Lawmakers on Wednesday demanded an overhaul of a controversial telecommunications bill that has fueled public criticism since its enactment on Oct. 1.
Amendments to the so-called Distribution of Telecommunications Devices Act aimed to reform an overheated mobile device market. Extreme competition among top mobile telecom companies had led to distorted marketing practices such as advertisements promoting misleading “free” contracts.
But the law has largely failed, lawmakers said during an interpellation session at the National Assembly earlier in the day, and demanded government officials to brainstorm a new solution.
Legislators cited increasing public antagonism against the reforms as prices of some mobile devices had gone up, while an incident last weekend intensified the widespread discontent.
Amendments to the telecommunications law had attempted to limit subsidies to mobile device consumers. Before, SK Telecom, KT, and LG Uplus ― the country’s three telecom behemoths ― had created a complicated system that offered different subsidies depending on the type of pay plan a customer purchased.
By equalizing the amount of subsidies each customer received, government officials hoped contracts on smartphones would become more transparent. Authorities also banned outright exaggerated ads pledging “free” phones.
Critics at the time said the new law could force all customers to pay a much higher price for new purchases on the latest mobile products as subsidies to them would be restricted. Experts had predicted that Apple’s iPhone 6 would go for around 600,000 won ($550) under the new regulations.
The worries proved to be true just past midnight Sunday when hundreds of consumers lined up at mobile device stores throughout Seoul to buy Apple’s iPhone 6. Rumors had spread in online communities that they could buy the latest iPhone for under 200,000 won.
SK Telecom, KT and LG Uplus had apparently outflanked the new restrictions by paying subsidies to customers using a “rebate plan” that had not been the subject of new legal bounds.
The thousands of customers who had purchased iPhones at much higher prices were “left in the cold,” critics said.
The three companies later issued apologies for the happening and vowed to prevent similar occurrences.
Lawmakers suggested solutions.
“Let’s create a fourth telecom company here in Korea,” said Rep. Woo Sang-ho of the main opposition party New Politics Alliance for Democracy said, in reference to the de facto oligopoly market structure.
The governing Saenuri Party’s Rep. Shim Jae-chul proposed doing away with the new subsidy limits, and creating a system of obligating companies to notify the Korea Communications Standards Commission of the exact subsidy amounts each customer paid.
By Jeong Hunny ()
koreaherald@heraldcorp.com
