hankyoreh

Facebook has agreed to operate cache servers installed at SK Broadband (SKB) and to pay related network fees. It already operates such servers at KT. This is expected to speed up Facebook service and content usage for SKB-based businesses, which have complained about the slow loading time.

Cache servers provide a way to speed up internet usage by copying frequently used services and content onto servers installed at an internet service provider’s internet data centers, which are directly accessed by users. Prior to this, Facebook has only operated cache servers at KT, while SKB and LGU+ have had to access Facebook servers in other countries nearby South Korea, such as Hong Kong and Japan.

On Jan. 27, sources in the industry told the Hankyoreh that Facebook recently reached a deal with SKB after nearly two years of negotiations about the conditions for operating cache servers. Facebook will be installing and operating cache servers at SKB’s data center. The contract will reportedly run for two years with an automatic two-year extension if neither side raises objections at least one month before the contract ends. The contract apparently includes the rental fee for the space that will hold the cache servers and will have Facebook cover part of the interconnectivity fee that SKB pays KT, with the exact amount depending on traffic by Facebook users.

But the specifics of the deal, including the amount of the fees, haven’t been made public. Because of a confidentiality clause in the contract, the two companies are refusing to officially confirm not only the details of the negotiations but even the fact that a deal was reached. A spokesperson for SKB said that the company “could not confirm anything.” A spokesperson for Facebook was likewise unable to confirm anything “until the two sides have completed their agreed-upon procedure for going public with the fact that a deal was reached in the negotiations.”

“There have been some inaccuracies in coverage by the press, but since we can’t confirm anything according to the confidentiality terms, we aren’t even able to request corrections,” the spokesperson explained.

Facebook reportedly initiated the negotiations after concluding that it should install and operate cache servers at SKB so as to provide reliable service not only to KT users but also to SKB users. On Sunday, a spokesperson for Facebook said the company was also in talks with LGU+ about operating cache servers there.

From late 2016 until early 2017, Facebook abruptly changed SKB users’ Facebook access route from the KT cache servers they had been using to internet connection points in places such as Hong Kong and Japan, resulting in a slowdown in service. In Mar. 2018, the Korea Communications Commission concluded that South Korean users had been disadvantaged by the unilateral change of connection routes and ordered the company to adjust its policy and pay a fine of 396 million won (US$353,790). At the time, Facebook explained that it had been responding to a spike in traffic and changes in interconnectivity standards.

Facebook’s decision is bringing fresh attention to the policies of Google and Netflix. Just like Facebook, these companies have also operated cache servers or in talks about installing them only at certain telecoms. The three major global service providers are Google, Facebook and Netflix; they control 50% of internet traffic in South Korea, and their share is projected to increase to 70% in 2021. But these companies are widely accused of exploiting their brand power by forcing domestic internet service providers to shoulder the cost of operating cache servers.

Since Facebook and SKB aren’t publishing the outcome of their negotiations about operating cache servers, the controversy about reverse discrimination against domestic business operators is expected to continue. Naver and other companies have argued that internet service providers allow Google, Facebook and other global companies to run cache servers for a bargain while charging huge amounts to domestic companies, which they describe as reverse discrimination. This also became an issue during last year’s parliamentary audit.　

By Kim Jae-seob, staff reporter

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