In a parable I worked up in 2012, I speculated on the possibilities of joint ventures between Internet companies such as Facebook and the last-mile access companies to enhance the user experience. Some details of a dispute in South Korea shed light on the problem:
According to SKB, there were initially two ways to connect to Facebook in Korea: via a direct connection to Facebook’s server in Hong Kong and via rerouting to a local cache server in Korea operated by local telecom provider KT.
The cache server is used to save online content locally in temporary storage, called a cache, and in turn improve the connection speed for accessing foreign internet services. Facebook currently pays KT to use its cache server.
SKB argued that Facebook deliberately cut off its link to KT’s faster cache server last December and has since been clashing over network maintenance issues.
KT is currently the only Korean telecom firm that has set up a cache server for Facebook. Others, such as SKB and LG Uplus, have been accessing Facebook’s content using KT’s network. SKB has argued that Facebook blocked SKB from KT’s cache server, diverting its users to the slower Hong Kong server.
To improve the slow connection, Facebook said it had suggested SKB create its own cache server, offering to pay for the server installation costs only. However, negotiations were halted after the telecom provider asked Facebook to pay for the costs of operating the server.
Facebook Korea asserted that it is a content provider and therefore is not mandated to pay for such costs which remain in the realm of network providers. SKB has argued otherwise.