Proposal for ICT and Internet Ecosystem

["Park Cheolhong" <cheolhong.park@xxx>]

Proposal for ICT and Internet Ecosystem :

Setting New Rules on Trade Order

 

Background

1- Advancement in Internet Ecosystem

There is a growing need to squarely face the changing ICT and Internet ecosystem and to explore ways to improve total ICT ecosystem (C-P-N-D; Contents-Platform-Network-Device).

 

2- Changing Trend

Changing paradigm in Internet usage pattern from web/text based to video consumption led to sudden spike in video traffic and number of heavy users

 

According to Cisco, video is expected to consume 91% of the global traffic by 2014. Multimedia traffic becomes more dominant in both fixed and mobile, accounting for around 70% and 53% respectively.

 

The growth in mobile traffic is much faster than the increase in the number of subscription. In fixed service, the subscription increased only about 25% for the past 6 years from 6.28million to 7.82 million, meanwhile the traffic increased by 550% from 380Gbps to 2,090Gbps. Situation is even worse with the mobile service. The subscription increase is minimal compared to the 2009 level (annual growth of 5%), but the traffic increased by 153 folds due to the introduction of flat rate.

 

In the fixed service, 5% of all users account for 55% of all traffic while in mobile 5% consumes 50% of total traffic causing inconvenience for many other users.

 

Increase in ‘Over-the-Top (OTT)’ service providers, who utilize the network without sharing the burden of investment, deteriorates the profitability of carriers..

 

3-‘Beneficiary/Traffic Generator Pays’ Principle

Service providers who profits through using the fixed/mobile network and in the process generates huge traffic, should bear their fair share of the cost.

 

Service providers who generate traffic on the network (Traffic Generator Pays Principle) or those who engage in profit business using the network (Beneficiary Pays Principle) should pay the due compensation for their network usage.

 

Only such improvement in the trade order can prevent the tragedy of the commons and promote advancement in the ICT ecosystem and its virtuous cycle.

 

Discussion

1- Reasonable Management of Massive Traffic

Network traffic requires reasonable and transparent management when it is suspected that massive traffic from, for example, P2P and smart TV cause serious network congestion.

 

2- Reasonable Management of High-Frequency Traffic

Out of concerns for a possible blackout from high-frequency traffic including signaling, reasonable network management may also be necessary.

3-Standardization of Mobile Traffic

Traffic standard may be necessary to establish an order in massive mobile traffic so that majority of users can enjoy quality Internet access.

 

Standardization should be encouraged to prevent social cost from incurring in the mobile environment. As mobile network has limited resources, contents with excessive bandwidth may require significant increase in network cost.

 

There is a need to reflect on a certain level of traffic trade order considering the network and contents conditions.

 

4-Managed Service Encouraged

By actively developing premium services of enhanced QoS, different service levels based on values of traffic can be made available.

 

Appropriate QoS and pricing policy will lay the foundation for differential services for different values of network and traffic. Such services can be provided through commercial contracts with providers.

 

Conclusion

1-Win-Win Model for ICT Ecosystem

All the interested parties are encouraged to promote virtuous development in the ICT ecosystem by exploring a mutually beneficial model.

 

2-Win-Win Structure for ICT Industry

 

 

By Hyosil, Kim

Hyosil, Kim is the Executive Vice President of Network Value Enhancement Task Force in KT corp. KT (Korea Telecom) is the Korea’s No.1 telecommunication operator in fixed and mobile lines.