Guiding Regulation, South Korea

(As of 2017, South Korea had the fastest average internet connection in the world at 28.6 Mbit/s).

The last several months have been a lonely time for FCC Chairman and anti-net neutrality campaigner Ajit Pai. His one-man charm offensive has seen him emerge as the most prominent voice in favor of Net Neutrality repeal. But despite his best efforts, Pai seems genuinely surprised that both he and the recent repeal are incredibly unpopular.

The crux of Pai’s argument is that America lags behind comparable nations in digital infrastructure and already pays more for an inferior product. He claims that the repeal of Net Neutrality will reopen America’s internet and make us globally competitive again. However, results in countries such as Portugal and Guatemala that lack Net Neutrality protections undercut his point. The privileging of certain services (such as streaming sites and texting platforms) has seen the internet divided into ‘packages’ that consumers must pay separate fees to access. Not surprisingly this has resulted in higher bills and an increasingly segregated internet.

But that doesn’t mean it’s all doom and gloom outside the U.S. In fact, South Korea – home of the world’s best internet – takes a radically different approach than the one advocated by Pai. Encouraging for those who would like to see a meaningful change to America’s internet policy is the fact that Korea’s internet infrastructure was incubated through a series of market-friendly initiatives that sync up very well with what Pai and his fellow Republicans claim to want. Simply put, Korea has harnessed the potential of competition among private firms to drive down costs and improve overall service.

It all starts with choice. Most Americans only have a single internet service provider to choose from, and companies that enjoy lucrative local monopolies often spend more of their time trying to protect their status as the only game in town than on actually improving service. There is a reason Comcast and other ISPs consistently rank among America’s most unpopular corporations. In contrast, Korean consumers have access to multiple ISPs across the country. [..]

While private sector innovation has played a big role in making cheap, lightning fast internet available across South Korea, forward-thinking government policies have helped preserve these gains. It all dates back to Korea’s landmark  “Framework Act on Information Promotion” which was enacted in 1987 – well before the general public even knew what the internet was. This policy prioritized equal access for all citizens through generous subsidies designed to incentivize ISPs to serve communities across the country. Billions of dollars in low-interest loans and other aid packages have created tight bonds between the public and private sector, ensuring that ISPs are open to regulatory changes while also keeping government policy nimble enough to adapt to changing conditions.

One example of Korea’s savvy regulatory touch is the establishment of (relatively high) speed minimums in rural areas. These policies helped ensure that otherwise neglected communities received equal treatment by private enterprise. However, the regulations were paired with funding that allowed ISPs to lay the necessary infrastructure without incurring losses. Decades later, this legacy of smart planning and investments has resulted in a true win-win for consumers and businesses alike. Reliable public wi-fi is widely available – even in the subway. Now, the world’s first 5G network is even being rolled out for the upcoming Pyeongchang Olympic games.

It is here that Pai should look for inspiration in his bid to remake America’s internet. Korea has an ironclad Net Neutrality policy that ensures smaller sites enjoy the same privileges as its dominant portals. This fosters competition and keeps both ISPs and tech companies from becoming complacent. In addition, South Korea has taken steps to position itself as a start-up friendly economy, and its open, fair internet is key to this approach. The country’s net neutrality protections can best be viewed as a natural extension of the same competition-heavy philosophy that underscores its ISP regulations. This combination of efficient regulation in internet hardware and software has resulted in an end product that is head-and-shoulders above America’s scattershot internet.

By utilizing regulatory power to ensure competition and guarantee a rules-based digital ecosystem, South Korea has embraced a vision of government and corporate interests working in tandem that should make conservatives in America blush. Unfortunately, Pai has chosen to go in the opposite direction, opening up ground on the left to those calling for municipal broadband or even a nationalized internet that is treated as a public utility.

Instead of stifling competition and innovation through a series of reforms that will protect established ISPs and tech firms, Pai could achieve the impact he claims to want by creating a level playing field that gives startups an opportunity to disrupt the status quo. Many of Silicon Valley’s biggest names trace their origins to little more than a dimly lit garage and a few friends that shared a common vision. But the FCC’s Net Neutrality repeal threatens all that made this era of innovation possible. The public would be better served by an FCC that enhances competitiveness by following the South Korean blueprint.