(1) Reasons for Proposal
○ The Telecommunications Business Act was amended to introduce a telecommunications dispute resolution system and prohibit unjustified restrictions on deleting non-essential apps (to be enforced on June 12, 2019), and to prevent the distribution of information with obscene content by value-added telecommunications business operators and newly insert provisions on compensation for damage in the event of an interruption in telecommunications services (to be enforced on June 25, 2019). Accordingly, this Amendment prescribes matters delegated by the Act to the Presidential Decree to describe the enforcement in detail.

(2) Major Provisions
A. Introduce a telecommunications dispute resolution system (Articles 40-5 to 40-13 newly inserted)

○ Specify the composition and operation of the dispute resolution committee, procedures and methods for dispute resolution, and other matters delegated by the Act to the Presidential Decree
- Composition and operation of the telecommunications dispute resolution committee (Article 40-5)

 ※ Prescribe provisions on members (non-executive), the term of supplementary members (remaining term of predecessor), sub-committee composition, the convocation of meetings (when deemed necessary by the chairperson or requested by at least one-third of the registered members), and payment of allowances and travel expenses

- Applications for dispute resolution and supplementation of dispute resolution applications (Article 40-6, Article 40-8)

 ※ Prescribe grounds on which to request supplementation of applicant details (name and address of applicant and respondent, purpose of and reasons for the application etc.) and attached documents (documentary evidence) if necessary

- Selection of representatives (Article 40-7) and commencement of the dispute resolution procedure (Article 40-9)

 ※ Prescribe that up to three representatives shall be selected if a joint application is filed by multiple disputing persons, and that when an application for resolution is received, the procedure shall commence and the disputing persons shall be notified without delay

- Succession to disputing person status (Article 40-10) and hearing the opinions of the disputing persons, etc. (Article 40-11)

 ※ Prescribe provisions on succession to disputing person status (upon application) in the event of death, etc., and on requesting statements of opinion from persons involved in dispute resolution or stakeholders and their rights to attend and give statements

- Non-disclosure of the procedure (Article 40-12) and rules for operation (Article 40-13), etc.

※ Prescribe that matters concerning the dispute resolution procedure, non-disclosure of results (disclosure if necessary), and other matters necessary for the deliberation, composition, operation, etc., of the dispute resolution committee shall be as stipulated in detailed rules on operation prescribed by the dispute resolution committee

B. Modify provisions quoted in relation to the adjudication system (Article 40-2 amended)
○ Modify the phrase quoted (subparagraph 3) in Article 40-2 of the Enforcement Decree in accordance with the deletion of subparagraphs under Article 45 (Ruling by the Korea Communications Commission), paragraph 1 of the Telecommunications Business Act

- Modify “an application for adjudication under Article 45 (1) 3 of the Act” to read, “an application for adjudication concerning the implementation of an agreement on the provision of equipment and facilities, joint utilization, wholesale services, interconnection or joint-use services, provision of information, etc. or compensation for losses arising from the implementation of such agreement”

 C. Prescribe provisions on notifications in the event of an interruption in the provision of telecommunications services (Article 37-9 newly inserted)
○ Prescribe business operators who are obligated to notify users in the event of an interruption in the provision of telecommunications services and the content, method, etc., of notifications

- (Business operators subject to the obligation) ① Common telecommunications business operators, ② Business operators of clustered information and communications services, ③ Value-added telecommunications business operators with a sales turnover of not less than 1 trillion won in the previous year, sales turnover of not less than 10 billion won in telecommunications services in the previous year, or not less than 1 million users per day on average over a three-month period

- (Content) Immediately issue a notice on: ①The fact and causes of the interruption in service provision, ② Status of measures taken by the business operator, ③ Contact details of the department at which users may request advice, etc.

- (Method) At least one of email, text message, an announcement on the first page of the website operated by the business operator, or similar method

※ If facilities are difficult to use due to a fault, an announcement shall be made through news media, etc.

○ Prescribe the content, method, etc., of notifications for cases where users have been disadvantaged due to service interruption, fault, etc., lasting longer than the specified duration for damage compensation

- (Content) Issue a notice on the following matters within 14 days of the date on which service provision resumes or the cause of the fault has been resolved: ① Persons eligible to claim compensation for damages, ② Criteria for calculating the amount of damage compensation, ③ Damage compensation procedure and method

- (Method) Notify users individually by at least one of email, telephone, text message, post, or similar method

※ If a user’s contact details are unknown, allow the notification to be substituted by a website announcement (displayed for at least 30 days) or a notification in at least two general daily newspapers that are distributed nationwide

 D. Amend provisions on prohibited acts concerning unjustified restrictions on deleting non-essential apps (attached Tables 4 and 6 amended)

○ Delete provisions in the current Enforcement Decree ([Attached Table 4] Types of and Criteria for Prohibited Acts, subparagraph 5, G 3)* as they have been transferred to the Act (Article 50, paragraph 1, subparagraph 8** newly inserted)

* [Attached Table 4] Types of and Criteria for Prohibited Acts, subparagraph 5, G 3) The act of unjustly restricting the deletion of software that is not essential to the functioning of a telecommunications device; or installing, operating, or suggesting the installation or operation of software that unjustly restricts the installation of other software

** Article 50, paragraph 1 of the Telecommunications Business Act
8. The act of unjustly restricting the deletion of, or other equivalent action against, software that is not essential to the functioning of a communications terminal device, and the act of installing, operating, or suggesting the installation or operation of software that unjustly restricts the installation of other software

○ Add criteria for imposing penalty surcharges to “[Attached Table 6] Maximum Amounts and Calculation Criteria for Penalty Surcharges Imposed on Violations” in accordance with the newly inserted Article 50, paragraph 1, subparagraph 8 of the Act

- Prescribe that the maximum penalty surcharge shall be 1/100 of the sales turnover as formerly stipulated in the Enforcement Decree in relation to prohibited acts concerning non-essential apps

※ [Attached Table 6] Maximum Amounts and Calculation Criteria for Penalty Surcharges Imposed on Violations
1. Maximum penalty surcharges for violations
 B. Acts falling under Article 50, paragraph 1, subparagraphs 5, 5-2, or 8 of the Act: Up to 1/100 of the sales turnover under Article 47, paragraph 1

 E. Prescribe criteria for imposing administrative fines on violations of the Act (attached Table 11 amended)

○ Prescribe detailed criteria* in accordance with the imposition of an administrative fine of up to 20 million won in the event that a value-added telecommunications business operator, in violation of the obligation to prevent the distribution of photos or copies thereof under Article 14 of the Act on Special Cases Concerning the Punishment, etc., of Sexual Crimes, has failed to delete, block access to, or take other necessary measures to address the information concerned (attached Table 11 E amended)

 * [Attached Table 11] E. 7 million won for a first violation, 14 million won for a second violation, and 20 million for a third or subsequent violation

O Prescribe detailed criteria in accordance with the imposition of an administrative fine of up to 10 million won in the event that, in violation of Article 33 (Compensation for Losses), paragraph 2 of the Act, users are not notified of the fact of an interruption in the provision of telecommunications services* or the standards and procedures for damage compensation**, etc. (attached Table 11, M and N amended)

 * [Attached Table 11] M. : 3.5 million won for a first violation, 7 million won for a second violation, and 10 million won for a third or subsequent violation
** [Attached Table 11] N. : 10 million won for a first, second, or third violation

 F. Amend the Enforcement Decree in accordance with the relaxation of entry regulations (integration of common and special category telecommunications business operators) (attached Tables 4 and 5-2 amended)

○ In accordance with the integration of special category telecommunications businesses and common telecommunications businesses (special category telecommunications businesses abolished), integrate and modify provisions on special category telecommunications business operators in the “Types of and Criteria for Prohibited Acts (attached Table 4)” and “Criteria for Partial Business Suspension Orders for Telecommunications Business Operators (attached Table 5-2)” to instead address common telecommunications business operators