice data — by telecom ISPs, cable-modem ISPs, terrestrial broadcasters or the phone companies, except to protect certain competitors from competition.
I wouldn’t be surprised, though, to find out that Powercomm was merely responding to an MIC instruction to shut out HanaTV. And yes, part of the problem is the foreign investment in Hanaro Telecom and the annoying tendency of foreign-invested companies not to roll over under pressure from regulatory agencies — annoyingly, these foreigners want to see the law that’s supposedly being enforced, and want to see it enforced on domestic competitors as well.
The MIC does some bad things, yes, but this particular one is actually keeping the market somewhat competitive. If KT could offer the “triple play” of data, voice, AND video, the SOs, MSOs, and even ISPs would be crushed. The Korean telco/ISP market would then be boiled down to a single giant company (KT) and consumers would have no choice.
Already, MSO, SO, and ISP subscriber rates are going down while KT’s is going up, especially after the introduction of its 100Mbit FTTH Internet service.
Unless the MIC or some other regulatory agency steps in, KT will have a virtual monopoly on Internet, voice, and video in Seoul in 5 years.
From what I know, the MIC is not nearly as control-freaky as the Korea Broadcasting Commission. They are the ones preventing IPTV from taking off here. The MIC is mostly concerned about hardware… what companies do with the hardware is up to them. The KBC, however, loves to regulate content. So if anyone is pressuring Powercomm, I would bet the KBC is the more likely culprit.
Btw, in parts of the country, HanaTV is giving away set-top boxes so users can give the service a try. My friend has it and hates it. Hates the lack of selection.
In the USA, sports has been the major driver of HD cable. Why are Korea’s sports channels so bass-ackward? Lousy content (unless you love baseball, pro wrestling and golf).
I am not a tech person. I have watched on C-Span once or twice where different “experts”, spokesmen, and lawyers for the different sides debated each other — to me it was like being on a jury and hearing two sets of well-paid “expert” witnesses - they cancelled each other out.
I don’t really buy the bandwidth usage argument, however, because I assume the technology is goin gto continue to improve in leaps as it has since I got my first Commadore 64 and hooked up to Q-link over the phone. Also, around the world, the availability of internet access is going to continue to increase exponentiually (sp?) and put pressure on usage anyway. ——
so technology will either keep up with the pace of demand - or demand will slow things down - regardless of whether governments and companies move to satiate their blood-sucking vampireish need for more and more money or not.
And it is also inevitable that the blood suckers were going to sink their teeth into this huge cash cow.
The balance has always been between how much revenue growth (whether for the company and the state and the nation) greater consumer access via the internet and the growth in small and new businesses would bring —-
—- and how much revenue growth could be made by forcing users to pay more.
It seems we are finally getting into the time period in which big players are deciding that the growth in money flowing to them via the freedom of access is not good enough compared to the huge blood vein waiting to be sucked by making more and more things on the internet cost money to see or download.
It is inevitable. It always has been.
The only hope is somehow there will be enough rogue players out there with enough internet infrastructure and newer and newer and advancing technology to allow those who want to skirt the system to do so —— kind of like the nations who set up their banking system so mafia and rich people hiding money from the internal revenue services can clear their money and store it.
I just hope the areas of internet lawlessness aren’t accessible by only the rich and powerful (like that) too.
Brendon, it’s Dana (khs 87). Send me your new email.
Sorry to interrupt. Thanks.
Powercomm has set up a firewall that blocks some foreign websites that cater to South Koreans. You’ll get an official looking notice if you try to access any of these sites. Some of them are pornographic sites, but others are businesses that offer everyday products at highly competitive prices. Two of these websites, speedns.com and mass119.com (although they aren’t blocked anymore), sell sports supplements and vitamins. If you’ve ever bought domestically produced or imported sports supplements in Korea, you’d understand why unscrupulous businessmen would want to eliminate that competition.
…although I have no way of verifying this, the reason I think some pages may have been blocked due to the actions of unscrupulous businessmen is that the notice you get when you try to access blocked site provides a list of phone numbers that users can call to ‘inform’ on sites. The system is obviously open for abuse.
or rather, open to abuse…although ‘open for abuse’ seems fitting, somehow.
Dana, I done told you, girl, that ain’t my baby!
Carlyle Group:
Is this the evil Carlyle group that Bush belongs to?
The references to Goldman Sachs and Carlyle may not be entirely apt. AIG et al indeed have a controlling interest in Hanaro - over 30% of shares, seats on the board, etc. Goldman Sachs tends to act more like a ‘market maker’ in Korea. That is, they’ll hold a small pile of stocks in their own account, and stand ready any time to buy more of those same stocks if the price is low enough, or sell if it’s high enough. They do deal in KT stocks, but it’s probably not an ‘investment’ in KT any more than a grocer has invested in the food on his store shelf. Today, in fact, GS is the top seller of KT stock. Carlyle, as a private equity group, has different motivations. They rely on acquiring large stakes in companies and gaining managemet control, a strategy that is often nimbler when devouring small and mid-size companies. I don’t know of any evidence that Carlyle is trying to swallow a fish as big as KT or Dacom.
What Powercomm’s gambit does show off quite nicely is the fundamental difference between Korean (LG in this case) and foreign management motivations. Foreigners just want to make a profit, Koreans just want market share.
The internet’s dead.
I remember a couple of years ago that any e-mail sent to Hanmail, on which,of course, because it name instills national pride in all its users,nearly all Koreans had,would bounce back if you sent the mail from Hotmail of any other mail.
Korea and Koreans,yeesh.