On December 5th, Twitch announced it would exit South Korea in February 2024. Since the country is the birthplace of esports, Twitch’s decision has a highly symbolic relevance as it highlights the difficulties for foreign content providers to run a profitable business in the country. In particular, Twitch executives designated bandwidth usage costs as the main cause to explain their fate. According to public statements, network fees are 10 times higher in South Korea than in the other countries where Twitch operates, thus totally hampering any hope of profitability. The debate around network fees has been a major bone of contention between Internet Service Providers (ISPs) and Content Providers (CPs) over the last years. The emergence of video streaming has challenged their networks’ capacity, thus prompting telecom operators to invest heavily in cutting-edge innovations. As a consequence, major digital services such as YouTube or Netflix have been targeted and pressured to compensate for their heavy traffic consumption share. They fought back arguing that such enforcements would damage net neutrality, which refers to the equal treatment of all CPs by ISPs. So far, regulators and telecom operators have struggled to obtain financial compensation from major CPs. Against this backdrop, the exit of Twitch from South Korea might reveal some conditions under which network operators have the upper hand over CPs. What makes South Korea such a particular country? To what extent is its model replicable? Principles of the broadband deployment policy in South Korea In the telecommunications sector, the South Korean authorities have steadily promoted competition and committed to universal access to infrastructures at affordable prices. Their two-pronged approach has constantly aimed at delivering a quality service to end-users. Many programs have been launched and funded by the government over the past decades, both on its own and as public private partnerships (PPP). In the 1990s, the new Korean Information Infrastructure Government program set a roadmap for the transition from copper to fiber lines and was backed by an initial public investment worth $620 million. In 2020, the Covid-19 pandemic prompted the government to launch a program to guarantee universal access to broadband speed of over 100Mbps. It also pushed for broadband rollout in rural areas, through the Rural Broadband Convergence Network Project from 2010 to 2017 and then through the Rural Broadband Project Public Private Partnership from 2020 to 2022. In parallel, it made sure the chaebols did not concentrate too much market share. These are local conglomerates, and played a huge role in the country’s economic development in the second half of the 20th century. In the telecommunications sector, the two chaebols are SK Group and LG Group. South Korean authorities curtailed their influence several times in favor of...
