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March 29, 2024

Facebook mulls data center in Korea

PUBLISHED : June 23, 2017 - 14:19

UPDATED : June 23, 2017 - 14:35

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[THE INVESTOR] Social media giant Facebook is considering setting up a data center in Korea to help settle controversies over network neutrality, according to news reports on June 23.

“Mark Zuckerberg (Facebook chairman and CEO) has ordered two high-ranking executives to visit Seoul this month to review these plans,” an industry source was quoted by a local news outlet as saying.

“The proposed data center is part of Facebook’s efforts to solve the latest net neutrality issues.”




Facebook, which currently utilizes cache servers owned by KT, only pays the Korean telecom firm for cost of running them. A cache server is used for temporary storage of data to improve speed.

Other internet service providers -- including SK Broadband and LG Uplus -- get Facebook data stored in KT’s servers and offer them to their own subscribers, which consequently lets the US social media giant a free ride on their networks. Local internet firms such as Naver and Kakao, on the other hand, pay fees proportionate to the amount of data used by their respective users. There is no rule that requires content providers to pay the cost for network operation, so the cost-sharing scheme is negotiated between content providers and network firms.

Global social media giants like Facebook have been refusing to bear the cost of running their internet infrastructure, citing net neutrality, a concept calling for service providers to treat all data equally.

The growing data consumption, due largely to video content, requires network companies to upgrade their existing facilities, and the network firms are urging content providers to contribute for the upgrade.

In May, Facebook drew criticism for slowing down the connection speed of SK Broadband subscribers by diverting traffic to a slower server in Hong Kong. SK Broadband said Facebook had essentially opted to blackmail to keep free riding on network operators. The two sides have since been in talks to share costs for setting up a new cache server dedicated to Facebook services.

The Korea Communications Commission, local internet watchdog, is currently investigating the Facebook-SK Broadband case, and is expected to decide on penalties, if required.

By Kim Young-won (wone0102@heraldcorp.com)

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