updated 06:10 am EST, Thu February 23, 2012
Leading Korean ISP KT set to charge content makers
KT, Korea’s top ISP may set a precedent for charging data-heavy content providers including Google’s YouTube and other Internet-enabled service operators including charging Apple, should it move forward with launching a rumored smart TV and back it up with content delivery services through iTunes and other apps. According to Reuters, while the company already charges heavy-end users for downloading content, they argue that services such as YouTube are ‘free riding’ on ISPs who have to foot the bill for heavy infrastructure investment.
‘We want to set a rule that we can equally apply to every platform operator that offers data-heavy content as those services threaten to black out our network,’ said Kim Taehwan, a KT VP. ‘They should pay for using our network.’
The company has initiated its plan by targeting certain Samsung smart TV applications, which has already been profiting by offering Internet-connected TV hardware. Rather than raise the concept for discussion, KT has blocked some of Samsung’s smart TV apps, forcing the company to come to the negotiating table with a view to sharing the in profit generated through advertising revenue.
‘Payment could take various forms, from sharing a portion of advertisement revenues or profits to settling network usage fees,’ added Taehwan.’We are open to discussing that and are focusing our efforts on Internet TVs for a start before broadening our target to other data-heavy services such as YouTube.’
ISPs around the globe will be watching the developments in South Korea with interest. If KT is successful in playing its hand, ISPs who provide the critical infrastructure that make these services possible could be set to find two new and significant revenue streams – one from Internet-based content providers, and one from hardware manufacturers profiting by offering the same Internet-based services on their smart TV platforms.