Korea blocking VoIP


The Korean government recently enacted legislation prohibiting voice over Internet protocol (VoIP) calls placed on Korean telecommunication networks.  The ban goes into effect in July nationwide.  As a result, thousands of people, including many American expatriates, will find that their VoIP service rendered useless, and they will have to either find a way (illegally) around the ban or pay for Korean phone service.  Needless to say, Korean telephone companies are very happy, and VoIP providers and customers are (or will be) incensed.
 
VoIP enables Internet telephony and allows companies such as Vonage and Skype to provide telephone service to customers over the Internet.  VoIP is increasingly popular.  Although the sound quality of VoIP can be spotty if the Internet connection is subpar, it is much cheaper to use VoIP than paying for traditional phone service.  If you have a computer with broadband Internet access, a microphone, and speaker, you can use VoIP at a marginal cost.  If you use Skype, you don’t need any additional equipment.  Vonage and other VoIP provide service using phone equipment that plug into your computer.  Telephone calls travel over broadband pipes via Internet backbone.  Global Internet broadband networks are very expensive to build and are owned primarily by traditional telecommunication companies such as Korea Telecom (KT) and Dacom, Korea’s two largest telephone companies. 
 
Therein lies the VoIP conflict–Korean telephone companies built and maintain the telecommunication networks over which VoIP calls travel.  Companies such as Skype do not pay telephone companies for the privilege of sending Internet calls over their networks–computer users pay subscription fees when they sign up for Internet broadband access.  If a computer user enables VoIP over the same broadband connection they use to access the Internet, they eliminate the need to purchase additional telephony service from telephone providers.  As a result, telephone companies understandably claim that they are losing out on millions of telephone subscribers who switched–or will switch–to using VoIP exclusively.  Sources say that starting July 1, Korean phone companies will block VoIP access in Korea by blocking any Internet connection using COM Port 2 (broadband connections use Port 1; VoIP uses Port 2).  Many users will bypass the blocking of Port 2 by plugging their VoIP and broadband connections into routers that use Port 1. 
 
While I understand the telephone companies’ need to receive fair compensation for VoIP calls placed over their networks, I believe the Korean government’s action is short-sighted.  First, this regulatory action falls squarely in favor of the Korean telephone duopoly, KT and Dacom, at the expense of Korean consumers.  Korea often favors Korean conglomerates such as KT at the expense of consumers, stifling competition.  Secondly, Korea prides itself on being a hotbed of cutting-edge technology.  VoIP is on the bleeding edge of technological innovation.  Korea cannot stop the advance of VoIP as a worldwide telephony standard.  Korea may now be at the cutting edge of wireless and Internet technology, but its action effectively shuts Korea out of the next wave of telecommunication advances.  Much as the U.S. is criticized for missing out on stem cell research by banning the harvesting of embryonic stem cells, Korea is really missing the technology boat by banning VoIP.  Thirdly, KT and Dacom customers placing international phone calls inevitably use telecommunication networks outside of Korean telecommunication networks.  Essentially, KT and Dacom customers use foreign phone lines for free without paying compensatory surcharges.  It would not be beyond a begrieved VoIP company to prompt the U.S. or another nation to take Korea to the World Trade Organization for unfairly subsidizing Korean telecommunication companies by blocking VoIP.  Whether it will happen remains to be seen.
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One thought on “Korea blocking VoIP

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