South Korea: ICT Sector Government Policy Changes For 2017

Last Updated: 25 January 2017
Article by Doil Son, Jai Wook Lee, Yong Yun, Seung Hyuck Han and Sun Hee Kim

Korea's key ICT-related agencies, the Ministry of Science, ICT and Future Planning, and the Korea Communications Commission, have adopted as a top priority plans to foster new industries in response to the Fourth Industrial Revolution.

1. Ministry of Science, ICT and Future Planning

The Ministry of Science, ICT and Future Planning announced their2017 goal as "leading the development of an information society through science, technology, and ICT innovation."To achieve its goal, the Ministry announced the following four strategies:(1)consolidation of the startup ecosystem;(2) strengthening of R&D capabilities;(3) creation of new industries"and services through integration and innovation; and(4) intelligent informatization to pre-emptively address the coming challenges of the Fourth Industrial Revolution.

The Ministry announced plans topursue and tofund the following initiatives and programs to further these four strategies:

(1) Proliferation of Creative Economy through Consolidation of the Startup Ecosystem

  • Operate Future Technology Fund #1, #2 and #3 (total US$126million)
  • Establish "PanGyo Creative Economy Valley" as the center of global startup innovation

(2) Strengthening of R&D capabilities

  • Expand fundamental research by encouraging open public participation through competition(total US$741million)
  • Establish "The First Research Fund in My Life"(1,000 projects, US$25million)
  • Expand programming-focused universities (20) and programming-startup labs(17)

(3) Creation of New Industrie sand Services Through Integration and Innovation

  • Commercialization of future growth engines in 10 areas1, including smart cars, intelligent IoT, advanced functional drones, and others
  • Invest in new medicine (US$28million)and medical equipment(US$20 million)
  • Expand IoT networks by private investment; Establish pilot projects using commercial clouds for education, finance, medical areas by May.
  • Fund software companies (US$33million) and increase the Digital Content Fund (US$92million)
  • Accelerate space development, such as lunar exploration with NASA; and expand exports of Small and Medium Nuclear Power Reactors

(4) Intelligent Informatization to Preemptively Address the Fourth Industrial Revolution

  • Encourage more use of public data storage, to promote data distribution and utilization
  • Improving regulations of VR and O2O
  • Proliferation of intelligent fusion services in industries such as manufacturing, medical, public transportation, smart home and others
  • Establish nationwide intelligent information society

2. Korea Communications Commission

The Korea Communications Commission announced its vision as "achieving the status of a robust ICT country, trusted by the people."And it has announced the following plans: (1) promoting public-interest broadcasting;(2) creating a new broadcast-telecommunications market and making systemic  improvements;(3) realizing a safe and fair broadcast-telecommunications market; and(4) strengthening media capabilities to meetpeople's demands in the smart era.

The following describe some of the KCC's more specific plan.

Market Stimulation and Supporting Big Data Industry

Stimulation of broadcast content and advertising markets is expected to come through introduction of new broadcast services including a territorial UHDMMS channel, as well as deregulation of virtual indirect advertising. There are also plans to make the use of person allocation information more convenient by supporting de-identification of personal information and diversification of identity-verification measures, which may ease the burden on companies using such data.

Tightening Ex-Post Regulation of Fair Competition

Regulatory changes impacting broadcast-telecommunications convergence should also be noted. Relevant regulations will be reorganized in relation to VOD and OTT services, as well as new types of advertising, among others. There will also be stronger sanctions against unfair practices involving bundling broadcast and telecommunications services, FinTech and content-distribution services, and more, based on internet platform. Therefore, proactive compliance with the relevant laws should receive careful attention. In particular, thorough compliance review of newly prohibited acts in the Telecommunications Business Act, including restrictions on non-essential preloaded apps, will be treated as a priority by regulatory agencies.

Changes in Telecommunications Market

In addition, if the legal cap on subsidies for purchasing a mobile device is removed in September this year pursuant to the Mobile Device Distribution Improvement Act, this will effect a considerable change in the broadcast & telecommunications markets. Therefore, careful monitoring of subsequent changes to the law is highly recommended.

3. Conclusion

The Ministry of Science, ICT and Future Planning and the Korea Communications Commission, the core agencies in the ICT sector, are planning to concentrate on fostering new industries using new technology, and they will implement plans for encouraging investment as well as deregulation which are likely to lead to the creation of a more business and investor-friendly environment. On the other hand, strict regulations to protect users and to promote fair competition will be pursued, so continuous monitoring of changes in regulatory policy will be required.

Originally published in ICT Legal Update January 2017

Footnote

1 5G mobile communication, wearable smart devices, IoT, intelligent Robot, advanced functional drones, big data, augmented contents, smart cars, intelligent semiconductor, and convergence material technology.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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