KT reviewing network fees on Youtube, Internet TVs

SEOUL Wed Feb 22, 2012 10:45pm EST

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SEOUL (Reuters) - South Korea's top Internet provider, KT Corp plans to charge data-heavy content providers such as Google's Youtube and Internet-enabled TV service operators to subsidize costly network upgrades, a KT executive said on Thursday.

KT fired its first salvo on "free riding" Internet services earlier this month by blocking access to certain TV applications offered by Samsung Electronics Co, the top manufacturer of Internet TVs, with the burgeoning TV industry set to generate profits from advertising and applications at the expense of heavy investments by network operators.

"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. They should pay for using our network," Kim Taehwan, vice president of KT's smart network policy task force, told Reuters in an interview.

"Payment could take various forms, from sharing a portion of advertisement revenues or profits to settling network usage fees. 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."

Such moves could have wider implications for the likes of Apple and Google, which are trying to replicate their enormous success in the smartphone market in the living room by offering services such as high-quality videos, movies, games and social networking via TVs.

"Once we set a rule with Samsung, we will apply it to other Internet TV operators, be it Apple or Google," Kim said.

Apple is in talks with Canada's two biggest telecom firms about launching iTV, a device combining the features of the wildly popular iPad tablet with those of a TV set, according to Canada's Globe and Mail.

Google is also preparing revamped Google TVs through alliances with firms such as LG Electronics Inc.

Telecoms operators, under growing pressure to upgrade their networks to support increasing data traffic, have already seen free Internet phone and text message services such as Kakaotalk and BlackBerry Messenger hit steady and superbly profitable sources of income.

Hardware manufacturers like Samsung, which hopes to build on its dominance of the TV market in the Internet TV segment, argue networks should not discriminate against content or services and that applications do not cause massive traffic slowdowns.

(Reporting by Miyoung Kim; Editing by Jonathan Hopfner)

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