> The story of South Korea’s settlement regime starts with one such cache offered by Facebook. Through peering arrangements amongst the largest ISPs (KT, SK Broadband, and LG Uplus), it enabled content that had previously been accessed over expensive transit links to Facebook’s server in, for example, Hong Kong, to now be accessed from Facebook’s cache in KTs network
> But in 2016 the Korean government implemented a set of amendments to its 2005 interconnection policy that fundamentally altered norms of voluntary negotiated interconnection by instead imposing a “sending party pays” regime. The critical piece of this change was to impose a “mutual settlement” requirement amongst same-tier operators, in which ISPs were required to compensate each other for traffic exchanged between them. Not long after, KT found themselves with large bills from the other two Tier-1 ISPs, asking for payment for the Facebook traffic that was sent from the cache in KTs network
> Faced with these claims for payment, now mandated under the new interconnection rules, KT sought to recoup these costs by instead charging Facebook for the traffic delivered from the cache. When negotiations between KT and Facebook failed, Facebook decided to disable its cache in KTs network, which meant that Korean users were instead routed to other caches overseas
> Due to this deteriorated service quality for connections to Facebook, KT made a claim to the regulator KCC that issued a fine against Facebook of USD $328,000 for deliberately disrupting its services
> While the story of Korea’s settlement regime is tied to the presence of large international content providers, it has been the domestic content providers that have borne the brunt of the impact. The 2016 rules that imposed a sender pays regime meant that hosting content in any of Korea’s networks became excessively expensive as the ISP would pass on costs to the content provider. While Facebook could simply disable its cache and route the traffic abroad when KT requested “network usage fees”, local content providers could not
https://www.internetsociety.org/blog/2022/09/sender-pays-wha...
> The story of South Korea’s settlement regime starts with one such cache offered by Facebook. Through peering arrangements amongst the largest ISPs (KT, SK Broadband, and LG Uplus), it enabled content that had previously been accessed over expensive transit links to Facebook’s server in, for example, Hong Kong, to now be accessed from Facebook’s cache in KTs network
> But in 2016 the Korean government implemented a set of amendments to its 2005 interconnection policy that fundamentally altered norms of voluntary negotiated interconnection by instead imposing a “sending party pays” regime. The critical piece of this change was to impose a “mutual settlement” requirement amongst same-tier operators, in which ISPs were required to compensate each other for traffic exchanged between them. Not long after, KT found themselves with large bills from the other two Tier-1 ISPs, asking for payment for the Facebook traffic that was sent from the cache in KTs network
> Faced with these claims for payment, now mandated under the new interconnection rules, KT sought to recoup these costs by instead charging Facebook for the traffic delivered from the cache. When negotiations between KT and Facebook failed, Facebook decided to disable its cache in KTs network, which meant that Korean users were instead routed to other caches overseas
> Due to this deteriorated service quality for connections to Facebook, KT made a claim to the regulator KCC that issued a fine against Facebook of USD $328,000 for deliberately disrupting its services
> While the story of Korea’s settlement regime is tied to the presence of large international content providers, it has been the domestic content providers that have borne the brunt of the impact. The 2016 rules that imposed a sender pays regime meant that hosting content in any of Korea’s networks became excessively expensive as the ISP would pass on costs to the content provider. While Facebook could simply disable its cache and route the traffic abroad when KT requested “network usage fees”, local content providers could not