G P R N 11-B551505-000008-10

[Naju Office] Korea Internet & Security Agency (KISA) 9 Jinheung-gil, Naju, Jeollanam-do, 93000 Republic of Korea (58324) TEL : 82-1544-5118 [Seoul Office] IT Venture Tower, 135 Jungdae-ro, Songpa-gu, Seoul, Korea, (05717) TEL : 82-2-405-5118

[Branch (Seocho Office)] Seocho-ro 398, Seocho-gu, Seoul, Korea (06619) TEL : 82-2-405-5118 9 791186 720066 www.kisa.or.kr ISBN 979-11-86720-06-6 Notes

The numbers in the tables of statistics are rounded; therefore, the totals indicated may differ the actual sum of all values.

The 2017 Korea Internet White Paper is a collection of the domestic and international issues and trends of 2016.

2017 Korea Internet White Paper | Message from the Publisher

“Faced with the transition to an intelligent information society, we must determine the direction of our distant future.”

Futurist Kurzweil predicted in his book Singularity is Near that by the "law of accelerating returns," there will be an exponential increase in the speed of development, and thus the speed of development in the 21st Century will be 1,000 times that of the 20th Century. The incredible development speed can be experienced firsthand in our reality, beyond just theories in textbooks. Before we have even overcome from the shock of Alpha Go, which made us think "machines are better than humans," we are facing a more evolved Alpha Go and AI technology in our daily lives. We have gone from treating machines as something that provides assistance to humans to asking ourselves with fear: "In what area could humans possibly be better than machines?" The next 10 years will be a critical era to determining the survival and perpetuation of the human race for the next 100 years. As humans who will have to live in an intelligence information society where social and economic systems will be based on Artificial Intelligence instead of ICT in the near future, we must lay out our future directions before it is too late. As a measure to realize a humanistic intelligence information society, the Ministry of Science and ICT and Korea Internet & Security Agency have established and are carrying out tasks concerned with responsible technology, equal access, fair competition, information sovereignty, ethics and dignity, protection and utilization, and data protection/security management. The 2017 Internet White Paper, the 18th white paper from our institution, diagnoses the basic issues for the future internet era and goes through related policies and technical suggestions with the initiative of planning for a human-oriented future society. In particular, it goes into depths on industries of the future like artificial intelligence, block chain, etc. and it has strengthened its part on the economic and legal aspects such as improving regulations for the development of convergence industry. I trust that the white paper will serve its purpose as valuable material that helps with preparing the future, and that through this we can accelerate the growth of the national economy and become a central country of the Fourth Industrial Revolution. I express my gratitude to the writers, editors, and the related personnel who have given this white paper all their time and effort.

President of Korea Internet & Security Agency Kim Suck-hwan 2017 Korea Internet White Paper

Message from the Publisher 3 History of Internet in Korea 8 Infographic 12 Top 10 Internet News of 2016 18

Part 1 1. Internet Economy 30 A. Data Economy 30 Industry B. Platform Economy 31 C. Internet Startup 32 and Service 2. Internet Industry 34 A. Status of the Internet Industry 34 B. e-Payment Services 36 C. Financial Services 37 D. e-Commerce 38 E. O2O and Sharing Economy 40 F. Online Advertising 42 3. Internet Service Convergence 44 A. IoT 44 B. Cloud 44 C. Artificial Intelligence 46 D. Virtual Reality 47 4. Internet Information Service 50 A. Search Engine 50 B. Communications 51 C. Contents 54 D. Internet Media 64 E. Location Based Service (LBS) 65 F. Big Data Service 66 G. Mobile Application 68 5. Internet Service in the Public Sector 70 A. Services for the General Public 70 B. Services for the Private Sector 71

Part 2 1. Internet Usage 76 A. Individual and Household 76 Utilization B. Business 79 2. Internet Environment 80 A. Improving Internet Environment 80 B. Internet Culture 82 3. Internet Service Convergence 89 A. Data Protection 89 B. Personal Information Protection 91

Part 3 1. Internet Infrastructure 96 A. Backbone Network 96 Infrastructure B. Subscriber Networks 98 C. Research Networks 100 D. Next-Generation Internet 103 2. Internet Address Resource 105 A. IP Addresses and AS Numbers 105 B. Domain Names 106 C. Domain Name System (DNS) 107 3. Internet Technology 109 A. Standardization Trend 109 B. Authentication Technology 111 C. Certified e-Document Center and Certified Electronic Address 113 4. Legal System For Internet 115 A. Internet Promotion 115 B. General Information Protection 116 C. Personal Data Protection 118 D. User Protection 119 E. Internet Regulations 119

1. Internet Governance 124 Part 4 2. Cooperation on International Data Protection 126 International 3. Cooperation on Personal Data Protection 127 Cooperation 4. International Internet Status 129 A. Internet Usage 129 B. International Index Status 132

List of Major Internet-related Organizations 136 Appendix List of Domestic ISPs(as of March 2017) 138 Abbreviations 143 Organization Abbreviations 146 About the KISA 149 2017 Korea Internet White Paper | Table

[Table 1-1-1] Volume of Data Industry 31 Revenue of Online Comics Production and [Table 1-4-11] 62 Distribution Businesses AI Platforms by Top Three [Table 1-1-2] 32 Telecommunications Businesses [Table 1-4-12] Web-Drama Accumulative Ranking 63 Commercialization and Investment Result Permit Issued / Registration of Domestic [Table 1-1-3] 33 [Table 1-4-13] 66 of K-Global Startup LBS Providers (As of 2016) [Table 1-2-1] Classification of the Internet Industry 34 2016 Market Volume for Big Data [Table 1-4-14] 67 According to Market [Table 1-2-2] Revenue of Domestic Internet Industry 35 [Table 1-4-15] Revenue of Domestic App Market by Store 68 [Table 1-2-3] Revenue of Internet Base Industry 35 Internet Services for Enterprises in the [Table 1-2-4] Revenue of Internet Support Industry 35 [Table 1-5-1] 72 Public Sector [Table 1-2-5] Revenue of Internet Application Industry 36 Informatization for Marginalized Groups [Table 2-2-1] 83 [Table 1-2-6] 37 Compared to Average Citizens By Year Number of Users Registered at Internet [Table 2-2-2] Trend in Cyber Criminals 84 [Table 1-2-7] Banking of Financial Institutions (Based 38 Reviews by the Korea Communications on Year-end) [Table 2-2-3] 87 Commission Number of Uses Registered at Mobile [Table 1-2-8] 38 Detected Websites With Malicious Code Banking of Financial Institutions [Table 2-3-1] 90 By Year Volume of Online Shopping Transactions [Table 1-2-9] 39 Comparison Between BcN and Giga (2013∼2016) [Table 3-1-1] 99 Internet Service Volume of Retail Sales and Online [Table 1-2-10] 39 Number of Internet Addresses Per Shopping Transaction(2013~2016) [Table 3-2-1] 105 Country (as of 2017. 4) Counseling and Dispute Resolution of [Table 1-2-11] 40 Number of Registered National Domains e-Commerce by Year [Table 3-2-2] 107 (as of 2017. 5) [Table 1-2-12] Sharing Economy Service 42 Dispute Resolution Registered to Internet [Table 3-2-3] 107 Volume of Domestic Advertisement Address Dispute Resolution Committee [Table 1-2-13] 43 Market Main Activities of Internet-Realted ICT [Table 3-3-1] 110 Average Revenue Per Broadcasting Standardization Forum [Table 1-4-1] 55 Company and Employee (2014) [Table 3-3-2] Distribution of Alternative Means For RRN 112 Revenue of the Online Digital Market [Table 1-4-2] 56 Volume of e-Documents at the Certified within the Movie Industry [Table 3-3-3] 114 e-Document Center [Table 1-4-3] Domestic Animation Industry 57 Enactment and Revision of [Table 3-4-1] 115 Average Revenue of the Animation Internet-related Laws(2016. 1~2017. 3) [Table 1-4-4] Industry per Business and Employee (as 58 Revision Status and Major Points of the of 2015) "Act on Promotion of Information and Revenues of Online Music Distribution [Table 3-4-2] Communications Network Utilization and 117 [Table 1-4-5] 58 Businesses Information Protection, Etc." (2016~2017. [Table 1-4-6] Domestic Game Industry Status 59 5) Revenue per Business in the Game Internet Usage Rates and High-speed [Table 1-4-7] 60 [Table 4-4-1] 130 Industry Internet Subscription Rates [Table 1-4-8] Revenue of e-Learning Service Providers 61 [Table 4-4-2] Korea Ranking in ICT Related Index 132 ICT Development Index Ranking (based [Table 1-4-9] e-Learning by Consumers 61 [Table 4-4-3] 133 on the year presented) [Table 1-4-10] Domestic Comics Industry 62 2017 Korea Internet White Paper | Table

Rates of Recognition, Usage, and Usage Male/Female Internet Usage and User [Figure 1-2-1] 41 [Figure 2-1-3] 77 Intention for O2O Services Count (over 3 years old) First Plans for Cloud Development and Internet Usage and User Count By Age [Figure 1-3-1] 45 [Figure 2-1-4] 78 Public Tasks Group Global Artificial Intelligence Sales Average Hours of Internet Usage (for [Figure 1-3-2] 47 [Figure 2-1-5] 78 (2016~2025) people over 3 years old) [Figure 1-3-3] Domestic VR Market Outlook 48 [Figure 2-1-6] Household Internet Usage 79 QC Market Share of Domestic PC Search ActiveX Usage for Top 100 Domestic Web [Figure 1-4-1] 50 [Figure 2-2-1] 81 Engine Sites QC Market Share of Domestic Mobile Trend in Smartphone Addiction By Year [Figure 1-4-2] 51 [Figure 2-2-2] 85 Search Engine / Age Group [Figure 1-4-3] Weekly SNS Usage 52 Reports on Infringement of Personal [Figure 2-3-1] 92 Information [Figure 1-4-4] Weekly SNS Hours 52 Connection Network Structure by IX (as [Figure 1-4-5] Last Used Instant Messaging 53 [Figure 3-1-1] 97 of 2017. 5) Instant Messaging Age and Gender [Figure 1-4-6] 53 Number of Internet Users and Internet Demographic [Figure 4-4-1] 129 Usage Rates in the World E-mail Usage According to Age and [Figure 1-4-7] 54 [Figure 4-4-2] Internet Usage by Country 130 Gender Demographic Wired High-Speed Internet Subscribers [Figure 1-4-8] IPTV Subscribers (2009~2016) 64 [FIgure 4-4-3] per 100 People in OECD Member 131 [Figure 1-4-9] Domestic Big Data Market Volume 67 Countries (as of 2016. 6) [Figure 1-4-10] Installed Apps by Category (n=321) 69 Wireless High-Speed Internet Pattern in Internet Usage and Number of [Figure 4-4-4] Subscribers per 100 People in OECD 131 [Figure 2-1-1] 76 Internet Users (over 3 years old) Member Countries (as of 2016. 6) [Figure 2-1-2] Recent Internet Usage 77 Internet service was launched in Korea after the establishment of the History of System Development Network in 1982, and it rapidly grew in 1994 when it was commercialized. In 2013, the number of Internet users in Korea Internet in exceeded 40 million, and became the first country to launch WiBro and HSDPA commercial services. In 2016, Korea has announced the longterm Korea comprehensive plans of intelligence information society in response to the Fourth Industrial Revolution, and has taken a leap to becoming the world's best intelligence information powerhouse. 1981 1989

1981 ~ 1984 1985 ~ 1989

1982 1985 •Launched the first Internet service •Launched the email service in Korean Industry· • 1983 Launched the PC communication service [Dacoml] •Launched the first information search service 1987 Service • 1984 Launched the H-Mail service •Launched the first commercial email service •Launched the PC banking service [Dacom] 1988 •Launched a commercial PC communication service [Chollianl] •Launched a private bulletin board service [The FiRST] •Developed an antivirus software following the first virus [Brain] attack •Launched the EDI service [Dacoml]

1982 1985 •SDN [TCP/IP] established [Seoul National University - •Connected to the SDN-PACNET [Asia-Pacific Infrastructure Korea Institute of Electronic Technology] academic research network] 1983 1986 •Connected to SDN-EUNET/UUCPNET [Technical, •The first IP address [128.134.0.0] assigned in Korean academic information exchange network] •Introduced the Korean domain [.kr] •Launched the PSTN data service 1988 •Opened an overseas public data network •Connected to the SDN-MHSNET [academic network] 1984 1989 •Connected to SDN-CSNET [information science net- •Launched an educational network [KREN], and a work] research network [KREONet] •Opened the PSDN DACOM - Net for the first time •Established the SON-HANA network [Korea Telecom: KT]

1981 1985 •Korea Telecom was established •Established a promotion plan for the national Policy administration network 1982 •Korea Data Communication Corporation was •Held the first international computer network- established related conference [PCCS) •Established the first basic plan for administrative 1986 computerization •Enacted the Act on the Expansion and Promotion of the Use of the Information and Communication 1983 Network •Enacted the Framework Act on Telecommunications [used the term 'information communication' for the 1987 first time] •The Korea Computerization Agency was launched •Established the business plan for the key national •Established the first basic plan for the key national network project network 1984 •Formed the computer network mediation committee •Formed the key national network mediation committee 1994~1996 1997~2000

Launched the commercial Internet Launched the commercial broadband service (1994) Internet service (1998) The Ministry of Information and Com- The number of Internet users exceeded munication was founded (1994) 10 milion (1999)

1990 2000

1990 ~ 1993 1994 ~ 1996 1997 ~ 2000

1991 1994 1997 •Launched the online issuance •Introduced a commercial Internet service [KT] •Launched the Internet stock trading service service for a copy of the “resident •Introduced a text-based MUD game for the first time •Launched a free Internet service, including search engine and registration” •Launched the first government agency websites email services [Chongwadae, etc.] •Launched the first Internet portal service [Netsgo] 1995 1998 •Launched the ‘WWW’ service •Launched the first commercial broadband Internet service •The first Internet cafe [Netscafe] was opeded [Thrunet] •Introcuced the Internet newspaper and broadcasting •Launched the e-government service service [Joongang Ilbo and KBS] 1999 1996 •Launched the ADSL service [Hanaro Telecom] •Launched the ISDN Internet service •Launched online banking service •Launched the first e-commerce and webzine services •Introcuced the first graphic-based MUG game •Held an information EXPO

1990 1994 1997 •The SDN-HANA network was •Introcuced commercial ISPs •Launched a dedicated private circuit service connected to the IP-based Inter- [KT, Dacom, iNet etc.] •Launched high-speed national Internet services net in the US • 1995 The number of PC communication users exceeded 3 million 1993 •Established a PC-Internet connection 1999 •Launched a comprehensive ad- •Established KIX and launched related services •The number of Internet users exceeded 10 million ministrative information network • 1996 The first IPv6 address was designated •Opened a public ISDN network 2000 •Opened a commercial ATM exchang network •The Korean ISP Association was founded

1990 1994 1998 •Established the Comprehensive •The Ministry of Information and Communication was •Established an advancement promotion plan for an information Measures for the Information founded and communications network Society • 1995 Established a plan for the promotion of PC communication and Internet usage 1992 •Established a comprehensive plan for super highway •Established the second basic information and communication infrastructure 1999 plan for the key national network •Enacted the Framework Act on Informatization •Established Cyber Korea 21 project Promotion •Enacted the Framework Act on Electronic Commerce and •Established the Act on Promotion •The Korea Internet Safety Commission was founded Digital Signature Act of Information and Communica- •The Korea Network Information Center [KRNIC] was founded tions Network Utilization 1996 •Established the first basic plan for promotion 2000 1993 informatization •Completed the second stage of the super highway communica- tion network project •Established the basic plan for •Organized an informatization promotion committee • the formation of super highway •The Korea Information Security Agency [KISA] was Enacted the Software Industry Promotion Law and Knowledge information communication founded Information Resource Management Act infrastructures •Established the guidelines for personal information protection •Promoted the top 11 initiatives for e-government •The Korea IT Industry Promotion Agency [KIPA] was founded 2001~2005 2006~2008

Korea was ranked No . 1 for the establishment of its broadband networks [2001] Launched the world's first WiBro and HSDPA services Enacted the Information Established the basic plan for u- Korea (2006) Communications Network Act [2001] Implemented the Restrictive Identification System [2007) The number of broadband Internet subscribers exceeded 10 million [2002] The Korea Communications Established "e- Korea Vision 2006" [2002] Commission was founded (2008) Established "Broadband IT Korea Vision 2007" [2003] Held the OECD Ministerial Meeting on the future of the Established "IT839 Strategy" [2004] Internet economy (2008) The number of Internet users exceeded 30 million [2004] Launched commercial VoIP services [2005] 2001 2010 2001 ~ 2005 2006 ~ 2008 2009 ~ 2010

2001 2006 2009 •The number of onLine banking users exceeded •Launched the world's first WiBro and HSDPA •The number of VoIP subscribers exceeded 6.5 10million services million •Introduced the Internet content class service •The volume of online shopping mall transactions •The number of mobile banking users exceeded 2002 exceeded KRW 13 trillion 10 million • • Launched the mobile application service for The size of the Korean game market exceeded the issuance of civil affairs documents 201 0 KRW3 trillion 2007 •The number of real-time IPTV service sub- 2003 •Launched the second-level .kr domain scribers exceeded 3 million •Launched the VDSL [20Mbps] service [QuickDom] service •The number of smartphone subscribers •Launched the mobile banking service •The total volume of e-commerce transactions exceeded 7 million •Launched the Korean.kr service exceeded KRW500 trillion •The amount of Wibro exports reached KRW1 2008 trillion 2005 •The number of the .kr domain registrations •Launched a commercial VoIP service exceeded 1 million •The number of mobile banking subscribers •The number of online banking subscribers exceeded 1 million exceeded 50 million • Industry·Service Launched a commercial IPTV service

2001 2006 2009 •Ranked as the world's No. 1 in the establishment •Ranked as the world's No. 1 in ITU DOI •Ranked as the world's No. 2 in the ICT of the broadband network (OECD) •Launched the FTTH service Development Index •Began the Giga Internet pilot project 2002 2007 • •DDoS occurred on July 7th The number of broadband subscribers exceeded •Ranked as the world's No. 1 in ITU DOI 10 million households • 2010 • Achieved the international standardization of Ranked as the world’s No. 1 in the penetration of WiBro/DMB ITU • broadband Internet Ranked as the world's No. 1 in the UN eGovernment Development Index and 2003 2008 eParticipation Index •The Internet security incident occurred on January 25th •The number of broadband Internet subscribers •Completed the BcN foundation establishment 2004 exceeded 15 million project •The number of Internet users exceeded 30 million •Expanded the commercialization and coverage •Promoted the pilot BcN project of WiBro Wave2 2005 •Ranked as the world’s No.1 in the ITU Digital Infrastructure Opportunity Index [DO] •Launched a pilot in-flight Internet service [Korean Air] •Established the international WiBro· standards [IEEE]

2001 2006 2009 •Implemented the Act on Promotion of Information •Established the basic plan for u-Korea •The Korea Internet and Security Agency [KISA] and Communications Network Utilization and •Established the measures for the prevention of was founded Information Protection the illegal use of other people’s names in online •Established a mid- to long-term broadcasting 2002 gaming and hacking communication network development plan •Established e-Korea Vision 2006 •Held the first Korea Internet Awards •Established the primary and secondary wireless Policy 2003 2007 Internet activation promotion plan •Held the 36th ICANN meeting in Seoul • •Implemented the Restrictive Identification System Established the Broadband IT Korea Vision 2007 •Established the comprehensive cloud computing 2004 •Introduced i-PIN, an alternative measure for RRN registration activation plan •Established the IT839 strategy •The Korea IT International Cooperation Agency 2010 • Established the basic plan for the establishment of BcN [KIICA] was founded •“☎118 Counseling Center” was founded 2005 2008 •Established the IPv6 transition promotion plan • Established the basic plan for the promotion of •The Korea Communications Commission was founded •The Internet Cooperation Forum was founded IPv6 distribution • •Established a comprehensive promotion plan • Held the OECD Ministerial Meeting on the future Implemented the real name verification of the Internet economy for the activation of the Internet ad market system for Internet civil affairs application •Enacted the Internet Multimedia Services Act •The Korea Internet Dream Star was founded 2009~2010 2011~2012 2013~2014 2015~2016

Ranked No. 2 in the ICT Development Launched a commercial LTE The number of domestic The number of online banking users Index [2009) service [2011] Internet users exceeded 40 exceeded 110 million million (2013) Ranked No. 1 in the UN e-Government Celebrated the 30th Ranked No.1 in the DECO Open, Useful, Development anniversary of the launch of Launched a commercial IPv6 Reus-able [OUR) Data Index Index and e-Participation Index [2010) the Internet in Korea (2012). service (2014) Announce the long-term comprehensive plans The number of smartphone subscribers Launched a Giga Internet of intelligence information society in response exceeded 7 million (2010) service (2014) to the 4th Industrial Revolution

2011 2016 2011~2012 2013~2014 2015~2016

2011 2013 2015 •Launched a commercial LTE service •The number of domestic Internet users •The number of online banking users exceeded 110 million + (SKT/LG U ] exceeded 40 million •The number of broadband Internet subscribers exceeded 20 •Launched the "(Korea)" domain service •The number of domestic mobile messenger million •The number of smartphone subscribers [KakaoTalk] users exceeded 120 million •The number of LTE subscribers exceeded 41 million exceeded 20 million •Domestic mobile messengers started •The size of the Korea game market exceeded KRW TO trillion •The number of online banking users exceeded entering the foreign markets [Line, etc.] 2016 70 milLion 2014 •Mobile telecommunications service subscribers in Korea •The number of mobile banking users exceeded surpassed 55 million 20 million •Launched a commercial IPv6 service •Go match between Alpha Go and Lee Sedol • The number of IPTV subscribers exceeded •Internet usage rate among senior citizens aged 60 or over 2012 10 million • was 51.4%, and user count surpassed 5.053 million The number of smartphone subscribers •The number of LTE subscribers exceeded •Korea’s first Internet-only bank has emerged, and has exceeded 30 million 36 million surpassed 0.3 million in subscribers •The number of IPTV service subscribers •The transaction volume of mobile e-commerce surpassed exceeded 6 million the PC shopping transaction volume, going over KRW 35.5 •The number of LTE subscribers exceeded trillion won 15 million •Gachon University Gil Medical Center opened the AI Cancer Center

2011 2013 2015 •Ranked as the world's No. 1 in the ICT •Ranked as the world's No. 1 in the ICT •Ranked No. 1 in the DECO OUR Data Index Development Index ( as of 2010) Development Index [as of 2012) •Reclaimed the world’s No. 1 ranking in the ICT Development •Established the LBS Business Support •DDoS occurred on March 20th [affecting Index as of 2014 Center financial world and broadcasting companies) •Confirmed the distribution method of 700MHz frequencies •Ranked as No. 1 in the category of the •APT occurred on June 25th [affecting •Korean Internet speed ranked No. 1 for 7 consecutive quarters wire-less broadband Internet subscribers government and public agencies] •The Korean team won the DARPA Robotic Challenge per 100 people [OECD) •Held a bidding for LTE frequencies allotment •The Korean team won at the DEF CON Hacking Conference •DDoS occurred on March 4th 2016 •Completed the allotment of IPv4 2014 •Launched a commercial Giga Internet •Korea has ranked 1st in ICT Development Index for 2 2012 service consecutive years • •Marked the 30th anniversary of the launch of • Constructed the world’s first 5G demonstration service network Ranked as the world's No. 1 in the UN •Korea has ranked 1st in Internet speed for 13 consecutive the Internet in Korea e-Government Development Index for three • quarters The number of broadband Internet consecutive years •Constructed LPWA network dedicated to IoT around the subscribers exceeded 18 million •Connected to the international IPv6 line country •Ranked as the world's No. 2 in the ICT •Finished the IPv6 commercialization by domestic mobile Development Index as of 2013 networks •Launched an open platform shared by the financial institutions

2011 2013 2015 •Established the promotion plan for the activation •Opened the Phishing Response Center •Established the K-ICT strategy of the NFC-based mobile smart life •Launched the Ministry of Science, ICT and •Enacted the Cloud Development Act service Future Planning •Enacted the Information Security Industry Promotion Act •Established a pan-government cloud computing •Enforced the Amendments of the policy council Information Communications Network Act 2016 •Implemented the Act on the Protection of •The Internet Startup Alliance was founded •Announce the long-term comprehensive plans of intelligence Personal Information •Announced the Guidelines for the Internet information society in response to the Fourth Industrial •Introduced a mobile ad platform certification Search Service Revolution system •Expand the subjects obligated to pass ISMS (Information 2014 Security Management System) certification to include 2012 •Held the ITU Plenipotentiary Conference in Busan medical and educational institutions •The Korea Internet Governance Alliance was •The Multilateral Internet Governance •Open a support center for FinTech security and founded Alliance was founded authentication technology •The Day of Information Security was designated •Opened the IoT Innovation Center •Launch Cybersecurity Alliance For Mutual Progress (CAMP) [second Wednesday of July] •Opened the Comprehensive IPv6 Support Center •Establish the mobile app accessibility guideline 2.0 (KS X •Launched the prohibition of RRN 3253:2016) KCS (Korea Certification Standard) •Launched a TFT for the improvement of •Run a robo-advisor test bed ecommerce regulations Foreign and Domestic Internet Usage

(unit: %, 1000 people) Internet usage in Korea

Internet user count 43,636 Internet usage 40,080 41,118 41,940 37,010 37,180 38,120 34,910 35,590 36,190 36,580 33,010 88.3 82.1 83.6 85.1 76.5 77.2 77.8 78.0 78.4 72.8 74.1 75.5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 *Aged 3 years or over

(Unit : %, 1 million people)

Internet user count 3,488 International Internet usage 3,207 2,931 2,660 Internet Usage 2,459 2,014 2,216 1,561 1,751 1,365 47.1 1,024 1,151 43.8 37.2 40.5 34.8 20.6 31.7 15.8 17.6 29.2 23.1 25.6 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 P

p : estimate

Internet Usage by Country Internet usage ▼ (Unit : %)

96.8 96.3 93.5 93.3 93.1 92.9 92.7

Norway | Denmark | Bahrain | Japan | Netherlands | catarrh | Finland

92.0 91.2 90.6 89.9 88.5 88.4 88.2

England | United Arab| Sweden | S. Korea | Canada | Estonia |New Zealand Emirates

*Aged 16-74 years according to ITU standards Internet Address Status

IPv4, IPv6 and AS Number Adoption Status

USA Korea

IPv4 Number IPv4 Number 1,612,439,040 112,430,33 6 6 th

IPv6 Number IPv6 Number 1st 11th 43,601(/32) 5,251(/32) AS Number AS Number 25,130 1,023 17th

Domain Registration of Key Countries

Germany

domain 1st .de Domestic domain Number of registrations 16,122,229 registration

(Unit : cases) Two-level system (English.kr / Korean.kr / Korean.한국) 359,007

Three-level system 2nd UK 3rd Netherlands 18th Korea (co.kr / or.kr etc.) domain .uk domain .nl domain .kr Number of registrations Number of registrations Number of registrations 717,094 10,012,729 5,684,155 1,076,101 Mobile is Strong

Internet Wireless Internet 97.7 Access Method

Share of internet users accessing (Unit : %) internet through wireless internet Wired Internet Using wireless internet from mobile phones, such as 3G/LTE 97.2

76.0 Using wireless internet with 74.1 a certain range, such as WiFi

*Aged 3 years or over, multiple answers Using wireless internet, 4.8 such as WiBro

*Aged 3 years or over, multiple answers

Internet Banking (PC/Mobile) Status (Unit : 1,000 case, 1 billion KRW)

Internet banking (PC/Mobile) Mobile banking performance 1-year growth rate 1-year growth rate performance (daily average) for internet banking for mobile banking

Number of use Amount used

87,503 26.2 % 78,022 %

25.2 53,093 40,286.9 42,424.7 42,393 1-year comparison

% 2,496.2 3,149.4 5.3 12.2 %

1-year comparison 2015 2016 2015 2016 (Unit : 1 million won)

Transaction volume by online shopping businesses(2014~2016)

KOSTAT, Korea statistics portal online shopping trend 2017

Mobile shopping

2014 2015 2016 14,869,803 24,856,980 35,544,592 +8,310,170 +9,987,177 +10,687,612

126% 67% 43 % 1-year 1-year 1-year comparison comparison comparison

Internet(PC) shopping

2014 2015 2016 30,432,684 29,198,635 30,072,455 -1,505,544 -1,234,049 873,820

International advertisement cost for PC and Mobile

(Unit : 1 million dollar, %)

PC Mobile

2015 Advertising 2015 Advertising costs 98,852 costs 52,759 Share 65.2% Share 34.8%

2016 Advertising 2016 Advertising costs 98,092 costs 77,959 9.5% 9.5% Share Share 55.7% drop 44.3% rise Data Protection

Distribution Site Exploit Site Total 1,370 9,674 11,044 Number of detected websites with malicious code in 2016

1.1% Information leakage 0.4% Bitcoin (Mobile device information, Smishing) 0.2% DDos 3.7% Information leakage 0.2% Key logging (PC information, game account, % Backdoor account information) 0.0

3.7% File creation (Dropper, Downloader) 75.7% 4.6% Etc Information leakage 2016 (Farming and 5.0% Ransomware Financial Malware Type Information) 5.4% Remote control

Number of Counseling Sessions on Personal based on cases registered Information Infringement at Privacy Protection Center

(Unit : cases) 200,000 177,736 180,000 166,801 158,900 160,000 152,151 140,000 122,215 120,000 98,210 100,000 80,000 54,832 60,000 39,811 23,333 35,167 40,000 25,965 18,206 20,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Smishing Response System

Collection Investigation Analysis Response

Internet Static analysis

KISA personnel in charge of the business Web crawling Dynamic analysis Verification SMS or URLl suspicious Suspicion Suspicious app Analysis Block of Smishing URL (APK) result request Collection Collection Investigation Analysis Response ISP/ channel Server Server Server Server MSO

Collecting smshing URL web crawling Malicious app information Static analysis analytics report

URL auto-extraction Statistics, Download app(APK) Dynamic analysis Information sharing

Mobile Emergency Cyber Cure System

Mobile Mobile communication Infected device Malicious app detection KISA company user

3 Information on malicious 5 Curing infected app distributors malicious app and remedies

External report, etc. System administrator 1 Malicious app detection Mobile cure operating system

Spacing response 2 Malicious app 4 Identify infected system analysis device 2017 Korea Internet White Paper | Top 10 Internet-Related News of 2016

Top 10 Internet News of 2016

01 Artificial Intelligence, the Key Player of the Fourth Industrial Revolution

The boom of artificial intelligence (AI) triggered by "Alpha Go," has hit the international community, including Korea. In October of 2015, Alpha Go gained worldwide attention by defeating Fan Hui 2p, and then subsequently conquered the game of Go by defeating Lee Sedol 9p in March 2016, and Ke Jie 9p in May 2017. The series of events have brought forth a sort of "shock" that what people thought was the realm of human mind has been conquered by a machine, artificial intelligence. However, it has also inspired 1

18 a lot of technological developments based on AI. After Alpha Go, artificial intelligence has spread in all directions including remote medical diagnosis, drug development, smart assistant, machine translation and interpretation, autonomous vehicle, smart factory, household robot, caretaking of infants and senior citizens, etc. At large ICT international events such as "CES 2017" and "MWC 2017" held early 2017, actual products and services using artificial intelligence have been launched in large quantities, and artificial intelligence is rapidly penetrating people's lifestyles. Industries related to artificial intelligence are also growing rapidly and are considered the key player of the fourth industrial revolution, which has set itself as the global paradigm after the Davos Forum in 2016. IDC, a market intelligence provider, predicted that the global artificial intelligence market will grow from $127 billion (KRW 142.8 trillion）in 2016 to about $165 billion (KRW 185.5 trillion) in 2017. In addition, Digieco estimated that the domestic artificial intelligence market will reach KRW 11.1 trillion by 2020. Compared to global firms like Google and IBM, Korea's artificial intelligence is still only in its infancy. According to IITP, Institute for Information & Communications Technology Promotion, compared to United State, the country with the best technology on artificial intelligence, Korea has only 75% of US's technological prowess. This is about a 2 year technological gap. Ministry of Science and ICT (MSIT) plans to invest KRW 163 billion to support research and development (R&D) in 2017, a 47% increase from the previous year (KRW 110.6 billion).

02 Accelerated Development of Autonomous Vehicles

The competition on autonomous vehicles is heating up. Top ICT giants are joining in with the automobile manufacturers around the world. Overseas, Intel and Qualcomm have followed Google and Apple into the development of autonomous vehicles, and domestically, Samsung and LG have also followed Naver into the competition. The competition to dominate the initial market is also high. IHS, a market intelligence provider, expected that if autonomous vehicles were to be released in 2020, 230,000 units will be sold in 2025 and 11.8 million units will be sold in 2035. In addition, Boston Consulting Group 2 19 2017 Korea Internet White Paper | Top 10 Internet-Related News of 2016

predicted the market volume will be $42 billion in 2025. In particular, because the development of autonomous vehicles cannot be carried out independently, there has been active alliance between the automobile manufacturers and the ICT companies. Chrysler and Google have revealed an automobile of their joint efforts in December 2016, and Toyota and Naver will present their own autonomous vehicle in 2017. The Korean government is also actively supporting the development of autonomous vehicles. In 2016, Ministry of Land, Infrastructure and Transport has declared the autonomous vehicle one of 7 new growing industries, and is showing enthusiasm to develop related technology. Also, they are speeding up the commercialization of autonomous vehicles by temporarily authorizing test drives of autonomous vehicles starting from Hyundai Motors in 2016, closely followed by those of Seoul National University, KAIST, Naverlabs, Mando and Samsung. The standardization process for the commercialization of autonomous vehicles has also started to take off. In 2016, 12 automobile manufacturers including Hyundai Motors, Toyota and Nissan (Japan), GM (US), Volkswagens and BMW (Germany), and Volvo (Sweden), and 27 international IT companies including Qualcomm and Uber formed a global consortium and are currently involved with its activities.

03 5G, the Next-Generation Network That Makes Imagination Come True

The era of next-generation network 5G is approaching. 5G has a transmission speed of at least 20Gbps (20 gigabytes per second), which is a core infrastructure for realizing dream technology such as artificial intelligence, autonomous vehicle, mixed reality (MR), and the Internet 3 of Things (IoT). This is a speed in which 2.5GB Ultra High Definition (UHD) movies can be downloaded in just one second. In order to commercialize 5G, telecommunications equipment and service providers around the world are already competing in technology development. In particular, SK Telecom, KT, and LG U+ are aiming at 5G commercialization by 2019, a step ahead of the international community's goal of commercialization by 2020. As a result, their progress is becoming visible. In June 2016, SK Telecom

20 and Ericsson jointly built and successfully demonstrated the 5G trial network. KT also successfully conducted the 5G field test on the Airport Railway in May 2017. Experts predict that 5G will become more refined from 2018. The Korean government and KT are preparing to display 5G-based realistic media at the Pyeongchang Winter Olympics in February 2018. With this service, it is possible to watch athletes performing at the Pyeongchang Olympics on a 360-degree virtual reality screen in a car on the streets of Seoul. Multidimensional image services to select a desired point of view will also be provided.

04 Hyper-Connected Society and the Next-Generation Internet Address System (IPv6)

With the Fourth Industrial Revolution, the importance of the IPv6 address system is increasing in the hyper-connected society where all human beings, things and environments are connected. The global IT research firm Gartner predicted that by 2020, 26 billion IoT devices will be connected to the Internet, and the global IT company Cisco estimated that some 50 billion devices will be connected to the Internet. Thus the IPv6 address is a next-generation internet address system introduced to overcome the quantitative limitations (depletion of address) of the IPv4 system. Research on IPv6, which has been attracting attention as the next-generation internet address system, has been going on in various countries around the world for a long time. Leading countries like Belgium, Switzerland, and the US have already implemented IPv6 in mobile carriers, and global IT services like Google, YouTube, and Facebook are also preparing for the IPv6 future by launching IPv6 services. Domestic companies have also built IPv6 network services around mobile carriers. Starting with SK Telecom launching the first mobile IPv6 commercial service in Korea in 2014, KT and LG U+ have also followed suit. Meanwhile, Korea Internet and Security Agency (KISA) and Korea Telecommunications Operators Association (KTOA) cooperated with major internet service providers (ISP) to promote the interoperability of IPv6 and IPv4. Through this, the government has made a turning point in the expansion of IPv6 by solving the difficulty of creating a IPv6 network base, among other efforts to spread IPv6. In addition, 10 million IPv6 users in 4 21 2017 Korea Internet White Paper | Top 10 Internet-Related News of 2016

Korea are now able to receive smooth IPv6 services, and a foundation for the growth of various services and contents of the next generation network has been created. It is expected that domestic internet companies will lead the global internet market with international standard technology based on this foundation.

05 The First Year of Popularization of MR

Mixed Reality (MR) has met its first year of popularization. The concept is a combination of Virtual Reality (VR) and Augmented Reality (AR) and follows both their characteristics, with increased immersiveness and decreased disparity from reality, Between entertainment-oriented VR and AR lacking killer contents, MR is emerging as a new driving force with innovative user interface (UI) and practical contents. Since it is not yet fully commercialized, it does not have a clear difference from VR and AR, but the predominant opinion is that it has a higher possibility for future growth. ARC, a global market intelligence provider, predicted the MR market to grow from KRW 779.2 billion in 2016 to KRW 10,981.1 billion in 2021, and the annual average growth was expected to reach 70%. The possibility of MR commercialization has been confirmed with demo videos from an American startup company Magic Leap. Magic Leap released a demo video of a giant whale leaping from the floor of a gym, and the 5 students in the gym witnessed the virtual whale without any additional device. Some business MR content has already been commercialized. One example is JAL, which employs Hololens for staff training and inspections. Currently Microsoft (MS) and Intel are leading the MR market. They have set off to dominate the market with "Hololens" (Microsoft) and "Project Alloy" (Intel), which are wearable devices in the form of an HMD (Head-Mounted Display) that feature MR. MR is expected to be applied to fields that require immersive content experience, such as game, education, film and tourism. Experts voice that the most crucial thing for MR commercialization is killer contents like the AR game "Poketmon GO."

22 06 O2O, Optimized Consumption for Me Anywhere

O2O (Online to Offline) service is spreading quickly. Following food and grocery delivery, O2O has deeply penetrated daily life, from shopping, moving, real estate/accommodation, finance, medical care, pet services, parking, laundry, vehicle management to even lawyers and accountants. The market is also growing at a fast pace. At the end of last year, KISA and Digieco predicted that the domestic O2O market would reach KRW 321 trillion in 2017 and KRW 1,081 trillion in 2020. With its high growth potential, not only startup companies but also ICT giants like Naver and Daum Kakao have entered the market. Naver opened a service called "Window" which lets customers purchase 3800 instore products online. Daum Kakao is providing a platform that connects Daum Kakao users and O2O services. Convenience stores, with stores all over the country and high user accessibility, are also emerging as the new platform for the O2O market. As a result, in 2016 there has been active engagement between online marketplaces and convenience stores. Experts predict that the evolution of O2O will continue in 2017. In particular, it will go beyond connecting online and offline services and become a "concierge" service that provides services optimized for the consumer's lifestyle and preference.

07 Commercialization of Biometric Security

Biometric security using fingerprint, iris, veins, face, etc. is on its way to being commercialized. The cost of infrastructure, which has been pointed out as a major stumbling block to the expansion of biometric security, has been solved by the launch of smartphones with biometric authentication

23 6 2017 Korea Internet White Paper | Top 10 Internet-Related News of 2016

features. With the expansion of FinTech, digital identity verification has become a pressing issue, and financial institutions including commercial banks have begun to implement biometric security. Saumsung Electronics introduced the world's first iris scanner with Galaxy Note 7, which has been discontinued in 2016, and subsequently implemented the fingerprint sensor, iris scanner and face recognition system on Galaxy S8 in 2017. There was also active introduction of biometrics in the financial sector. Commercial banks like Shinhan and KB have implemented biometric authentication from 2016, and are launching services that enable financial transactions with veins, iris and even by voice only. Related markets are growing at an incredible pace. According to Tractica, a market intelligence firm, the global biometrics market is expected to grow at annual average rate of 25.3%, from $2 billion in 2015 to $14.9 billion by 2024. Domestically, the biometrics market is expected to grow 9.2% annually and reach KRW 414.7 billion by 2018. President Moon's pledge to abolish the National Public Key Infrastructure is still controversial, but in the perspective that it eliminates ActiveX, and that it simplifies the digital signature and authentication process, it is a good news for biometric authentication. Biometric authentication is a safe and convenient process, but its leakage can be more detrimental than that of personal information. Unlike passwords, biometric data cannot be changed. Recently, Chaos Computer Club (CCC), a German association of hackers, released a video hacking Galaxy's S8's iris scanner using nothing more than a laser-printed photograph and a contact lens. Stronger security and legislative system is required to meet the needs of the popularization of biometric security. 7

24 08 Spread of Internet-only Bank and Fintech

Korea's first Internet-only bank has emerged. In December 2016, K-Bank won approval from the nation's Financial Services Commission and started business in April 2017. In July, KakaoBank made its debut. It is the first time in 25 years a bank has opened in Korea after Peace Bank of Korea in 1992. The launch of these two banks have created a great impact in the financial community. As of July 31, 2017, K-Bank exceeded KRW 690 billion in receipts (e.g., savings) and KRW 630 billion in loans. Although the KakaoBank was still in its early stages, it had KRW 344 billion in 8 receipts and KRW 333 billion in loans. With such performance from Internet banks, traditional banks are on edge, launching products with high savings interest rate or lowering the interest rate for loans. They are also improving services, such as launching digital channels similar to those of the Internet-only banks. The consensus is that FinTech is reconstructing the financial industry by taking over even the core financial businesses. It has gone farther than just cooperation between ICT companies and financial institutions to maximize the efficiency of financial services, instead applying innovate technology like block chain, artificial intelligence, bidirectional user interface and Big Data processing to create a new financial ecosystem. In addition, financial companies, insurance companies, securities companies, electronic payment companies, retailers, startup companies are participating in the Internet banks as shareholders. Financial companies have overcome their exclusive attitude and started to actively engage with FinTech startups. Commercial banks have started programs to support FinTech startups, and some have even transformed themselves to "platform companies" working together with startups. With such collaboration among related businesses, the outlook for FinTech is very bright. Frost&Sullivan, a market intelligence provider, estimated that FinTech market in the Asia-Pacific region

25 2017 Korea Internet White Paper | Top 10 Internet-Related News of 2016

will reach $71.9 billion by 2020. Meanwhile, Statista estimated the world's FinTech transaction volume will grow to $5.33 trillion by 2020.

09 Fake News, a New Social Issue

So-called "fake news," which is made of facts that are made up or difficult to identify, is becoming a social problem. At the end of 2016, amidst political confusion, fake news like "113 police officers injured and 50 police buses trashed at the candlelight vigil," and "List of Cabinet to be selected when candidate X is elected" spread through Facebook and Kakaotalk. Even after the early presidential election on May 9, 2017, fake news was rampant. The fake news is affecting countries world wide, not just Korea. Fake news was prevalent during the French presidential elections. United States media even evaluate that fake news played a significant role in the Trump and Hillary presidential elections. Such news not only creates confusion, but also financial losses. Digieco analyzed that the financial losses due to fake news amount to KRW 30.9 trillion each year. Thus the international community is at war with fake news. US President Mr. Trump even argued that the media is spreading fake news against him, and advocated an "Intel Committee" that will determine the integrity of news. In Korea as well there is growing opinion that there needs to be something done about fake news. As some of such measures, the National Assembly proposed a law on prevention and containment of fake news.

9 26 10 Platform Economy, an Engine for the Fourth Industrial Revolution

Platform economy has met its era, where supply and consumption between economic agents happens on digital platforms. Accenture, a market consulting company, estimated the digital economy to take up 25% of the entire global economy in 2020, due to the rapid transition in the market. The platform economy is also closely related to the Fourth Industrial Revolution. Unlike the previous industrial revolutions, the Fourth Industrial Revolution is about creating value through platforms. Therefore, the expert opinion is that the key players of the Fourth Industrial Revolution can only be companies that construct or utilize the platform. International giants like Google, Apple, and Amazon have already entered the competition to lead the platform economy. Traditional businesses as well are rapidly transforming themselves into platform businesses. A traditional manufacturer GE used IoT sensors and B2B solution platforms to enable optimal control of their equipments and preemptive maintenance of facilities. Tokyo Electric Power Company put sensors on their turbines and power plants so that they can predict equipment malfunctions by analyzing the data. Telecommunications companies like AT&T are also promoting platform businesses based on their network specialties. Domestic companies as well are launching themselves into the international platform market. Search portals like Naver and Daum Kakao are actively expanding their platforms, and Samsung is trying various methods to build global platforms through mobile OS or artificial intelligence. Hyundai is trying to transform into a platform company in the eco-friendly automobile and autonomous vehicle field. 10

27

Part 1 Industry and Service

1. Internet Economy

2. Internet Industry 3. Internet Service Convergence

4. Internet Information Service

5. Internet Service in the Public Sector 2017 Korea Internet White Paper | Part 1 Industry and Service

1. Internet Economy

A. Data Economy

Data economy refers to an ecosystem composed of members who play different roles in data production, infrastructure provision, and research in the process of collaborating to access and utilize data (European Commission, Building a European Data Economy, 2017 ). In other words, various market participants acting to create value from data through the developments of various applications to improve everyday life, such as traffic sign management or remote medical examinations, constitute data economy. The data economy encompasses the entire data market, where the products and services of digital data processed from raw data are exchanged. This includes the generation, collection, storage, processing, distribution, and delivery of data processed by digital technology (IDC, European Data Market, 2014). In Korea, the data market size provided by Kdata, a similar concept to the data economy, was KRW 13,355.5 billion in 2015, and is expected to grow 2.5% and reach KRW 13,683.2 billion in 2016. The annual average growth rate of the data industry, which consists of data solutions, data construction/consulting, and data services, has been 8.0% since 2010 (Ministry of Science and ICT, Korea Internet and Security Agency, Summary of the 2016 Data Industry, 2017) The size of the data solution market was KRW 1,412.4 billion in 2015, which includes data collection, data architecture, DBMS, data management, data quality management and data platform. DBMS had the largest size, with KRW 572.7 billion, and then data management follows with KRW 357.4 billion. As for data construction/consulting market, data construction amounted to KRW 5,414.2 billion in 2015, a majority of the market. Data service consists of data trade, information, and data analysis, and information was the majority of the market with KRW 5,817.1 billion.

30 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 16 31 ’ 2017 , y CAGR 10~ ’ 16 ’ Rate 15~ Growth ’ (Unit：KRW 100 million) 100 (Unit：KRW p of 2016 Data Industr y exchange exchange of various economic te te an AI platform like Amazon's ned interest in AI, with government uture lifestyle technology like Smart ng. As the AI becomes a hot issue, in in SF films, such as robots, AI, IoT ment of ICT that blurs the boundary boundary the blurs that ICT of ment des des direct/indirect economic effects. Summar

, nd increase customer loyalty, while at on a platform. Commercial transaction peting for an upper hand in this market. hnologies are businesses hnologies realized, platform he voice-recognition AI secretary market. KISA , MSIT [ 37,407 43,180 47,715 49,985 53,730 55,280 55,651 0.7% 6.8% Volume of Data Industry ：estimate The Go match between Lee Sedol and Alpha Go resulted in heighte The reason platform economy is blooming is in the rapid develop Platform economy refers to an economic area formed through the Total 86,374 95,115 105,519 113,032 124,678 133,555 136,832 2.5% 8.0% p Category 2010 2011 2012 2013 2014 2015 2016 B. Platform Economy * [Table 1-1-1] between the online and offline world. Technology that was only and autonomous vehicles, are becoming the reality. As these tec that enable their implementation are also on the rise. activities, such as production, consumption, and distribution, and advertisement make the majority, but the concept also inclu the three telecommunications services in services are Korea fiercely com the three telecommunications task and projects focused on AI and AI-related platforms emergi The common strategy for all three of these "Alexa" in companies the isface of to fierce creaglobal competition to preoccupy t The plan is to gather all their services into the AI platform a the same time nurturing AI as a key weapon that can encompass f Home, Home, Smart Car and Smart City. Consulting Data Service 42,242 43,218 47,317 52,258 57,329 64,151 66,305 3.4% 7.8% Data solutionData 6,725 8,717 10,487 10,789 13,619 14,124 14,876 5.3% 14.1% DataConstruction/ 2017 Korea Internet White Paper | Part 1 Industry and Service

[Table 1-1-2] AI Platforms by Top Three Telecommunications Businesses

Business Division Main Activity "AI Tech Lab" under Future Upgrading AI service "Nugu" and directing the AI SK Telecom Technology development "AI Tech Center" under Developing AI-integrated TV GiGA genie and KT Convergence Technology nurturing human resources LG U+ AI Service Part Launching AI service in late 2017 and perfecting SW

[Financial News, Dominate the AI Platform ... Competition Rising for Top 3 Telecommunications Companies, 2017]

C. Internet Startup

Startup business is gaining worldwide attention. Due to the rapid growth and spread of telecommunications infrastructure, the supply and demand of services based on it is increasing explosively. Korea's startup ecosystem is also stabilizing with the support of the government. According to Korea Venture Business Association, 7,700 venture businesses in 2003 increased to more than 30,000 in December of 2015, and reached KRW 215.9 trillion in profits and 8.6% in annual average increase rate. The rapidly growing Korean startups are actively finding their way into the international market with their accumulated technology and strengthened global competitiveness. According to the 2016 Startup Investment Trends in Korea, by Platum, a media for startup companies, official investments to domestic startup companies in 2016 amounted to KRW 1.0078 trillion, a 24% increase from the previous year's KRW 811.9 billion. National IT Industry Promotion Agency is operating a program called "K-Global Startup Program" which selects startup companies with creative ideas and jointly incubates them for five months with international and domestic leading companies like IBM or Naver. This project was originally conducted by the Korea Internet and Security Agency (KISA) since 2010, and was given to National IT Industry Promotion Agency in 2016 to cover all ICT fields and strengthen their overseas connection, with the ultimate goal of systematically fostering globally competitive startup companies [Table 1-1-3].

32 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 33 2016 , NIPA [

], 2015 , MSIT [ 2 6 23 21 32 18 56 158 2 9 23 27 30 11 10 112 5202935404547221 - - 170.3 84.2 37.2 39.9 56.41 388.01 Commercialization and Investment Result of K-Global Startup K-Global of Result Investment and Commercialization Startups Category 2010 2011 2012 2013 2014 2015 2016계 합 Number of Number of Number of Businesses 100 million) 100 Commercialized Investment (KRW (KRW Investment Supported Teams Supported [Table 1-1-3] 2017 Korea Internet White Paper | Part 1 Industry and Service

2. Internet Industry

A. Status of the Internet Industry

The internet industry, which is represented by the overall economic activities generated from the Internet based on information technologies, can be largely divided into three categories: base industry, support industry, and application industry [Table 1-2-1].

[Table 1-2-1] Classification of the Internet Industry

Main Sub Category Third-level Category Category Smartphone, DTC, computer (desktop, notebook, medium and large Internet terminal computers, other compact computers), set-top box, etc. VoIP, videophone, pair and coaxial cable transmission system, photo Base Transmission equipment transmission system, signal converter, multiplication system, etc. Industry Wired LAN equipment (router, network switch, hub, etc.) wireless LAN Network equipment equipment (access point, etc.), subscriber’s modem (optical modem, xDSL modem, etc.), network security equipment, etc. System S/W Security S/W, IT operation and management S/W, middleware S/W, etc. Support IT system management Industry IT system management, hosting service, IT support service, etc. and support services Integrated digital service network (ISDN), Internet phone, Internet Wired and wireless backbone service, leased line service, high-speed Internet network access service service, mobile communication service (data), portable Internet (WiBRo), wireless LAN Optional network service, Internet-based access service, Internet Network access service management service, Internet support service, etc. Application Industry High-speed faxing service, credit card information system (CCIS), online reservation service, electronic data interchange service, remote Application service communication service, electronic payment service, online information processing service, etc. Webcasting, Internet media, Internet gaming, online education, Content service provision of specialized information, provision of digital image, provision of digital sound, provision of digital publication, etc.

[Korea Association for ICT Promotion]

Internet market volume in 2016 was KRW 95,235.7 billion, a 1.1% decrease from 2015's KRW 96,269 billion, and the annual average growth rate since 2012 was 3.3%. More specifically, the size

34 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] ] ] 35 2016 2016 2016 , , , y y y 1-Year 1-Year 1-Year 1-Year Growth Rate Growth Rate Growth Rate 6.2 7.0 9.4 8.2 4.9 7.4 12.8 5.5 -2.9 -6.8 -2.8 -11.7 -2.0 1.1 -12.5 -2.3 (Unit：KRW 1 billion, %) billion, 1 (Unit：KRW %) billion, 1 (Unit：KRW (Unit：KRW 1 billion, %) billion, 1 (Unit：KRW CAGR CAGR CAGR ICT Product Surve ICT Product Surve ICT Product Surve y, y, y, p p p the previous year, and with a a with and year, previous the 131 2016 2016 2016 (2.8) 3,109 (0.3) (19.2) 13,115 (80.8) 1,080 (17.0) (42.1) (96.9) (40.9) 16,224 37,708 38,919 40,093 ICT Suve ICT Suve ICT Suve

, , , p NIPA NIPA NIPA [ [ [ p p 2,947 128 (19.4) 12,211 (80.6) (2.4) (0.3) 1,075 (97.3) (15.7) (45.8) (38.5) 15,158 42,863 37,045 44,066 (19.2) 2,694 (80.8) 11,305 131 (2.3) (0.3) 1,063 (97.5) (14.7) (35.7) 46,014 (49.6) 13,999 47,208 34,047 2,154 (16.3) (83.7) 11,028 147 (2.4) (0.3) 1,134 (97.3) (51.6) (14.3) (34.1) 46,383 13,182 31,507 47,664 (15.0) 1,921 (85.0) 10,848 997 223 (2.3) (0.5) Revenue of Internet Base Industry Internet of Base Revenue Revenue of Internet Support Industry of Support Internet Revenue Revenue of Domestic Internet Industry Internet of Domestic Revenue (97.2) 42,412 (15.1) (51.7) (33.2) 12,769 27,973 43,632 Total 12,769 13,182 13,999 15,158 16,224 6.2 7.0 p：estimate, ( ) percentage p：estimate, rate growth average annual CAGR：2012∼2016 p：estimate, ( ) p：estimate, percentage rate growth average annual CAGR：2012∼2016 p：estimate, ( ) p：estimate, percentage rate growth average annual CAGR：2012∼2016 Total 43,632 47,664 47,208 44,066 38,919 -2.8 -6.7 Division 2012 2013 2014 2015 Total 84,374 92,353 95,254 96,269 95,236 3.1 -1.1 Base * * [Table 1-2-4] * * 2.8% 2.8% annual average decrease rate. [Table 1-2-2] of the base industry was KRW 38,919 billion, 11.7% smaller than * * [Table 1-2-3] IT System System IT Device Device Device Internet Internet Network Division 2012 2013 2014 2015 Support Industry Industry Industry Division 2012 2013 2014 2015 Management Application Application Transmission System Software 2017 Korea Internet White Paper | Part 1 Industry and Service

[Table 1-2-5] Revenue of Internet Application Industry (Unit：KRW 1 billion, %)

1-Year Category 2012 2013 2014 2015p 2016p CAGR Growth Rate Wired/Wireless 9,887 9,871 9,782 9,743 10,158 0.7 4.3 Access Service (35.3) (31.3) (28.7) (26.3) (25.3) Network Access 4,205 6,883 8,484 9,655 10,649 26.1 10.3 Service (15.0) (21.8) (24.9) 26.1) (26.6) Application 4,160 4,465 4,724 5,090 5,472 7.1 7.5 Service (14.9) (14.2) (13.9) (13.7) (13.6) 9,721 10,288 11,057 12,557 13,814 Content Provider 9.2 10.0 (34.8) (32.7) (32.5) (33.9) (34.5) Total 27,973 31,507 34,047 37,045 40,093 9.4 8.2

* p：estimate, ( ) percentage * CAGR：2012∼2016 annual average growth rate [NIPA, ICT Suvey, ICT Product Survey, 2016]

B. e-Payment Services

In the FinTech industry, electronic payment services refer to convenient payment services via mobile devices when paying for goods or services online and offline. The most representative method is paying with a mobile device or a mobile card that enables users to use a payment service via their smartphones. Remittance in the FinTech industry refers to convenient fund remittance by using one’s mobile device with the existing account number, mobile phone number, email address, or a certain SNS ID. In order to encourage FinTech startups, out government revised the "Enforcement Decree of the Electronic Financial Transaction Act" and regulations on electronic financial transactions in May 2016, lowering the minimum capital of small electronic financial institutions, with less than KRW 3 billion transactions per quarter, to KRW 300 million from KRW 1000 million. Financial Supervisory Service (FSS) abolished the mandatory use of Accredited Certificate in early 2015, but financial accountability is still unclear in the case of electronic financial transactions. On the other hand, developed countries clearly hold FinTech institutions accountable for any financial accidents so that the FinTech companies are responsible for their security. Domestic financial transactions amounted to KRW 109.8 trillion, 22.1% more than last year's KRW 89.9 trillion. Payment gateway service (KRW 79.9 trillion) increased by 24.1%, prepaid payment instruments (KRW 7.4 trillion) and Escrow deposit (KRW 19.3 trillion) increased by 23.3% and 30.4%, respectively.

36 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 37 2016 , Growth Rate Service y 2015 ervisor (Unit：KRW 1 trillion, %) trillion, 1 (Unit：KRW p ding. ding. For social commerce sites, from 2015 [Table 1-2-7]. [Table 2015 from ed. ed. Overall, as the number of new rted rted a convenient transfer system, r credit cards. FinTech companies .54 .54 million, a 5.4% increase from a a mobile based transfer service, so ply for remittance and pick up the Financial Su Financial , KRW , 2.5 the trillion), KRW transaction [ er er money from their registered bank omers, omers, a 4.6% increase from 2015, nternet banking services of 17 financial ased, electronic finance transactions also - - 0.1 0.3 0.7 133.3 1.6 3.9 4.4 4.4 2.5 -43.2 4.9 5.1 5.7 6.0 7.4 23.3 37.3 37.3 46.9 54.4 64.4 79.9 24.1 Electronic financial transaction amount transaction financial Electronic Total 51.7 66.5 78.0 89.9 109.8 22.1 From From 2015, the electronic payment service is continuously expan At the end of 2016, the number of customers registered to the i Service Payment Category 2011 2012 2013 2014 Instrument C. Financial Services Financial C. In the electronic bill presentment and payment department (EBPP In department the and bill electronic payment presentment amount decreased by 43.2% as the number of transactions decreas companies registering for the electronic finance business incre increased. where where customers only need to enter a 6-digit password to transf account to the site. Home shopping services have also launched have also introduced a service where users can use an app to goods ap from commercial banks, as well as using it for payment. customers can purchase with their bank accounts as well as thei as well as not accounts only do they run bank electronic payments but their they have also with sta purchase can customers institutions (cumulative sum for overlapping customers) was 122 2015. More specifically, 114.76 million people were retail cust and 7.78 million were corporate customers with a 9.7% increase [Table 1-2-6] Instruments Electronic Bill Bill Electronic Debit Payment Escrow Escrow Deposit 7.9 10.6 13.4 14.8 19.3 30.4 Presentment and Payment Gateway Gateway Payment Prepaid Payments 2017 Korea Internet White Paper | Part 1 Industry and Service

[Table 1-2-7] Number of Users Registered at Internet Banking of Financial (Unit：1,000 people, Institutions (Based on Year-end) 1,000 cases, %)

Difference Division 2013 2014 2015(A) 2016(B) Growth Rate (B-A) Retail 89,788 96,825 109,760 114,755 4,995 4.6 Corporate 5,704 6,363 7,093 7,783 690 9.7 Total 95,492 103,188 116,853 122,538 5,685 4.9

[The Bank of Korea, 2016 Domestic Internet Banking Service, 2017]

Meanwhile, the number of customers registered to mobile banking reached 78.36 million, a 2.4% increase from 2015, due to the increase in smartphone-based mobile banking. In particular, mobile banking based on smartphones, starting from December 2009, exceeded the 70 million mark with 74.68 million users, which is a 15.3% increase from 2015. 61 percent of customers registered for internet banking also registered for smartphone-based mobile banking service [Table 1-2-8].

[Table 1-2-8] Number of Uses Registered at Mobile Banking of Financial (Unit：1,000 people, %) Institutions

Difference Growth Category 2013 2014 2015(A) 2016(B) (B-A) Rate Smartphone 37,185 48,203 64,791 74,675 9,884 15.3 -based IC chipㆍVM 12,749 11,905 11,770 3,687 -8,083 -68.7 Total 49,934 60,108 76,561 78,362 1,801 2.4

* VM (Virtual Machine) refers to internet banking programs downloaded on the mobile device. [The Bank of Korea, 2016 Domestic Internet Banking Service, 2017]

D. e-Commerce

In 2016, Korea's online shopping transaction amounted to KRW 65.6 trillion, a 21% increase from the previous year. In the past 5 years, the aggregate transaction of e-commerce has been increasing 18~20% annually. According to A.T. Kearney's Future of Retail (2016), it is expected to grow by 19.7% each year until 2020, and become the fastest growing retail business in Korea.

38 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] ] 39 1 2017 2017 , , d d (Unit：%) Tren Tren g g %2 in in pp pp (Unit：KRW 1 million)1 (Unit：KRW 2016 1,058 4% 8 he expansion of delivery services. Transaction Share Rank nd car accessories (13%) accounted e grocery section was the fastest growing, Korea Statistics Portal Online Sho Korea Statistics Portal Online Sho

, , KOSTAT KOSTAT [ [ 4,278,521 5,175,481 6,670,644 8,328,391 13% 3 4,104,898 4,962,096 5,879,888 7,169,564 11% 4 38,497,861 45,302,487 54,055,617 65,617,046 (2013~2016) Volume of Retail Sales and Online Shopping Transaction Transaction Shopping Online and Sales Retail of Volume Volume of Online Shopping Transactions (2013∼2016) Total 38,497,861 45,302,487 54,055,617 65,617,046 Books 1,196,149 1,280,404 1,151,195 1,340,629 2% 12 Others 1,614,427 1,469,073 1,708,314 1,717,568 3% 17 Flowers 45,654 43,719 31,622 38,970 0% 16 Year 2013 2014 2015 2016 Software 59,728 58,431 50,226 58,619 0% 15 Groceries 3,288,965 3,610,886 5,242,803 7,067,762 11% 5 Cosmetics 2,100,463 2,668,957 3,519,393 5,171,317 8% 6 Accessories Various Services 640,200 960,393 1,157,221 1,349,225 2% 11 Sport and Leisure 1,638,745 1,899,092 2,093,674 2,520,543 4% 9 Product Category Product 2013 2014 2015 Travel and reservations (17%), fashion (16%), household goods a Agricultural Products Agricultural 1,132,350 1,170,952 1,434,163 1,730,738 3% 10 CD, Video, Instruments 152,792 162,549 168,803 205,055 0% 14 Travel and Reservations 6,418,903 8,382,610 9,788,412 11,288,326 17% for the largest portion of online shopping transactions, and th with annual average 30% increase over the last 4 years due to t [Table 1-2-9] [Table 1-2-10] Fashion-related Products 6,280,654 7,346,479 8,451,957 10,231,630 16 1-Year Growth Rate(%) Growth 1-Year - 18 19 21 Household Goods and Car Household Electronics and Computer and Accessories 3,083,543 3,413,900 3,543,025 3,986,279 6% 7 Telecommunications Device Telecommunications Office Supplies and Stationary 514,550 470,926 452,858 471,376 1% 13 Volume of Online Shopping Shopping Online of Volume Transactions (KRW 1 million) 1 (KRW Transactions Products for Babies and Children 1,947,320 2,226,539 2,711,418 2,94 2017 Korea Internet White Paper | Part 1 Industry and Service

KISA is operating an e-Commerce Mediation Committee according to the "Framework Act on Electronic Commerce" Article 32. Number of registered dispute resolution cases in 2016 was 1,035, 42.4% less than the previous year. The transfer of the e-Commerce Mediation Committee to another institution led to a disruption in their automatic counseling service, which caused the decrease in the number of counseling sessions. The automatic counseling service has been rearranged and has started service again from January 2017. Every year from 2011, the Fair Trade Commission has been doing a complete inspection of online shopping malls against any regulation violations. Thus, online shopping malls have been complying to the "Act on the Consumer Protection in Electronic Commerce, Etc." and actively trying to settle disputes with their own CS (Customer Satisfaction) service, which has also led to the decrease in numbers.

[Table 1-2-11] Counseling and Dispute Resolution of e-Commerce by Year (Unit：case, %)

Category 2010 2011 2012 2013 2014 2015 2016 Counseling 17,993 22,829 24,915 48,415 44,814 29,489 5,604 Dispute Resolution 4,521 4,546 5,596 6,758 3,382 2,267 1,305

* The number of counseling sessions decreased due to former automatic counseling system being put to a stop. It opened again after reconstruction in January 2017. [KISA, 2016]

E. O2O and Sharing Economy

1) O2O

O2O (Online to Offline, Offline to Online) service is a business that creates value by connecting online customers with offline service providers, and is a field where one can really experience the Fourth Industrial Revolution firsthand. The Fourth Industrial Revolution, which merges the digital world and the analog world, is evolving through the O2O service platform. Offline services such as calling cabs, designated drivers, food delivery, accomodations, real estate, and even domestic workers are connected with customers online. The O2O service is encouraging the market transition from supply-centered to demand-centered. 2016 marked the year when the pros and cons of O2O services were revealed as the market reached maturity, and cases of venture investment decreasing, laws failing to regulate, and O2O services failing to self-sustain themselves emerged.

40 6. 2.6

Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix 13.3 5.6 24.6 ] 10.6 y Fashio d n 7 41 -relate Surve (Unit：%) 0.5 y Food/ drink- related , 84% of 0.2 (cafe,etc.) 6.2 ces 5.1 store Large ital Econom 0.4 (department g Supermarkets 8.1 Space Sharing 11.4 2016 Di their their O2O service platforms has been expanding its O2O

cal businesses and inefficient 1.4 , Intent to Use O2O in the Future 12.2 advantage advantage in this aspect. unched an O2O service. Previous KISA Car delivery) delivery) is 76.6%, taxi 63.1%, [ g g of daily life services like food offline service providers participating. participating. offline providers service 10.6 tes of recognition, usage and usage 0.5 is 53.6%, taxi 37.2%, accomodations sportation service while opening up other 7.2%, 7.2%, large supermarkets and department 2016 Digital Economy Survey 12.6 Lifestyle Used 6.9 0.9 and 13.1 Healthcare Caretaking O2O Service Experience 7.5 Car 0.8 Sharing 17.2 13.8 Home Sharing 1.9 31.9 Estate 26 O2O Service Recognition Service O2O 8.5 44.8 37.2 27.2 Rates of Recognition, Usage, and Usage Intention for O2O Servi for Intention O2O Usage and Usage, of Recognition, Rates 63.1 Taxi Accomodations Real 53.6 31.5 Food (delivery) 76.6 Large platform businesses announced that they would be opening There has also been a case where an offline service provider la According According to the Korea Internet and Security Agency's service to lifestyle services, is planning to focus on the tran the on focus to planning is services, for smaller O2O businesses on 2016. November Daum Kakao, which lifestyle to service lifestyle service platforms for other companies. quality quality assurance. Offline service-based O2O services have the These These O2O services have had problems such as dispute between lo O2O O2O services were mostly created and run by IT companies, with [Figure 1-2-1] [Figure Internet Internet users are aware of O2O services, and are very acceptin (delivery), taxi, accomodations, real estate, etc. Survey on ra intention for all O2O services show that accomodations recognition 44.8%; usage for for food food (delivery) ( is 31.5%, taxi 2 store markets 10.6%; usage intention rates for food (delivery) 26%. 2017 Korea Internet White Paper | Part 1 Industry and Service

2) Sharing Economy

Sharing economy is the concept of collaborated consumption of goods. In other words, it means to maximize economic utility by sharing goods or real estate like cars, apartments, books and toys and making the most of one's resources. Resource owners can increase efficiency and profit by sharing idle resources with others, and consumers can use less money to own or use goods or services for a certain period of time. The sharing economy differs from commercial economy in that it is not operated by the market principles of supply and demand, but is created by a community sharing trustworthy goods and services. Sharing economy is driven by profit, but instead of utilizing acquired assets it utilizes idle resources so consumers can participate in both the consumption and supply of the sharing economy.

[Table 1-2-12] Sharing Economy Service

Category Transaction Method Shared Resource Example Automobile, bicycle, solar Socar, Green Sharing Users share product or service energy, etc. Car, etc. Auction, barter market, exchange Re-distribute products to those Auction, Barter market, voting, free voucher who need them G-market, etc. exchange, etc. Shared space, job search, travel Collaborative Collaboration by community Albamon, experience, knowledge, Community users Wizrom, etc. crowdfunding

[Hana Institute of Finance (2015), Change in Industry Ecosystem with Expansion of Sharing Economy, reconstructed.]

F. Online Advertising

Online advertisement became the dominant advertisement medium of Korea in 2012, surpassing network TV and growing at a fast pace of average 28.3% annually since the 2000s. On the other hand, the mobile advertisement market growing with the spread of smartphones, reached KRW 1 trillion in 2015 from KRW 210 billion in 2012. In 2016, it overtook Internet advertisements and became the second biggest advertising medium next to TV. It is expected that it will become the dominant advertisement medium, even surpassing cable TV in 2017, and lead the growth of the domestic advertisement market.

42 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 43 p 2016 , k Yearboo g (Unit：KRW 1 million) 1 (Unit：KRW Internet services, with Korea's % % and 36.5% of their profits from 5% 5% of total profit. Cheil Worldwide 2016 Advertisin [ Volume of Domestic Advertisement Market Total 93,854 95,893 96,477 107,270 108,832 111,651 Mobile 2,100 4,600 8,391 12,802 17,453 21,493 Internet 19,540 20,030 18,674 17,216 16,372 15,358 Billboard 9,105 9,645 9,362 10,051 10,091 10,268 ：estimate Magazine 5,076 4,650 4,378 4,167 3,780 3,662 Broadcast 36,072 35,712 34,880 42,281 39,999 40,345 Production 5,418 5,810 5,850 5,742 6,425 6,005 Online advertisement is the core revenue of companies providing Newspaper 16,543 15,447 14,943 15,011 14,712 14,520 p

representative search portals Naver and Daum Kakao earning 73.8 advertisements, respectively. Overall, advertisement takes up 6 * [Table 1-2-13] Category 2012 2013 2014 2015 2016 2017 2017 Korea Internet White Paper | Part 1 Industry and Service

3. Internet Service Convergence

A. IoT

IoT has been drawing attention as technology that will lead the future hyper-connected society, which enables users to exchange data in real-time by attaching a sensor onto everything, from people to things. In the case of Korea, Korean Communications Committee announced "Basic Plans for Machine to Machine Communications Infrastructure," to strengthen the global competitiveness of IoT and promote their services. Through this plan they aimed to identify a service model led by the public sector, develop core technology for machine to machine communications, promote domestic/international standardization, and revise related laws. Later in May 2014, the Ministry of Science and ICT (MSIT) presented "Basic Plans for Machine to Machine Communications" with the initiative to nurture 350 IoT SMBs (Small to Medium Businesses) and construct a creative and active IoT ecosystem. In the following October, they announced "IoT Security Roadmap" to realize the world's most secure nation, and in December, they announced plans to promote IoT R&D for both base technology and standardization. In December 2015, the government prepared a detailed strategy for the "Basic Plans for Machine to Machine Communications" through the "Strategy for a Leading K-ICT IoT Nation." Key strategies include financial support for businesses in key fields, reduction in development cost, and strengthening the infrastructures. A budget of KRW 250 billion has been allocated for this plan. Meanwhile, "Global IoT Private/Public Consultation Group," launched in May 2015 and "IoT Innovation Center" under KISA put continuous effort to build and promote an IoT ecosystem as a part of 3-year economic innovation plan and K-ICT strategy. Also, they are promoting the IoT ecosystem and export of SMBs through partnership between the government and the private sector.

B. Cloud

The NIST of US defines cloud computing as "a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage,

44 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix d ] 45 2015 , t men p pport Plans." To preemptively ’s and IT specialists. 2% increase from the previous previous the from increase 2% The The government established "First s necessary, and pay accordingly. ugh the "Act on the Development gulations gulations such as finance, medicine the vision of "Becoming a Leading Leading a "Becoming of vision the released with minimal management ices in November 2015, and presented r words, a cloud is a computing model ion is slow, because of concerns about 015 to 535 in 2016, 182 more businesses) will prepare a one-stop cloud procurement First Basic Plans for Cloud Develo

, MSIT [ ③Provide a safe environment for cloud computing clouds favor to regulations Review ④ ⑤ Support innovation of SMBs and industries ⑥Strengthen technological competitiveness of cloud computing services cloud of export Encourage ⑦ specialists cloud Nurture ⑧ centers data of competitiveness Strengthen ⑨ ① Encourage the public sector to use commercial use to sector public the Encourage ① cloud system cloud governmental to transition the Accelerate ② for a smart government ) Korea's cloud market is growing rapidly, but it is still base 3 Strategies and 9 Public Tasks First Plans for Cloud Development and Public Tasks Tasks Public and Development for Cloud First Plans 3. Createan ecosystem for growthof cloud industry 1. Preemptive implementation Preemptive 1. of cloud computing by the sector public 2. Expand cloud computing in the private sector 2016 Survey of Cloud Industry The volume of Korea's cloud market was KRW 1.19 trillion, a 55. a trillion, 1.19 KRW was market cloud Korea's of volume The Later the government established "2017 K-ICT Cloud Computing Su Korea started to officially support this form of computing thro year. Cloud businesses have also increased 51.6% (from 353 in (NIPA, 2 implement cloud computing in the public sector, the government system and demonstrate projects in fields of improving cloud and re education, and promote nationwide awareness targeted at CEO of Cloud Computing and Protection of its Users" in March 2015. [Figure 1-3-1] [Figure Basic Plans for Cloud Development (2016~2018)" with related off three strategies and nine tasks to be completed before 2018 for Cloud Nation by 2021" [Figure 1-3-1]. applications, and services) that can be rapidly provisioned and effort or service provider interaction." that enables (www.nist.gov) the user to In borrow its othe resources, expand as much a on IaaS. Businesses using clouds are increasing, but the expans 2017 Korea Internet White Paper | Part 1 Industry and Service

business associativity, cost, and security. Domestic businesses like KT (Iaas), Duzon Bizon (Saas), and Ecount (SaaS) are strengthening their hand in the market by increasing their cloud profit. Of all the package software businesses (207, over KRW 8 billion in profit), only 4.3% (Duzon Bizon, Hancom, and other seven) are providing SaaS, but the transition is rapid, as in the case of Handysoft, Knowledge Cube, Kaoni (Groupware), Forseers (Digital Document), Hancom (Office). Also, domestic Saas Companies are utilizing global IaaS like AWS to expand their customer pool to the international community.

C. Artificial Intelligence

2016 will be a milestone year in the history of artificial intelligence (AI). Until now, AI had been a thing of scientific fiction, but from 2016 it has become a reality for even the normal population. The trigger for this phenomenon was the "Google DeepMind Challenge Match" in Seoul, in March 2016. This did not just make a name for artificial intelligence. It brought AI into applications and services that people use in their daily lives. Alpha Go became a watershed in the history of AI. As Google shifted itself from a "mobile-first" company to an "AI-first" company, many domestic companies are following this trend. SK Telecom announced "We will become the best in AI technology in the international market, not just in Korea. We will focus all the technological powers and partnership of the group and its affiliated companies to AI." Naver and Daum Kakao as well have declared it their number one task. Naver announced that it will invest KRW 100 billion to AI. Daum Kakao's Kim Bum-soo became the representative for KakaoBrain, to lead the company's AI strategy. Also, domestic companies are participating in the AI platform competition. Naver introduced "Clova" at the Mobile World Congress (MWC) 2017, in Barcelona, Spain. Naver is also using the strategy to create a Clova ecosystem using the voice-recognition based AI secretary. For this, they presented Clova Interface Connect, and Clova Extensions Kit. Samsung acquired Viv Labs, an AI platform developer, in October 2016. Samsung voice-recognition AI assistant Bixby in Galaxy S8 was developed with this. Market intelligence provider IDC presented a report in November 2016 stating the AI system market will have a 55.1% annual average growth rate. The market size will grow from $8 billion in 2016

46 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 47 Tractica [ (Unit：$1 million) (Unit：$1 icted the domestic AI market . different fields, Korea's VR is VR and AR will market exceed sted it will be KRW 2.2 trillion on in 2025 [Figure 1-3-2]. er words, Korea has an advantage n n software, platform and contents. its infancy. There is much attention arch, but they all predicted that the n n concept, technology and ecosystem, o o be aware of a digitally constructed to reality, VR differs in that it creates creates it that in differs VR reality, to illion). illion). Tractica predicted the of volume the AI international 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 $ - bout KRW 55 tr $5,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 Global Artificial Intelligence Sales (2016~2025) Sales Intelligence Artificial Global There is not much research on the domestic AI market. MSIT pred Specific numbers vary greatly on which institution did the rese Virtual Reality (VR) refers to technology that enables people t Korea VR AR Industry Association anticipates that the volume of Yet the prevalent opinion is that Korea's VR AR industry is in will grow to about KRW 6.4 trillion by 2017, in and Digieco 2020, foreca KRW 11 trillion in 2025, and KRW 27.5 trillion in 2030 D. Virtual Reality D. [Figure 1-3-2] [Figure market will increase from $643.7 million in 2016 to $36.8 billi $36.8 to 2016 in million $643.7 from increase will market to to $47 billion in 2020 (a market will grow at a fast pace. fast a at grow will market reality. If Augmented Reality (AR) is about adding virtual data many from emerging are companies VR global while particular, In a 100% fictional situation. Yet they both have common grounds i and thus many see them as related markets. KRW 1 trillion in 2016, and reach KRW 5.7 trillion in 2020. to it, but not enough investment or content development. In on oth VR hardware, but has less competition in terms of applicatio 2017 Korea Internet White Paper | Part 1 Industry and Service

limited to games and 360°visual entertainments. Thus, there are voices that Korea first needs to build an environment for startup companies to enter the market, such as supporting content development. Building a safe environment and constructing an ecosystem for popularization are also important tasks. In 2016, the Ministry of Strategy and Finance, Ministry of Science and ICT, Ministry of Culture, Sports and Tourism, and Ministry of Trade, Industry and Technology have jointly set up plans to nurture the VR industry.

[Figure 1-3-3] Domestic VR Market Outlook (Unit：KRW 1 million)

57,271

40,028

27,999

19,601 13,735 9,636 6,768

20142015 2016 2017 2018 2019 2020

[MSIT, Korea VR AR Industry Association, 2015]

According to this, from 2016 to 2017, private and public sectors are planning to invest KRW 60 billion and promote the equal development of CPND like device, SW, contents and services, as well as dominating the platform. The government will select a growing VR field/platform to focus on and give it package support, including technology development, content development and export. It will also support large projects of VR-related industries such as construction, medicine, tourism, sports, and education/training. Also, it will support the discovery of new markets for VR-integrated contents. Furthermore, it will promote the development of base/applied technology as well as standardization and patents. It will establish an R&D roadmap for the development of technology necessary nurture the VR industry and create a VR ecosystem, and support the development of core technology such as VR/AR platform technology, spacial awareness, virtual object enhancement, and See-Through devices according to the roadmap. The plan includes creating a VR base and strengthening global competition. It will also nurture

48 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix 49 to build a VR cluster. industry nvigorate the VR industry. development. In addition, Nuri Dream cate the 3D/CG artists and art/creative art/creative and artists 3D/CG the cate structure like equipment, post-production majors on VR creation. It also supports strengthening the infra system and distribution necessary for VR filming, creation, and Square was created to support the residency of VR companies Finally, and the government also plans to ease the regulations to i specialists with technological or intellectual prowess, and edu 2017 Korea Internet White Paper | Part 1 Industry and Service

4. Internet Information Service

A. Search Engine

The QC (Query Count) of domestic search engines in December 2016 shows that Naver leads the PC search engine market with 75.3%, Daum (15.4%) and Google (7.4%) comes after. Naver and Daum's usage decreased by 1.7% and 0.9%, respectively, but Google's increased by 0.9%. Meanwhile, Zum, which had an 1.2% market share in 2014, had less than 0.1% in 2016.

[Figure 1-4-1] QC Market Share of Domestic PC Search Engine (Unit：%)

<2015. 12> <2016. 12>

Others 1.9% Google Google 6.5% 7.4% Daum Daum 16.5% 15.4%

Naver Naver 77.0% 75.3%

[KoreanClick, www.koreanclick.com]

In the mobile search engine market, Naver kept its ground while Daum's market share slightly decreased and Google's market share slightly increased. In December 2016, Naver's market share in the mobile search engine market was 75.3%, with Daum (16.1%) and Google (7.3%) following.

50 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 51 (Unit：%) www.koreanclick.com , Naver 75.3% "Facebook" (61.4%), Camp , female 65.4%), and for age age for and 65.4%), female , ek (average 2.8 per day) and our our each week. (1 to less than rage, an hour and three minutes d it within the past week. o less than 20 times" (15.1%). ars old used the Social Networking KoreanClick [ (91.5%) and the 30s (83.9%), 40s he users. Next followed "more than he "more users. followed Next 1%), "Naver Blog" (10.6%) followed. Google 7.3% Daum 15.4% Others 2.0% Naver 75.3% <2015. 12> <2015. 12> <2016. 6.2% Google Daum 16.1% QC Market Share of Domestic Mobile Search Engine Search Mobile of Domestic Share Market QC The The SNS usage for people over 6 years old was 19.6 times per we Meanwhile, the research showed that people used SNS for, on ave The most used SNS service was found to be "KakaoStory" (71.1%). According to KISA, 6 out of 10 (65.2%) Internet users over 6 ye The The SNS user demographic was similar for both sexes (male 65.0% 1)SNS 20 times" (30.4%), "5 to less than 10 times" (17.6%), and "10 t "10 and (17.6%), times" 10 than less to "5 (30.4%), times" 20 the answer "less than 5 times" was the highest, with 36.9% of t groups, of people in their 20s 36.9% had the highest with percentage of users (69.5%), highest, 6~19 years the old was (57.5%) followed. times" 5 than "less answer the every week, and 38.2% answered that they used it more than an h 2 hours: 21.4%, more than 2 hours: 16.8%) Mobile's "Band" (42.1%), "Instagram" (23.4%), "Naver Cafe" (11. Service (SNS) at least once within the past year, and 56.9% use 56.9% and year, past the within once least at (SNS) Service B. Communications [Figure 1-4-2] [Figure 2017 Korea Internet White Paper | Part 1 Industry and Service

[Figure 1-4-3] Weekly SNS Usage (Unit：%)

Average weekly SNS Usage 19.6 times more than less than 20 times 5 times 30.4 36.9

5 to less than 10 to less than 20 times 10 times 15.1 17.6

* SNS usage for people over 6 years old [KISA, 2016 Survey on Internet Usage, 2016]

[Figure 1-4-4] Weekly SNS Hours (Unit：%)

Average weekly SNS hours 1 hour 3 minutes 2 hours less than or more 15 minutes 16.8 31.0 38.2%

1 to less than 2 hours 21.4

15 to less than 30 minutes 14.2

30 minutes to less than 1 hour 16.5

* Internet users over 6 years old [KISA, 2016 Survey on Internet Usage, 2016]

2) Instant Messaging

According to KISA, over 92.5% of internet users over 6 years old have also used instant messaging within the past year. Meanwhile, 8 out of 10 (81.6%) used instant messaging "within past 24 hours." As for its usage rate, "less than average 10 times a day" took the majority (less than 5 times: 29.4%, 5 to less than 10 times: 24.1%). "More than 10 times a day" was 46.5% (10 to less than 20 times: 22.1%, 20 to less than 30 times: 11.1%, more than 30 times: 13.2%). Using "smartphones" for instant messaging was more than 90% for all age demographic, and as for "desktop," its rate was high for people in their 20s (34.0%) and 30s (28.3%). Meanwhile, messaging using "smartpad" was also relatively higher for people in their 20s (3.8%) and 30s (3.5%).

52 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] ] 53 2015 2016 2016 2016 , , 48.4 (Unit：%) (Unit：%) ge ge over over 70 36.1 80.3 72.3 92.5% on Internet Usa on Internet Usa y y 95.0 ed e-mail within the ed within past e-mail one 90.8 n n women (53.7%), and according Instant messaging users mplementary role even in the face 55.9% 55.9% of people had used it within 2016 Surve 2016 Surve 98.6 never used never 7.2

, , 97.0 KISA KISA [ [ 99.5 81.6 98.8 99.8 within past 24 hours past within 20s 30s 40s 50s 60s 99.6 82.5 81.2 years old years 92.0 90.8 ears old ears old y y 93.0 Instant Messaging Age and Gender Demographic Gender and Age Messaging Instant Last Used Instant Messaging Messaging Instant Used Last 1 week ~ 1 month 0.9 month 1 ~ 1 week 3 months ~ 1 year 1.0 1 year ~ 3 months 90.9 24 hours ~ 1 week 8.8 1 week ~ 24 hours 1 month ~ 3 months 0.2 92.5 All Male Female 6-19 disuse for more than 1 year 0.3 1 year than more for disuse 90.9 Traditional communication method of e-mail still retains its co According to KISA, the e-mail usage rate (rate of people who us who people of (rate rate usage e-mail the KISA, to According E-mail usage according to gender was higher for men (64.1%) tha (64.1%) men for higher was gender to according usage E-mail 3) E-mail of constant expansion of messengers and SNS. the the past 24 hours. year) was 59.1% among internet users over 6 years old, and the Internet users over 6 6 over users Internet * Internet users over 6 6 over users Internet * * 1-4-6] [Figure [Figure 1-4-5] [Figure 2017 Korea Internet White Paper | Part 1 Industry and Service

to age, the usage was 91.3% for people in their 20s, 85.5% for people in their 30s, and 70.2% for people in their 40s. 54.6% of e-mail users over 6 years old used e-mail at least once a week for personal reasons other than work ("at least once a day" 17.9%, and "at least once a week" 36.7%). Meanwhile, 8 out of 10 employees (81.7%) used e-mail for work, and among them 40.0% of people used it "at least once a day" and 39.4% people used e-mail "at least once a week."

[Figure 1-4-7] E-mail Usage According to Age and Gender Demographic (Unit：%)

2015 91.3 2016 87.8 85.5 82.3

70.2 64.2 64.1 64.8 59.2 59.1 53.9 53.7 42.0 44.7 40.6 37.7

19.4 12.6 10.7 5.7

All Male Female 6-19 20s 30s 40s 50s 60s over 70 years old

* Internet users over 6 years old [KISA, 2016 Survey on Internet Usage, 2016]

C. Contents

1) TV / Visual Media

Total revenues of domestic broadcast industry in 2015 was KRW 16,463 billion, 4.4% increased from the previous year's KRW 15,824.8 billion. Among them, IPTV had the highest growth with 28.3% from the previous year. The growth is due to more people registering for IPTV, and resulted in stunting the growth of cable broadcasting companies. Their revenues decreased 3.7% from last year.

54 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix

] y per 55 (KRW 1 (KRW million) 2016 Average Revenue , Employee s Statistic per (KRW 1 (KRW million) , the total revenue Average Revenue Company 2015 and making more 2015 Korean Content Industr W W 412.5 billion. The revenue (KRW 1 (KRW million) Revenue venue of internet VOD increased tent Agency, No. of (person) Employees illion, illion, a 7.6% increase from ----- 91 4,503 2,259,023 24,824 502 19 85 10,773 567 127 52 128 2,667 51 21 532 7,282 1,143,498 2,149 157 2016 Korean Movie Industry Report No. of (company) Companies IPTV 3 577 1,908,798 636,266 3,308 Station IPTV CP IPTV 26 - 265,486 10,211 - Sub-total 1Sub-total 340 29 549,612 549,612 577 1,617 2,174,284 74,975 3,768 Sub-total 71Sub-total 14,378 4,111,452 143 57,908 4,631 286 2,261,690 15,816 488 Multimedia Multimedia BroadcasterBroadcaster 52 14,293 4,100,679 78,859 287 Independent Independent Satellite Digital Digital Satellite Comprehensive Broadcast Relay Program Provider Program Program ProviderProgram 178 15,170 6,222,446 34,958 410 Mobile Multimedia Cable Broadcaster Broadcasting (DMB) Satellite Broadcaster Satellite 1 340 549,612 549,612 1,617 Total 954 42,378 16,462,982 17,257 388 Category Average Revenue Per Broadcasting and Company Employee (2014) Cable TV According to the Korean Film Council's Production for Internet for Satellite TV Satellite Terrestrial TV Terrestrial The revenue for the digital online market increased 23.2% to KR to 23.2% increased market online digital the for revenue The for TV Channel [Ministry of Sports, Culture and Tourism and Korea Creative Con Creative [Ministry Korea and of Sports, Tourism Culture and of IPTV and digital cable TV (TV VOD) increased by 28.3% and by re 16.7%, leading the overall growth of the industry. than KRW 2 trillion a year since 2014. since year a for trillion the 2 Korean film industry was KRW 2,273 KRW b than [Table 1-4-1] Program Production Program Production Independent ProgramIndependent 2017 Korea Internet White Paper | Part 1 Industry and Service

[Table 1-4-2] Revenue of the Online Digital Market within the Movie Industry (Unit : KRW 100 million, %)

2012 2013 2014 2015 2016

Division1) 1-Year 1-Year 1-Year 1-Year 1-Year Revenue Growth Revenue Growth Revenue Growth Revenue Growth Revenue Growth Rate(%) Rate(%) Rate(%) Rate(%) Rate(%) IPTV and Digital 1,310 44.0 1,737 32.6 2,254 29.7 2,609 15.7 3,347 28.3 Cable Internet VOD (Mobile+N 618 23.4 729 18.0 499 -31.5 582 16.7 679 16.7 Screen) Package 230 -22.8 210 -8.7 218 3.0 158 -27.4 99 -37.3 Total 2,158 26.3 2,676 24.0 2,971 11.0 3,349 12.7 4,125 23.2

[Korea Film Council (KOFIC), 2016 Korean Movie Industry Report, 2017]

2) Animation

According to the 2016 Korean Contents Industry Statistics by Ministry of Sports, Culture and Tourism and Korea Creative Content Agency, 376 businesses and 4,728 employees were in the animation industry. The total revenue was KRW 610.2 billion, gross value was KRW 218.2 billion and value added ratio was 35.8%. Exports amounted to $126.57 million and imports amounted to $7.01 million. As works of commercial success emerged, revenues for animation creation increased and so did the number of 2D animation subcontracts, which used to be the core of the animation industry. As a result, there was a high increase in the overall revenue of the animation industry. The number of animation businesses increased from 341 in 2011 to 376 in 2015, and grew 2.5% annually in the last 5 years. The revenue grew 3.7% annually, from KRW 528.6 billion in 2011 to KRW 610.2 billion in 2015. Gross value decreased 1.6% compared to the previous year, and has decreased 0.6% annually.

1) * IPTV and Dital Cable TV(TV VOD)：VOD service platform using set-top box e.g. KT Olleh TV, Digital Cable TV etc. (includes some mobile revenues) *internet VOD： PC and mobile-based VOD service platform / web-cloud sites e.g. Naver N Store *Package：Revenues for DVD and Blu-ray

56 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix

] y 57 Import (1,000$) 2016 , s Statistic Export (1,000$) r business with KRW RW 1,225 million, and the the and million, 1,225 RW (%) 6 6 million as average revenue 2015 Korean Content Industr Ratio Value Added tion, the averages revenue was e highest revenue per business highest sales per employee with b-category, animation production er employee with KRW 71 with million. KRW er employee e e was 516 KRW million per business tent Agency, Value Gross (KRW 1 (KRW million) (KRW 1 (KRW million) Revenue (people) Employee 7.4 5.0 8.9 -1.6 - 9.4 2.7 2.5 0.4 3.7 -0.6 - 2.2 0.4 Business (company) illion. Animation distribution and distribution PR had illion. the Animation pe revenue lowest Domestic Animation Industry 2011 341 4,646 528,551 223,109 42.2 115,941 6,896 2012 341 4,503 521,005 219,999 42.2 112,542 6,261 201320142015 342 350 4,502 4,505 376 560,248 520,510 221,750 4,728 219,232 39.6 610,175 42.1 115,652 218,202 109,845 6,825 6,571 35.8 126,570 7,011 Rate(%) Category In terms of the third-level category, animation creation had th The average revenue per company in the animation industry was K per employee. As for animation distribution, the average revenu and KRW 147 million per employee. For online animation distribu KRW 764 million per business and KRW 95 million per employee. had KRW 1,341 million as average revenue per business and KRW 9 KRW and business per revenue average as million 1,341 KRW had average sales per person was KRW 97 million. In terms of the su KRW KRW 212 m with KRW 1,523 million, and online animation production had the 1,523 and production million, with KRW online animation 516 million, and animation subcontract had the lowest revenue p 1-Year Growth Growth 1-Year Growth Rate(%) Annual Average [Ministry of Sports, Culture and Tourism and Korea Creative Con Creative Korea [Ministry and of Tourism Sports, Culture and [Table 1-4-3] 2017 Korea Internet White Paper | Part 1 Industry and Service

[Table 1-4-4] Average Revenue of the Animation Industry per Business and Employee (as of 2015)

Average Average Revenue No. of No. of Revenue Revenue per per Sub-Category Third-level Category Businesses Employees (KRW 1 Business Employee (company) (person) million) (KRW 1 (KRW 1 million) million) Animation Creation 192 2,652 292,353 1,523 110 Animation Subcontract 110 1,748 124,245 1,130 71 Animation Online (Internet/Mobile) Production 16 47 9,964 623 212 Animation Production Sub-total 318 4,447 426,562 1,341 96 Animation Animation Distribution, 41 144 21,152 516 147 Distribution and PR Online Animation Online Animation 17 137 12,984 764 95 Distribution Service (Internet/Mobile) Total 376 4,728 460,698 1,225 97

[MSCT and KOCCA, 2016 Korean Content Industry Statistics, 2017]

3) Music

According to the 2016 Korean Content Industry Statistics, there was a total of 36,770 businesses and 77,490 employees in the music industry. Total revenue amounted to KRW 4,975 billion, gross value amounted to KRW 1,880.7 billion, and value added ratio was 36.4%. Total exports amounted to $ 381.02 million and imports amounted to $13.4 million.

[Table 1-4-5] Revenues of Online Music Distribution Businesses (Unit：KRW 1 million)

Annual Growth Rate Average Category 2013 2014 2015 Share (%) From 2013 Growth Rate (%) (%) Internet/Mobile Music 881,207 995,260 1,136,983 22.9 14.2 13.6 Service Digital Music Broker 97,694 102,632 107,732 2.2 5.0 5.0 Internet/Mobile Music Content Production and 80,186 81,156 83,310 1.7 2.7 1.9 Distribution (CP) Total 1,059,087 1,179,048 1,328,025 26.7 12.6 12.0

[MSCT and KOCCA, 2016 Korean Content Industry Statistics, 2017]

Digital music, in particular audio streaming, is becoming the norm for music consumption, because

58 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] cal Imports ($1,000) 59 2017 illion. illion. , s Statistic Exports y ($1,000) (%) Value llaboration with AI speakers. y had 13,884 businesses and other device or digital player. o was 47.1%. Added Ratio 2.2 2.2 billion, and KRW surpassed quickly, and music is considered audio streaming service through to be kept in mind. Meanwhile, sic is considered a crucial industry. rate in 2015, the net exports also % and recorded $ 3,214.62 million, million, 3,214.62 $ recorded and % 7.2% 7.2% and reached $ 177.49 m by Ministry of Sports, Culture and and Culture Sports, of Ministry by tistics on the industry. This is a 7.5% 7.5% a is This industry. the on tistics (KRW 1 (KRW million) 2016 Korean Content Industr

, Gross Value Gross (KRW 1 (KRW million) Revenue MSCT and KOCCA and MSCT [ from IFPI shows, digital revenues have finally surpassed physi (person) Employee -4.1 -7.9 7.5 7.1 - 8.1 7.2 -5.5 -4.1 5.0 4.8 - 7.8 -3.5 2016 Korean Contents Industry Statistics Business (company) Domestic Game Industry Status Industry Game Domestic Global Music Report 2011 17,344 95,015 8,804,740 4,184,893 47.5 2,378,078 204,986 2012 16,189 95,051 9,752,538 4,568,089 46.8 2,638,916 179,135 201320142015 15,078 14,440 91,893 13,844 9,719,683 87,281 80,388 9,970,621 4,545,896 10,722,284 5,047,597 4,711,118 46.8 2,715,400 47.1 47.3 172,229 3,214,627 2,973,834 177,492 165,558 Rate (%) Category According According to the 1-Year Growth Growth 1-Year The most exciting change in the recent music industry is the co As the AI speakers are launched for the first time in Korea, mu Annual Average Growth Rate (%) 4) Game in this way anyone can listen to music with smartphones without As the 2016 With the development of AI and IoT, new platforms are emerging emerging are platforms revenues in new 2015. IoT, and AI of development the With a content to be readily applied to new platforms. KT's "GiGA genie" speaker and SKT's "NuGu" speaker is providing "genie music" and DaumKakao's "melon," respectively. [Table 1-4-6] Tourism and Korea Creative Content Agency, Korea's game industr 8,338 employees as of 2015. Total revenue amounted to KRW 10,72 10 trillion for the first time since they started to gather sta increase increase from the previous year. The exports also increased 8.1 increased compared to 2014. Yet, the increase in imports needs needs imports in increase the Yet, the opening $ 3 billion era. exports also by Imports increased 2014. to Since the export growth compared rate was larger than the import growth increased gross value amounted to KRW 5.475 trillion and value added rati 2017 Korea Internet White Paper | Part 1 Industry and Service

Game production and publication took up 84.1% of all the game industry revenue with KRW 9,016.1 billion. On the other hand, game distribution was 15.9% and its sales was KRW 1,706.1 billion. Game production and publication grew 6.2% annually for the last 3 years, proving continuous growth. The growth for game distribution business, however, is fluctuating. In 2015, the revenue increased compared to 2014, but is still lower than the revenue of 2013.

[Table 1-4-7] Revenue per Business in the Game Industry (Unit：KRW 1 million, %)

1-Year Growth Category 2013 2014 2015 Rate Online Games 5,452,283 5,542,468 5,280,353 △4.7 Mobile Games 2,327,680 2,913,646 3,484,406 19.6 Game Production Video Games 93,617 159,806 166,091 3.9 and PC Games 37,967 33,668 37,861 12.5 Publication Arcade Games 82,492 52,848 47,428 △10.3 Sub-total 7,994,039 8,702,436 9,016,139 3.6 Internet Cafe Business 1,661,800 1,227,696 1,660,400 35.2 Game Arcades 63,844 40,489 45,745 13.0 Distribution Sub-total 1,725,644 1,268,185 1,706,145 34.5 Total 9,719,683 9,970,621 10,722,284 7.5

[MSCT and KOCCA, 2016 Korean Content Industry Statistics, 2017]

5) e-Learning

According to the National IT Industry Promotion Agency (NIPA)’s 2016 e-Learning Industry Status Survey the growth for the 2016 domestic e-learning sales have been relatively stagnated, only 0.1% increase from last year with KRW 3,487.5 billion. Of all the e-learning industry revenue, service businesses take up 69.8%, or 2 out of 3, and then content (20.2%) and solution (9.9%) follows. In the case of content and solution, their sales decreased from 2015.

60 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] ] 7 61 2017 2017 , , ) ) 1-Year Growth Rate Reconstructed Reconstructed ( (

(Unit：KRW 1 million, %) million, 1 (Unit：KRW y y (Unit：KRW 100 million, %) million, 100 (Unit：KRW ted based on the spendings 1,581.6 billion, 0.2% higher nly KRW 8.9 billion more than than more billion 8.9 KRW nly se in 2015. ports ports was $29.35 million and ted to KRW 919.4 billion, the the billion, 919.4 KRW to ted gs. 224 billion, or 6.5%. Their share in 2015, 8,145 businesses and ional institutions spent KRW 171.8 KRW 1,451.4 billion, 42.3% of the the of 42.3% billion, 1,451.4 KRW Public Sector Total Status Surve Status Surve y y Industr Industr g g Institution Educational 2016 e-Learnin 2016 e-Learnin

, , NIPA NIPA [ [ 2016 Korean Contents Industry Statistics 2014 2015 2016 Revenue of e-Learning Service Providers e-Learning by Consumers Individual Business Revenue Share Revenue Share Revenue Share 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 Individual customers took up 46.1% of the market, spending KRW According According to MSCT's The 2016 domestic market according to consumer category, estima A) Webtoon 6) Web 6)Contents Web in the market is small, but it is an increase from 2014 spendin 2014 from increase an is it but small, is billion, or 5.0%, and government/public market institutions spent KRW the in than than the previous year. Businesses are estimated to have spent they Together, market. spent of 88.4% the entire Educat market. 2015. This is a large disparity from the KRW 274 billion increa billion 274 KRW the from disparity large a is of e-learning consumer pool, amounted to This KRW 3,428.7 billion, o 2015. a much less amount of $6.72 million was imported. was million 13,000 $6.72 employees were in the comics industry. of The revenue amoun amount gross value was 362 less billion and value added much ratioa was 39.4%. Ex Total 32,141 100.0 34,851 100.0 34,875 100 0.1 [Table 1-4-8] [Table 1-4-9] Service 22,650 70.5 24,491 70.3 24,750 69.8 1.1 Content 6,457 20.1 6,894 19.8 6,789 20.2 -1.5 Solution 3,034 9.4 3,466 9.9 3,336 9.9 -3.7 Share 46.1 46.1 42.4 42.3 5.0 5.0 6.5 6.5 100 100 Category Spending 15,778 15,816 14,498 14,514 1,695 1,718 2,227 2,240 34,198 34,23 Category 2017 Korea Internet White Paper | Part 1 Industry and Service

[Table 1-4-10] Domestic Comics Industry

Value Revenue Gross Value Business Employee Added Export Import Category (KRW 1 (KRW 1 (company) (person) Ratio ($1,000) ($1,000) million) million) (%) 2011 8,709 10,358 751,691 307,558 40.9 17,213 3,968 2012 8,856 10,161 758,525 313,877 41.4 17,105 5,286 2013 8,520 10,077 797,649 322,569 40.4 20,982 7,078 2014 8,274 10,066 854,837 336,854 39.4 25.562 6,825 2015 8,145 10,003 919,408 362,028 39.4 29,354 6,715 1-Year Growth -1.6 -0.6 7.6 7.5 - 14.8 -1.6 Rate (%) Annual Average -1.7 -0.9 5.2 4.2 - 14.3 14.1 Growth Rate (%)

[MSCT and KOCCA, 2016 Korean Content Industry Statistics, 2017]

In 2015, 13.5% of the gross revenue came from domestic online comics production and distribution at KRW 123.9 billion, with 23.5% annual average increase since 2013's KRW 81.2 billion. Among these, internet comics service was highest with 59.6% and grew 58.5% compared to the previous year. The sales and market share of internet/mobile comics content production and publication(CP) are decreasing each year, marking KRW 21.6 billion (21.3%) in 2014 and KRW 25.6 billion (20.6%) in 2015.

[Table 1-4-11] Revenue of Online Comics Production and Distribution Businesses (Unit : KRW 1 million)

Annual Market 1-Year Average Category 2013 2014 2015 Share Growth Growth (%) Rate (%) Rate (%) Internet/Mobile Comics Content Production and 18,017 21,564 25,578 20.6 18.6 19.1 Distribution (CP) Internet Comics Content 46,641 59,482 73,852 59.6 24.2 25.8 Service Mobile Comics Content 16,566 20,153 24,458 19.7 21.4 21.5 Service Total 81,224 101,199 123,888 100.0 22.4 23.5

[MSCT and KOCCA, 2016 Korean Content Industry Statistics, 2017]

62 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 63 2017 y, (2015), visual web content illion views. moticon and emoji usage is ts, Internet-based web-drama as of 2nd week of Ma week of 2nd as e epitome of "snack culture," ave made its way into popular r has created a page dedicated , webtoons are also being actively ne of the web-drama platforms 3 to 23 in 2014, and 67 in 2015. s well as those of popular celebrities like web-drama and web animation. s to produce and distribute their work ConsTV uitable uitable for Internet or mobile media [ ame ame characters, toys, stationary, cosmetics Trend and Plans for Visual Web Content Web-Drama Accumulative Ranking Accumulative Web-Drama As As the communication online or through smartphones increases, e As As the patterns of media consumption changes for the young adul 1 Heart ofYour Sound The OpenAir On 2016.11.07 ~ 41,289,661 7 Bank Choco 6 Air On ~ 2016.02.15 12,132,084 2Physique Positive 6Air On ~ 2016.10.31 39,526,378 345Jeon Do for Falling Door Next EXO You I Order 6 16Air On ~ 2015.10.26 16 2015.05.28 ~ 2015.04.09 35,071,717 21,222,499 Air On ~ 2015.07.05 15,870,606 68 Splash Splash LOVE9 Broke We Up First Kisses Seven 10 8 2015.12.10 10 On Air ~ 12,750,758 Air On 2016.12.05 ~ 2015.06.29 On Air~ 11,360,587 11,755,514 10Ring the of Queen OpenAir On ~ 2017.03.09 11,251,647 After the first web-drama Love in Memory by Kyobo in 2013, Nave C) Character B) Web-Drama produced. According to KOCCA's is continuously on the rise, and dramas based on web-novels and culture. It is expanding beyond emoticons into stuffed dolls, g or popular business. webtoon characters, mobile SNS emoticon characters h character the and lifestyle brands. In addition, emerging markets for encouraging creator is also growing. As the usage for characters as emoticons grows, a grows, emoticons as characters for usage the As growing. also Rank Title Episodes Period Views refers to a series of video episodes within ten or so minutes s minutes so or ten within episodes video of series a to refers rather than TV. Naver TV Cast. Recently, popular web-dramas even have over 10 m 10 over have even to web-drama in 2013 and is actively investing in web-dramas web contents popular and has experienced a growth in quantity, with Recently, 7 created in 201 From late 2015 Cast. to early 2016, TV 110 web-dramas were uploaded to o Naver With ten or so minutes of running time, web-drama has become th [Table 1-4-12] 2017 Korea Internet White Paper | Part 1 Industry and Service

D. Internet Media

1) IPTV

IPTV legally belongs to the pay TV category. In the past couple of years, IPTV users have continually increased, thus increasing sales. In 2013, revenue increased 33.5% from the previous year. Its high growth rate is letting it catch up with cable TV. The 5.75 million difference between cable TV households and IPTV households in late 2014 decreased to 3.03 million in August 2015. In 2016, the number of households registered for IPTV increased to 13.59 million and its share in the pay TV industry went up to 44.7%. In 2017, the growth stagnated due to the market being saturated, but number of subscriptions are still going up because of subsidiaries and brand competition. According to the Broadcasting Market Competition Survey, a total of 30.85 million households were registered to a broadcaster, and households using IPTV or satellite broadcasting were over half of this number at 16.34 million households.

[Figure 1-4-8] IPTV Subscribers (2009~2016) (Unit：million people)

15 LG U+ 60 SK Broadband KT 44.7 50 12 Market Share 42.7 39.1 33.9 40 9 27.8 30 22.5 6 17.4 20 11.8 3 10

0 0 20092010 2011 2012 2013 2014 2015 2016

[MSIT (2016), Meritz Securities Co. (2017)]

2) Mobile OTT

Change in Online/Mobile Video Trend by KOCCA shows that people spent an hour and seven minutes watching broadcasting media other than TV. This is a 10 minute increase from 2013. As for the pay TV mentioned with IPTV, SK Broadband offers an OTT service; the former Hoppin and B tv Mobile re-branded into the platform Oksusu. With 18 sports channels, 15 sports-related

64 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix

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is Thus LBS Location 3) Smart TV VOD categories, it has become the largest sports channel OTT in OTT it the channel sports largest has categories, become VOD edge as an individual vertical platform through various collaborations. its mobile entertainment program created in collaboration with JTBC, has gained popularity. singularly It provides the also competitive content. with new Multi-Channel Networks like " presented that presented they will 200 subsidize million KRW to invigorat a base infrastructure for related industries through "Smart TV in 2016. This project will support the development Smart TV app TV TV sells VOD and live channels as one market package for Smart TV platform is and a different holds story from the an mark uppe including Smart TV, IPTV, Cable TV. The project is for app serv entertainment, education, public service, health, lifestyle, an

n and and other strengthened it o global portable security wired/wireless the E. 2017 Korea Internet White Paper | Part 1 Industry and Service

The LBS market has been steadily growing hand in hand with the rapidly expanding smartphone market since 2010. In 2016, there were 180 registered location information providers and 936 location based service providers, and the number is growing every year.

[Table 1-4-13] Permit Issued / Registration of Domestic LBS Providers (As of 2016)

Category 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Location Information 19 29 36 48 57 74 84 97 114 132 155 180 Provider Location-Based 66 88 107 119 148 202 414 551 676 738 848 936 Service Providers Total 85 117 143 167 205 276 498 648 790 870 1,003 1,116

[KCC, 2016]

F. Big Data Service

Big Data refers to a set of data that is extremely large, to the extent that its storage, management and analytics in traditional ways present significant challenges. Its concept is continuously evolving to include harnessing meaningful information and providing useful insights through the data. It is considered a crucial agenda in the face of the Fourth Industrial Revolution. The Fourth Industrial Revolution is the fundamental change in the industrial structure set off by increased productivity through intellectualization of machines, and "data" is emerging as the fundamental material and means to achieve machine intelligence. With better Big Data awareness by companies, increased investment by companies with more than KRW 100 billion in revenues, and strong wish by the government to foster Big Data industry, the domestic Big Data market has grown 31.1% compared to the previous year, to KRW 343.96 billion.

66 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] ] 67 2016 2016 , y y, (Unit：KRW 100 million) 100 (Unit：KRW (Unit：KRW 100 million, %) million, 100 (Unit：KRW Reference 31% 3,440 nications nications companies and raised its share in the market increased increased market the in share its rket with its 43.1% increase from rket with its increase 43.1% Data Market Status Surve Data Market Status Surve g g uence in the market by 3%p, to 29%. stage and does not have a large growth growth large a have not does and stage 2016 Bi 2016 Bi

), ), Service (223 cases) 2015 30% Production, Finance, Distribution/Service, Service Medical Telecommunications, Analysis of Service Big Data Revenues Analysis on Big Data businessDataperformanceAnalysis Bigby on sector government/public Analysis of Big Data Investment of 874 domestic domestic 874 of Investment Data Big of Analysis companies 2,623 NIA NIA ( ( - Big Data performance from Public ProcurementPublic from performance Data Big -

y y enc enc g g A A y y 2014 22% 2,013 Volume 2016 Market2016 2013 2016 1,643 National Information Societ National Information Societ [ [ Sub-total 2,441.0 2016 Market Volume for Big Data According to Market Domestic Big Data Market Volume Total 3,439.6 Category Big Data Analysis Service Service Analysis Data Big 162.6 Big Data System Investment System Data Big 2,278.4 In terms of the private sector, it is still in its introductory its in still is it sector, private the of terms In By market category, investment by the public sector lead the ma Government/Public Sector Government/Public 998.6 [Table 1-4-14] [Figure 1-4-9] [Figure potential. However, due to demand from large financial or commu awareness, the volume increased 26.7% to KRW 244.1 billion and by 71%. the previous year to KRW 99.86 billion. This increased its infl Sector Private 2017 Korea Internet White Paper | Part 1 Industry and Service

G. Mobile Application

Domestic and International application market is still showing continuous growth. In particular, app service is growing together with game content, lifestyle/home assistant, and artificial intelligence as well as newly emerging O2O, VR, AR, Fintech, and other markets. Statistically, app services in Korea are growing by more than 13% every year, and it is reported that the gross revenue has reached KRW 8,705.3 billion. According to 2016 Korea Wireless Internet Industry Survey, Google accounted for 58.2% of the domestic app market revenue, Apple's Appstore followed with 26.4%, and domestic store accounted for 11.8%. The pattern in the market share is expected to continue in 2017. It is expected that Google and Apple will earn KRW 5.3 trillion and KRW 1.8 trillion, respectively, in app revenue in 2017. A recent change to the domestic app market is the emergence of "ONE store." The domestic store in the app market from the previous statistics is based on the ONE store, a collaboration by the top three telecommunication companies and a domestic web portal. It is an effort to compete against international app stores and make the store experience more comfortable by uniting the entire population to one store.

[Table 1-4-15] Revenue of Domestic App Market by Store (Unit：KRW 100 million, %)

Category 2015 2016(P) 2017(P) Revenue 39,130 44,656 53,248 Google Play Share 58.0% 58.2% 61.2% Revenue 18,473 20,206 18,869 Apple App Store Share 27.4% 26.4% 21.7% Revenue 7,563 9,040 11,779 ONE store Share 11.2% 11.8% 13.5% Revenue 2,311 2,766 3,157 Etc. Share3.4%3.6%3.6% Total 67,477 76,668 87,053

* p：estimate [2016 Korea Wireless Internet Industry Survey]

In Korea, the most downloaded app was shopping app. According to the survey results by DMC Media, 63.9% of people answered they had downloaded shopping apps. Other much used apps were

68 App etc.) Reward (Cash Slide, Hana Screen, Hana 1.7 1.6 1.8 1.6 1.9 2.1

Part 1 Industry and ServicePart 2 Utilizationetc.) Part 3 InfrastructurePart 4 International CooperationAppendix Weather forecast, (weather 1.6 1.6 1.5 1.4 1.4 1.9 etc.) Music (music streaming, 1.8 2.0 1.6 1.4 1.9 2.3 etc.) ] Comics (webtoon, 69 2.0 2.1 1.9 1.9 2.1 1.9 1.7 Media andVideo radio, etc.) radio, (TV, movie, 2.5 2.5 2.5 2.2 2.6 2.5 1.6 etc.) (food Lifestyle delivery, restaurant information, 1.8 2.5 2.6 2.2 2.3 2.1 3.3 etc.) 2.0 (mobile messenger, Communication 2.5 2.7 2.2 2.1 2.7 2.7 2016 Smartphone App Usage 2.5 Page and Band are overused, etc.) (edit, Picture camera, ame ame time. 3.3 2.8 3.8 3.1 2.6 4.0 2.5 etc.) News/ (news, magazine, Information FinTech and financial apps. Also, survey 2.5 2.8 2.8 2.9 2.7 2.8 3.0 [DMC Media, Media, [DMC etc.) 8 out of 10 answered they used communications (public 3.3 subway, transportation, Transportation 3.1 3.0 3.1 3.1 2.9 3.4 2.8 etc.) (flight reservation information, reservation, 3.5 3.3 3.4 3.4 3.8 3.9 3.1 Game Travel 3.5 3.6 3.6 3.6 3.1 3.8 4.0 etc.) SNS, Social 3.6 Contents (community, Internet Cafe 3.8 3.8 3.8 3.5 3.9 3.9 3.8 4.6 4.5 4.7 3.5 5.0 etc.) social Shopping commerce, (marketplace, 4.9 4.6 4.7 4.5 4.1 4.8 5.0 5.0 etc.) /Security (account credit card, credit book, bank, book, 4.7 Installed Apps by Category (n=321) Category by Apps Installed 3.1 3.1 3.2 2.9 3.2 3.4 3.1 Average Financial (86) (96) (139) (321) (209) (112) Case 50s 20s 40- male female All Gender Age and Age Age 30s and transportation apps. Recently, the competition is high for 1-4-10] [Figure game, game, social, finance, and apps. transportation In particular, showed that communications apps like Facebook, KakaoTalk, Kakao but in reality a small number of people are using them at the s Gender 2017 Korea Internet White Paper | Part 1 Industry and Service

5. Internet Service in the Public Sector

A. Services for the General Public

The integrated administrative service starting from 2016 offers a variety of administrative services in one site, better notifying the public of governmental services and making them more convenient to use. From this year to year 2018, the services will be opened one by one, starting from "minwon24," "information disclosure portal," and "allyeodeulim-e" (customized information service). The customized integrated service starting from 2014 aims to integrate and manage services provided by the central government, municipal governments and public institutions and offer them to the public according their specific needs. Accordingly, public services provided by the central government, municipal governments and public institutions will be integrated into one system where they can be registered, changed, or searched by their categories. The services will be customized to each citizen's life cycle such as marriage, birth/childcare, education, employment, work, and death. Offline, there is an information desk that can offer service availability as well as total care on whatever needs the citizen has if the citizen hands in an application for the service with their personal information in a nearby community center. Online, Korea's government portal site (www.korea.go.kr) will provide customized information according to one's situation, preference or selected category. Until now, there was the problem of missing the golden time in case of an emergency due to the wide variety of emergency numbers as well as the time lost on acknowledging the location and specification of the event. Due to accidents getting more complex and diverse, the cooperative actions of related public institutions are essential in solving problems. The government has simplified the emergency number from 21 different categories to the current system of disaster (119), crime (112), and administrative complaint/counseling (110). This has constructed a cooperative response system that can minimize the confusion in case of a reported emergency, reduce the time to receive the call for assistance, and strengthen on-site response. The Safe Korea Portal site (www.safekorea.go.kr) operated by Ministry of Public Safety and Security offers information on various disasters including guidelines in case of a disaster, safe shelters, flood insurance, and damage reports, etc. This system was created to gather all the disaster related information into one place, solving the problem of information being scattered over different sites. Therefore citizens

70 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix 71 ation to provide efficient service to ation efficient provide formation formation services are provided lso digitalized for a transparent ion, education/seminar/exhibition service that links related agencies improving corporate-related processes registration, trial, and publishing of be provided by separate agencies, are are agencies, separate by provided be ctory construction and the likes. Also, ly improving the average time and cost the government digital allows the processing government disclosure. Through this process, companies The government promoted G2B (Government to Business) informatiz Typical examples are the provision of an integrated information B. Services for the Private Sector can receive related services more conveniently and quickly. now now combined for convenience. Moreover, comprehensive policy in of all patent administration tasks such as filing, examination, and and to support the enhancement of corporate competitiveness by received standardized and simplified civil business. affairs forms, large doing of so that the administrative procedures for business startups, fa logistics, trade, and customs clearance services, which used to to SMBs through SMB portal site, which includes policy informat information and online counseling. The procurement administration process and civil is service. a Also, through patent service, industrial property rights. and services, including licensing and approval and information 2017 Korea Internet White Paper | Part 1 Industry and Service

[Table 1-5-1] Internet Services for Enterprises in the Public Sector

Service Website Service Content ∙ Corporate support portal that offers information on civil Government for G4B service, business changes, possible problems, and financial Business (www.g4b.go.kr) support throughout the whole corporate activity period National Logistics ∙ User-centric logistics information service that collects, Information Center integrates, and offers independently existing ground, (www.nlic.go.kr) marine, and air logistics ∙ Service supporting the provision of comprehensive marine Shipping and Port and port logistics information, and the joint utilization of Integrated Data Center information among main maritime logistics agents and their National (www.spidc.go.kr) Logistics/Trade cooperation Information ∙ E-trading service capable of processing the overall trading uTradeHub Linkage/Integration businesses from marketing, trading, logistics, customs, and (www.utradehub.or.kr) foreign currency exchange ∙ Electronic customs clearance service and the Internet- UNI-PASS based import/export customs reporting system that (unipass.customs.go.kr) supports the customs report submission, approval, customs payment and refund, and requirement verification ∙ Comprehensive information provision service for SMBs on SMB Policy Bizinfo SMB support, SMB policy, business guide, and consulting Information Service (www.bizinfo.go.kr) for comprehensive civil affairs ∙ Single window service for national, comprehensive Comprehensive Korea Online three-step procurement where the user can handle and e-Procurement E-Procurement System verify entire government procurement services, from Service (www.g2b.go.kr) bidding, contract conclusion, inspection, and payment over the Internet Korea Intellectual ∙ Service for general patent-related businesses, including Patent Information Property Office online applications for patent registration and inquiring of Service (www.patent.go.kr) progress information

[Agency-specific Services Websites for Companies (Reconstructed), 2016]

72

Part 2 Utilization

1. Internet Usage

2. Internet Environment 3. Internet Security 2017 Korea Internet White Paper | Part 2 Utilization

1. Internet Usage

A. Individual and Household

According to an internet usage survey conducted by the MSIT and KISA, internet usage of population over 3 years old was 88.3%, a 3.2% increase from the previous year. The number of internet users is continuously increasing, with 43.3 million this year (an increase of 1.696 million people). Meanwhile, the internet usage of senior citizens over 60 years old was 51.4%, and the number of users was 5.053 million people, each 11.9% and 1.35 million increased from last year, making it more than a half of the senior citizens now using Internet.

[Figure 2-1-1] Pattern in Internet Usage and Number of Internet Users (over 3 years old) (Unit：%, 1,000 people)

Number of Internet Users 41,94043,636 Internet Usage 40,080 41,118 37,010 37,180 38,120 34,910 35,590 36,190 36,580 31,580 33,010 29,220 85.1 88.3 26,270 82.1 83.6 24,380 77.8 78.0 78.4 74.1 75.5 76.5 77.2 70.2 72.8 19,040 65.5 56.6 59.4 44.7

2000 2001 2002 2003 20042005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

* Included mobile Internet from 2004, and the definition of "Internet users" changed from "used average once a month" to "used Internet in the past month." * From 2006, expanded the survey target to population over 3 years old (2000-2001 : population over 7 years old, 2002-2005: population over 6 years old) [KISA, 2016 Survey on Internet Usage, 2016]

89.8% of population over 3 years old have experienced the Internet at least once, and 88.3% experienced it "within the past month." 88.4% and 88.5% have experienced it "within the past 3 months" and "within the past year," respectively.

76 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] ] 77 2016 2016 , , (Unit：%) (Unit：%) ge ge Users in 2015 in Users 2016 in Users 2015 in Usage 2016 in Usage on Internet Usa on Internet Usa y y Surve e the female Internet usage was ng ng Internet (100.0%). 99.9% of

85 million for men and women, , 85.6 21,185 Used Internet Used 88.3% ExperiencedInternet 89.8% % % for men and 48.5% for women, 60s, making it 74.5%, and an 8%p 8%p an and 74.5%, it making 60s, ple ple in their 40s which used Internet, 2016 Surve KISA

high increase in Internet usage among [ , 81.9 20,185 KISA [ 81.3 10.2 Within past 24 hours 24 past Within Never used Never 5.8 91.0 22,451 Male Female 88.4 21,755 Male/Female Internet Usage and User Count (over 3 years old) Recent Internet Usage Internet Recent 24 hours - 1 weekhours24 -1 1 week1 to month1 1.1 3 months to 1 year 0.1 year 1 to months 3 1 month to 3 months 0.1 months 3 to month 1 Disusefor overyear a 1.3 In terms of age, the entire teenage population in Korea was usi was Korea in population teenage entire the age, of terms In Male Male Internet usage for people over 3 years old was 91.0%, whil [Figure 2-1-3] [Figure [Figure 2-1-2] [Figure 85.6%. The number of Internet users was 22.451 million and respectively. 21.1 The gender demographic of Internet users are 51.5 showing that men have a slightly higher usage than women. people in their 20s, 99.8% of people in their 30s, 99.4% of is peo over for 90% there was a all the Meanwhile, age categories. the senior citizens, with 14.9%p increase among people in their 2017 Korea Internet White Paper | Part 2 Utilization

increase among people in their 70s, making it 25.9%. People in their 40s had the highest number of Internet users, with 8.352 million people, and people in their 50s followed with 7.802 million. Next was people in their 30s with 7.517 million people, people in their 20s (6.841 million), and teenagers (5.401 million).

[Figure 2-1-4] Internet Usage and User Count By Age Group (Unit：%, 1,000 people)

8,360 8,352 Users in 2015 7,802 7,633 Users in 2016 6,796 Usage in 2015 5,647 7,517 7,245 6,841 Usage in 2016 5,401 3,846 2,670 2,555 2,898 99.9 100.0 99.9 99.9 99.8 99.8 99.4 98.8 94.9 89.3 1,207 79.8 82.9 74.5 806 59.6

25.9 17.9

3-9 years old Teens 20s 30s 40s 50s 60s Over 70 years old

[KISA, 2016 Survey on Internet Usage, 2016]

91.6% of internet users used Internet for "communication" like e-mail and SNS, and then "leisure", and "information" followed (each 89.1%). Meanwhile, using Internet for "operating a web page" was 7.2% and "education" was 43.6. The lowest was for "employment/jobs" with 17.6%.

[Figure 2-1-5] Average Hours of Internet Usage (for people over 3 years old) (Unit：%)

more than 35 hours Average Weekly Internet Hours 7.3 14 hours and 17 minutes 27.3 less than 7 hours 21 to less than 35 hours 21.4 48.8%

20.1 23.8 14 to less than 21 hours 7 to less than 14 hours

[KISA, 2016 Survey on Internet Usage, 2016]

78 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] 79 2016 , (Unit：%) ge ience ience with 2015 99.2 98.8 98.5 on Internet Usa 98.1 y device or service. Awareness loud computing service. The Big Data increased, but they 97.4 %, %, 0.4%p more than last year. ith Internet Access" from every useholds. According to the ICT 6.2%p, 6.2%p, from 26.6% last year to previous year. Fiber optic cable list for two consecutive years among t. 48.9% of businesses used mobile 97.2 2016 Surve

show that out of all the businesses, , %p. Internet usage for work purposes 2010 2011 2012 2013 2014 96.8 KISA [ 2009 95.9 2008 94.3 94.1 94.0 92.7 2005 2006 2007 86.0 illion businesses, 20.4% illion of 20.4% businesses, (0.77 businesses had million) exper 68.8 70.2 2016 Study on the Information Society Statistics Household Internet Usage Internet Household 63.2 49.8 2000 2001 2002 2003 2004 2016 The The results of The Internet usage rate of domestic households in 2016 was 99.2 Awareness for IoT was 22.7%, and 0.5% among them were using IoT In 2015, of all the 3.81 m Awareness for new technology such as IoT, cloud computing, and B. Business [Figure 2-1-6] [Figure International Organizations like OECD, ITU gather "Households w country each year to understand the Internet Development environmentIndex released for by ITU, ho Korea was at the top of the 175 member countries. were were used similarly or less than the previous year. for cloud computing was 24.2%, and 4.1% among them were awareness using for c Big Data service was 20.9%, and 0.8% were using i service. was the most used for Internet access with 63.2%, higher by 4.2 by higher 63.2%, with decreased access e-commerce Internet for 72.7% for had access usage used to but the most Internet, the which 85.8% is to was 1.7%p more than 0.8%p the by increased 20.4%. business using e-commerce. 2017 Korea Internet White Paper | Part 2 Utilization

2. Internet Environment

A. Improving Internet Environment

1) Web Compatibility

According KISA's research on domestic Internet environment, Microsoft almost completely dominates the domestic market, with 96.99% OS share and 85.86% Internet browser share. The high IE usage rate in Korea naturally increased the usage rate of ActiveX, a non-standard web technology. The main technology regarding e-commerce and digital government (digital payment, remittance, civil affairs) was realized through ActiveX technology. Some of this technology, like Accredited Certificate or keyboard security, not only block access from browsers other than IE, they are also accompanied with the inconvenience of having to restart the browser when installing them or are used as a route to plant malware in user PC. After the HTML5 has become the standard web technology as of 2014, Microsoft OS's Edge browser prohibits the use of ActiveX. As of 2015, Chrome and Firefox browsers removed support for NPAPI and other non-standard technologies. Not only that, but new technology that no longer uses ActiveX, like simple electronic payment or FIDO, has emerged, and the importance of web compatibility is increasing. A research on top 100 domestic websites in 2016 show that 358 ActiveX non-standard web technology were still being used. This is a 22% decrease (1,286) from 2014 (1,644). In terms of category, multimedia has a large share (Flash, Windows Media Player). Reliance on ActiveX is continually decreasing, but compared to the number of ActiveX used on top 100 foreign sites (100), domestic websites still have work to do.

80 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] 81 KISA 2016 [ Domestic Foreign n-Ki). bility" so that private websites d, users require "broadband" 2016 P P (representative Lee Je-Soo), valuated educational or public A's program they can save the the save can they program A's c content. ide standard service to users of content. Finally, the broadband 358 r 2015, gives official qualification inancially benefit inancially from it, but also esired esired time and place. Open Internet rst, innovative creators can develop areness areness and increase openness. Public ormally, a user test process is required e viewed at KOREA HTML's homepage on-standard web technology, compatibility trust. There are twelve criteria for judging 102 100 2015 621 178 2014 1,644 ActiveX Usage for Top 100 Domestic Web Sites Web Domestic 100 for Top Usage ActiveX 0 500 2,000 1,500 1,000 In 2016, three institutions were awarded the highest grade: EI Open Internet means the user can access the Internet at their d The The Korea Internet Professional Association (www.kipfa.or.kr) e KISA is operating a program called "Web Sites with High Compati 2) Open Internet2) Open websites on their openness and presented the result to raise aw raise to result the presented and openness their on websites when a new website is opened or redesigned, but if they use KIS use they if but redesigned, or various Internet environments. This program, started in opened Decembe is to sites that adhere to a website certain level of N web compatibility. new a when a whether site's which includes web the compatibility, use of n will voluntarily comply to web compatibility standards and prov cost of doing so. Through this program, websites can not only f receive a nationally recognized qualification, and gain users' of with web functions, compliance etc. standards, Details can b (www.koreahtml5.kr). Macco (Chairman Eo Cheong-Soo), and BMS (representative Kim Seo can also be explained with network neutrality in three ways. Fi product and service without having to communications ask to for use the permission. new Internet Secon service, providers application cannot or block or suppress communications for a specifi [Figure 2-2-1] 2017 Korea Internet White Paper | Part 2 Utilization

universities, 100 private universities, and public institutions such as public research labs were subjected to evaluation. They tested for blocked access through robots.txt, noindex/nofollow tags, use of ActiveX/Image/Flash, blocking by user-agent, or the disclosure of URL address.

3) Web Accessibility

Since 2004, the government has been steadily pursuing to improve web accessibility through various means such as the enactment of web accessibility-related standards and guidelines, revisions of regulations, surveys, professional training courses, quality certification, seminars, consultations, online support, and the development and distribution of evaluation tools. The domestic laws related to web accessibility include the "Act on Welfare of Persons Disability," the "Act on the Prohibition of Discrimination of Disabled Persons, Remedy against Infringement of Their Rights, Etc.," and the "Framework Act on National Informatization." The "Act on Welfare of Persons Disability" that was enacted in 2007 states the prohibition of discrimination against disabled people, and the central and local governments shall pursue efforts to provide disabled people access to information. Moreover, the "Act on the Prohibition of Discrimination of Disabled Persons, Remedy against Infringement of Their Rights, Etc." that was enacted in 2008 mandates the provision of legitimate convenience in information communication and in the communication and observation of web accessibility. These acts emphasize adherence by clearly stating the punishment for discriminating against disabled people. The "Framework Act on National Informatization" that was enacted in 2009 also mandates the observation of granting disabled people and senior citizens web accessibility, and it introduced the national voluntary certification that allows the government to manage quality certification systems to recognize websites for providing excellent web accessibility, and certification agencies through the revision of the "Framework Act on National Informatization" in 2013. The web accessibility quality certification business is run by three institutions designated by the MSIT (January 2014), with a total of 5,392 websites certified as of April 2017.

B. Internet Culture

1) Bridging the Information Gap

As the information service quickly shifts to mobile and smartphones, and smartpads become popular,

82 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 83 , 2017] , (Unit：%) tizens By Year By tizens vious year.) p they had been conducting ap ap index, the level of digital isabilities isabilities who have difficulty Etc. of Distinguished Service arginalized groups (people with d 4,151 communications devices, devices, was 58.6% in 2016, up nications environment, they used al. The variety of device provided ence on the information gap not efined as 50 or older, the number eople otherwise rated as special by p survey," that includes both wired ople with disabilities, the government unding and 20% on the individual. old, access to wired/wireless device Internet services used, level of es are people with disabilities registered ctor), North Korean defects, and citizens ed to 55 from 50, and sampling methods 2016 Digital Information Gap Survey ication (0.4) ication level of social/economic activities with Internet , [MSIT / KISA, information g /sharin g roducin p (pc/mobile smart device) smart (pc/mobile Informatization for Marginalized Groups Compared to Average Ci Average to Compared Groups Marginalized Informatizationfor Total 50.1 52.4 58.6 The government has provided supporting device for people with d From From the survey on digital information gap based on the smart g Capacity 34.6 37.4 45.2 Category 2014 2015 2016 Utilization 47.7 51.6 59.0 level of capability：PC and mobile smart device capability device smart mobile and capability：PC of level of number Internet, mobile or wired of application：use of level level of toaccess：access wired/wireless Internet inside househ according according to "Act on Welfare of Persons with Disabilities" or p the MSIT and KISA have stopped the survey on the information ga since 2004 and in 2016 replaced it with "digital information ga f accessing computers or the Internet since governmental 2003. The beneficiari 80% by distributed is the benefit "Act on The the Honorable Treatment of State." And Support the forto Persons, For financially challenged low-income groups or lower income pe and wireless connection environments. To gather better intellig funding can be extended to 90%. In 2016, the government provide just in the PC environment but also in the wired/wireless commu the "smart gap index" to survey the normal disabilities, citizens, senior thecitizens, fourlow-income group, m agriculture se and from 2003, it provided 54,425 communications devices in tot rose from 59.7% in 2015 to 64.5% in 2016, up 4.8%p from the pre the by d marriage. In particular, are from the age for senior citizen was rais citizens 4.8%p up senior (If 2016, in (52.4%). year 64.5% to previous 2015 the in from 6.2%p 59.7% from rose were were reconstructed from the last survey. informatization, including both the use of PC and mobile smart y y y Digital Access Digital 72.3 73.7 84.5 [Table 2-2-1] [Table

Informatization level = access (0.2) + capability (0.4) + appl + (0.4) capability + (0.2) access = level Informatization

* 2017 Korea Internet White Paper | Part 2 Utilization

expanded each year, from 10 in 2003, 68 in 2013, 74 in 2015 and 84 in 2016, widening choice and satisfying the need for all kinds of disabilities.

2) Action Towards Cyber Violence

The usage of Internet is increasing due to smart mobile devices like tablet PC and smartphones. However, the proliferation of smart devices have its side effects other than changing lifestyle and ways of communications between generations. Cyber violence is also on the rise, according to survey on Internet addiction. Cyber crimes such as infringement of network information (hacking, malware, etc.), user crimes (internet fraud, infringement of copyright, libel, etc.), illegal contents (cyber gambling, adult content, etc.) is also continuously increasing.

[Table 2-2-2] Trend in Cyber Criminals (Unit：people)

Category 2013 2014 2015 No. of Cyber Criminals 54,117 87,631 114,091

[Korean National Police Agency, Trend in Cyber Criminals, 2016]

3) Smartphone and Internet Addiction Prevention and Response

According to the "Comprehensive Plans for Right Use of Smartphone and Internet," the concept of “smartphone and Internet addiction" refers to an overuse of smartphone and Internet so much that it presents with symptoms of withdrawal and tolerance, and causes hinderance to normal daily life. The symptoms include high anxiety or nervousness when not using a smartphone or reliance on virtual world so much that it interferes with reality, and appears in various forms such as game addiction, SNS addiction, or pornography addiction. Due to the rapid proliferation of smartphones, the development of ICT and the change it brings to lifestyle or methods of communication, the problem of addiction is becoming more prominent. According to the 2016 "Smartphone, Internet Addiction Survey" (MSIT, KISA, 2017.3), 17.8% of smartphone users from 3 to 69 years old have an addiction problem. This is 1.6%p increased from last year (16.2%) but the growth has slowed down. In terms of age groups, it has decreased 1.0%p for teenagers (10~19), leaving it at 30.6% (1.649 million people), but increased for children (3~9) or adults (20~59) by 12.4% (5.5%p) and 13.5% (2.6%p), leaving them at 17.9% (0.591 million people) and 16.1% (4.826 million people), respectively. 11.7% of people in their 60s (0.360 million people) were addicted, surveyed for the first time this year.

84 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] y 85 (Unit：%) 9.7 11.7 60s 2 13.6 16.1 Adult 2.5 d games (81.3%), web surfing 2016 Internet Addiction Surve Age d was the highest (3.3%) and

, agers agers were at risk of addiction then "better family and friends he highest with games (35.4%), 27.1 addicted, "enhancing knowledge 30.6 e the school. kim-i" (school club) to spread the curricular hours, and after school Teens This suggests that the suppressing ned an "information ethics school" MISP 3.5 [ agers can voluntarily protect themselves Research on parent-child relationship de users on proper use of smartphones enagers enagers at a high risk for cyber crimes. 16.7 17.9 Potential Risk Potential Children 1.2 15.3 2.5 17.8 2016 Addicted High Risk 13.8 2.4 2015 16.2 Year 2 12.2 2014 14.2 Trend in Smartphone Addiction By Year / Age Group / Age Year By Addiction Smartphone in Trend 1.3 10.5 2013 11.8 In the first survey on benefits of smartphones targeted to the To cultivate sympathy and consideration for others so that teen As As for household types, high risk group for one-person househol Messengers Messengers were the primary function for smartphones (94.5%) an In addition, In it addition, is by also visiting lectures accompanied for te 4) Promotion of Internet Ethics Awareness Ethics Internet of Promotion 4) (73.7%), and SNS (65.0%) followed. Concerns for addiction was t and messenger (24.0%) and web surfing (21.1%) followed. capacity" capacity" (56.1%) turned up the highest among all the answers, to prevent dependence on them. against the side effects of informatization, the government in ope 161 middle and high schools. It utilizes hours school to educate hours, students, extra and has been operating "Aleumnuli ji informatization culture and side-effect campaigns in and outsid if their parents were addicted. households with more than three were people had high potential risk. parents their if relations" (54.7%) and "social contribution" (44.7%) followed. usage is smartphone not the but answer, the right way is to gui of addiction risk show that 23.5% of children and 36.0% of teen [Figure 2-2-2] 2017 Korea Internet White Paper | Part 2 Utilization

The lecture provided useful information about cyber bullying, stalking, personal information, libel, internet fraud, internet pornography, hacking, malware, copyrights, etc. The art performance class gave teenagers a chance to acknowledge the problems by role-playing as the perpetrators and victims of cyber crimes. The government has been setting up cultural and educational measures for cyber crimes that cannot be dealt by law alone for delinquent teenagers at the probation centers and delinquency prevention centers. In addition, the government also conducted cyber ethics lectures for parents, locals, military soldiers, etc. They designed customized content to heighten the effect of the lectures, and as a result 100,938 parents, locals and military soldiers were educated on this subject. Meanwhile, the government is also providing ethics educational contents for anyone to use since 2002. Not only is there textbook on cyber ethics, but videos and flash animations on each side effects of information society. The content developed is provided through the digital culture portal (digitalculture.or.kr). In 2016, they developed a textbook for "an intelligent information society" targeted towards parents raising children and teenagers. Also, to educate the teaching staff, they created contents for ethics in the information society. The course will be operated as remote training course for the teaching staff after the Korea Education and Research Information Service (KERIS) validates it. Yet there needs to be more effort on development of contents and renewal on outdated materials in the face of new cyber violence and new side effects emerging from the rapidly developing information society. The government opened a remote training course for the teaching staff to preventing the side effects of informatization and counseling for them. There were three courses for the teaching staff, "remote training for cyber humanistic education," "remote training for cyber ethics," and "training for digital media literacy." There were also activities to heighten the awareness for side effects of informatization, and spread a healthy digital culture for teenagers and normal citizens. The government opened a "u-clean teenage culture concert" with Moneytoday, and launched an activity called "McLean, bright Internet made with family" with Maeil Business News, holding an opening ceremony in March and selecting exemplary schools in December. In 2016, there was the 3rd information ethics music festival with the theme "healthy Internet world created by everyone." By composing music together with peers and teachers it encouraged teenagers to learn about the side effects of informatization. In additiion, the UCC preliminary contest encouraged the teenagers to try different kinds of media.

86 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] 87 2017 , s prostitution and obscenity took ext ext followed gambling (53,448, y and its high connectedness. e to the spread of international as Tumblr, Twitter, and Instagram. ving ving overseas to avoid regulations. legal foreign information was 157,451 tion, illegal identity transaction, violation of violation transaction, identity illegal tion, on on prostitution or obscene materials prevention of illegal information circulation, (Timeline：2011. 1. 1.~2016. 12. 31., Unit：cases) 31., 12. 1.1.~2016. (Timeline：2011. Korea Communications Commission 2016 Statistic [ 668 1,572 3,135 2,085 5,379 7,783 5,322 6,279 10,832 13,377 16,207 22,742 9,343 14,085 32,330 49,737 50,695 81,898 17,014 21,189 22,204 21,885 26,071 35,920 21,138 28,800 35,899 45,800 50,399 53,448 53,485 71,925 104,400 132,884 148,751 201,791 National Security Act Reviews by the Korea Communications Commission Communications Korea the by Reviews Review 17,280 21,306 22,382 21,990 26,284 35,938 Review 21,444 29,283 37,580 46,296 50,905 54,074 Review 10,667Review 15,076 2,833 34,634 2,947 53,985 4,768 55,906 85,768 3,770 6,901 8,944 Review 57,944 75,661 110,714 140,421 158,073 211,187 Review 5,720 7,049 11,350 14,380 18,077 26,463 Correction Correction Correction Correction Correction Correction Correction Correction Correction Correction Correction Requirement Requirement Requirement Requirement Requirement Requirement Category 2011 2012 2013 2014 2015 2016 According According to the correction requirement issued by KCC in 2016, As As for the response to these materials, "blocking access" to il Total 5) Response to Distribution of Unhealthy Information the majority of illegal contents with 81,198 and 26.5%) of illegal food and Informati 17.8%). (35,920, medicine them (40.6%). N were distributed through foreign communication businesses such in number, 78.0% of all the correction requirements. This is du services, communication as well as illegal domestic services mo Therefore, there needs to be international cooperation for the illegal site operators and illegal information publishers. This is a typical example of the exploitation of SNS's anonymit Other illegal conduct：infringement of copyright, organ transac organ copyright, of conduct：infringement illegal Other Conduct * [Table 2-2-3] Medicine of Rights Gambling Obscenity Infringement Infringement Other Illegal Illegal Other Prostitution / Prostitution Illegal Food / Food Illegal 2017 Korea Internet White Paper | Part 2 Utilization

6) Response to Internet Fraud

"Phishing" is a combination of "Private Data" and "Fishing," and it means to fish for private information. The perpetrators pretend to be from financial institutions or public institutions and coax the victims to give them the numbers to their security cards through mail or Internet, and then steal their financial information. Pharming is a combination of the word "Farming" and "Phishing," and the perpetrators change files of infected host PCs or use the weakness of DNS to lead users to a "Pharming site" and leak private or financial information. From 2011, phishing sites that appear as normal but steal private and financial information from users are increasing rapidly. Recently, phishing attacks lead the users on to a fake site even if they access the real one if the PC is infected with malware. Cyber fraud is becoming more complex. MSIT and KISA are providing number blocking service to prevent the financial losses of citizens who have been deceived by fake numbers pretending to be caller IDs of public institutions. From April 16, 2015, Article 34-2 (Prohibition of Fake Caller ID and Protection of Users) of "Telecommunications Business Act" requires the telecommunications businesses to take strong measure against illegal caller ID changes. To make reports on fake caller IDs easier, the KISA's Bohonara & KrCERT(http://www.boho.or.kr) has a center where people can report suspicious numbers. The reported numbers may be tracked, and be used to determine the integrity of the number as well as evidence to track down voice phishing criminals. Since the center opened in April 2015, there were a total of 5,902 reported numbers until 2016, and among them, 262 have been confirmed as fake numbers and had their services terminated. Accordingly, the telecommunications businesses are obliged to take technical measures to confirm the integrity of calling numbers.

88 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 89 domestic Internet, to respond of domestic internet traffic, the e of web cloud sites, and integrity integrity and sites, cloud web of e ve closely cooperated with major with major ve cooperated closely have emerged, they have started started have they emerged, have h the KrCERT. In particular, they es. They hold a workshop once a or quick response in case of such es. at require mutual cooperation, and 006 and searched 77,000 domestic them accordingly. er security, the emergency response response emergency the security, er tion, MSO, etc.) and security related r r web servers for public, government, action between domestic and foreign sed to "caution" on January 8, 2016. they have strengthened detection and tic risk for new malware and security security and malware new for risk tic ing. In 2016 the number has increased e decreased 76.4% compared to 2015 l issues, it response opens an emergency tacks, tacks, phishing cases, or fake sites. While to act as a window for a common response To prevent infringement of privacy in the private sector, and f The detect system for sites hiding malicious codes started in 2 After After cases where malicious codes are released through websites The situation room of the KrCERT constantly monitors the status It also acts as a window for information sharing and collective A. Data Protection 3. Internet Service Convergence InternetService3. from 2.8 million sites to 3.4 million sites. Detected sites hav sites Detected sites. million 3.4 to sites websites that year. The number of target million sites has been increas 2.8 from checks of about 200 free distribution softwares in Korea. in softwares distribution to detect free and respond to such websites 200 since 2006. In addition, countermeasures about through thorough of checks on programs and homepag checks occurrence, occurrence, the MSIT and KISA are making various efforts throug have a 24-7-365 situation room to monitor abnormal signs in on the the first instance in case of an infringement incident, and system. status of major DNS services, and the connection status of majo and financial institutions. It also receives reports on DDoS at collectively responding to the emergency, it assesses the domes vulnerabilities of domestic Internet network and responding to In the related organizations. case of and political major socia telecommunication service providers (ISP, IDC, mobile communica companies and organizations on the response to infringement cas system. This year, as various issues have posed a danger to cyb to danger a rai posed was have level issues crisis various cyber as the year, since This maintained system. been has system Since the establishment of the KrCERT in December 2003, they ha semester to exchange information and opinion on major issues th to check the collaborative response system for urgent emergenci 2017 Korea Internet White Paper | Part 2 Utilization

(46,850 cases to 11,044 cases). Meanwhile, malicious code distributers exploited a combination of widely used weaknesses, and the order of the exploited software are: Adobe Flash Player (44%), Java Applet (33%), Microsoft Internet Explorer (14%).

[Table 2-3-1] Detected Websites With Malicious Code By Year (Unit：case)

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Distributor 993 1,619 1,324 1,731 1,434 1,433 3,270 4,472 2,583 3,295 1,370 Proxy Site 5,624 3,932 7,654 5,621 5,240 10,372 9,748 13,278 45,120 43,5559,674 Total 6,617 5,551 8,978 7,352 6,674 11,805 13,018 17,750 47,703 46,850 11,044

* Distributor：websites that directly distribute malicious code to users * Proxy site：websites with hidden address linked to distributor [KISA, 2016]

In Korea, mobile malicious codes (malicious apps) began to spread from 2012, and has soared since 2013. While until now, damage has been prevented by blocking harmful websites (distributors, information leaks) in cooperation with Internet service providers when a smishing app has been detected, malicious apps are continuously evolving. Hackers are now remote controlling infected smartphones and using them to distribute smishing texts and leak information, and creating collateral damage. In order to prevent fundamental damage, the government set up a "mobile emergency therapy system" that provides notification and treatment to zombie smartphones infected by malicious apps in 2014. In 2015, smartphone treatment services for infected smartphones were provided to top three mobile telecommunication companies (SKT, KT, LG U+). Meanwhile it is crucial that countries cooperate with each other to prevent and respond to cyber crimes, due to the openness of Internet. Among foreign countries, there is active movement to strengthen the cyber security cooperation. KrCERT/CC, FIRST (Forum of Incident Response and Security Teams) and APCERT (Asia Pacific Computer Emergency Response Team) are leading the response to cyber crimes through consortiums and by actively participating in discussions on the cooperation of cyber security. They are also educating developing countries on cyber crimes.

90 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 91 t on Promotion of Information me me Court of Korea. tion. cations cations Infrastructure," and "Act on, Etc." and this law applies to onal Information Act," a general "Act on the Protection, Use, Etc. e laws and regulations of relevant ements on law, policy and system rivacy Protection Center as of July ion ion of laws for each relevant fields. de service using the communications ation and guaranteeing the rights of on, Etc." mandate that the government resolve resolve issues. The Privacy Protection fies people on how to report damage, n is "Act on Promotion of Information central government. They also They execute government. central n Act," "Protection of Communications n n protection laws issued by the central e and public sectors. This Act stipulates y the "Protection of Personal Information ctims, the government operates KOPICO on Act." The Personal Information Protection Since September 2011, Korea has enacted the "Protection of Pers The The law that has the broadest definition on personal informatio Meanwhile, the Meanwhile, "Protection of Personal Information Act" and "Ac The central administrative agency is responsible for the execut B. Personal Information Protection the agent of the information to view or block their own informa own their block or view to law regulating all personal information processed by information the privat the matters of such as obligatory steps for processing agent personal inform the Commission, under presidential orders, judges and passes improv Therefore, they also construct enforcement plans and improve th fields to meet the purpose of "Protection of Personal Informati and passes plans for protection of personal information by the and Communications Network Utilization and Information Protecti telecommunications service providers and broadcasters who provi network. Other laws also include personal information, of such Location as Information," "Credit Information Use and Protectio Secrets Act," "Act on the Protection of Information on and Real Communi Name Financial Transactions and Confidentiality." correction requirements on the violation of personal informatio government, municipal governments, various Courts and the Supre and Communications Network Utilization and Information Protecti Center responds to complaints, informs people on remedies, noti runs a Privacy Protection Center to receive damage reports and and receives damage reports. Also, for the rapid response to vi according to the "Protection of Personal Information Act" and b and Act" Information Personal of "Protection the to according Act" revised on July 2015, KOPICO has been transferred to the P 25, 2016. 2017 Korea Internet White Paper | Part 2 Utilization

[Figure 2-3-1] Reports on Infringement of Personal Information (Unit：case)

200,000 177,736 166,801 158,900 152,151 150,000 122,215

100,000 98,210 54,832 50,000 39,811 35,167 25,965 18,206 23,333

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

[KISA Privacy Protection Center, Trend in Infringement of Personal Information Report and Response, 2016]

92

Part 3 Infrastructure

1. Internet Infrastructure

2. Internet Address Resource 3. Internet Technology

4. Legal System For Internet 2017 Korea Internet White Paper | Part 3 Infrastructure

1. Internet Infrastructure

A. Backbone Network

1) Internet eXchange

Following the activation of domestic Internet services, Internet traffic rapidly increased, prompting the establishment of domestic IX (Internet eXchange) in 1995 for efficient use of traffic and prevention of unnecessary overseas routing of domestic traffic. In Korea, KTIX (KT, www.kornet.net), DIX (LG U+, www.uplus.co.kr), SKBIX (SK Broadband, www.skbroadband.com), and KINX (www.kinx.net) provide IX services, and the next-generation Internet address 6NGIX (KISA, www.vsix.kr), an IPv6-based interconnecting network, is operating as a nonprofit business. Looking at the current IX industry in Korea, KTIX (KT, www.kornet.net) connects 19 ISPs through three IXs at a connection capacity of 2,343Gbps. DIX connects 60 ISPs with two IXs at a total connection capacity of 3,000Gbps. SKBIX connects 34 ISPs via two IXs at 2,900Gbps. KINX connects 45 ISPs and two IXs at a connection capacity of 735Gbps. Finally, 6NGIX, a non-profit NOC for IPv6-based traffic exchange, connects nine ISPs via 90 IPv6 interconnecting institutions with a total connection capacity of 24.9Gbps.

96 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] 97 2017 , KISA [ ), B-Net (SK Broadband), Broadband), (SK B-Net ), + des in a dual-broadband LG LG U the households of individual P addresses from the KISA to ations across the country, and d significant backbone capacity ET.” Since June 1994, KORNET om, om, and LG Powercom to secure s. , which its launched business by peed peed Internet access services across + by KT, is a high-speed information ded its service to SOHO and home le-play service (TPS), consisting of service le-play (TPS), consisting ched the nationwide distribution of ncluding the 280Gbps line connecting , which combines mobile communication connectivity, to institutions and individuals. Connection Network Structure by IX (as of 2017. 5) of2017. (as IX by Structure Network Connection A A total of 94 commercial ISPs, including KORNET (KT), BORANET ( BORANET uses more than 1,000 backbones and subscriber access no access subscriber and backbones 1,000 than more uses BORANET KORNET, KORNET, a domestic Internet network infrastructure established BORANET BORANET is the Internet communication network of LG U 2) Commercial Internet Networks Internet Commercial 2) leasing corporate Internet lines in October 1994, and has expan users. It also provides high-speed Internet customers with trip services. VoIP VoIP and IPTV services, as well as quadruple-play service (QPS) transmission network nationwide to provide high-quality, high-s the country. In January 2010, it merged with LG Telecom, LG Dac Sejongnet (Sejong Telecom), and Dreammax (Dreamline), receive I provide Internet services, such as leased lines and high-speed network whose name is a shortened form of “KORea-telecom-interN has installed 10 to 100Gbps high-speed networks in 50 built or approximately so 100 international loc lines around the world, i Korea to the US, to provide internet services. In 2008, it laun FTTH FTTH (Fiber-To-The-Home), which provides high-speed Internet to to its conventional best-effort network to provide IPTV service IPTV provide to network best-effort subscribers. Moreover, it expanded its conventional premium network and adde its to [Figure 3-1-1] [Figure 2017 Korea Internet White Paper | Part 3 Infrastructure

its capability to provide stable, integrated wired and wireless services. B-Net is the internet network of SK Broadband, which launched its commercial services in April 1999, introducing Korea’s first IPTV service (Btv) in July 2006, and subsequently releasing Korea’s first TPS product (B Set) in January 2007. At present, B-Net features some 167 nodes to accommodate subscriber traffic across the country, and is connected to numerous major foreign and Korean service providers, allowing it to provide high-quality Interent services. In Korea, there are currently a total of eight domestic submarine cable relay stations (international cable landing stations in Busan, Geoje, and Taean, and domestic relay stations in Jeju, Goheung, Namhae, Hosan, and Ulleung) and, as of 2016, there are nine international submarine cables with a total capacity of about 27Tbps. The geostationary satellites operated by Korea are the Mugunghwa 5 and 6 satellites and Koreasat 8 (Condosat), which are used for communication and broadcasting. Also, for observation purposes, Korea has a weather and ocean observation and communications satellite (Cheollian) and low earth orbit satellites (Arirang 2 and 3). The country’s earth stations are located in Seoul, Yongin, Geumsan, Boeun, Asan, and Yeoju, with satellite control centers in Yongin and Daejeon. These earth stations target satellites such as INTELSAT, INMARSAT, Asiasat, SES, JSAT, and Apstar, among others.

B. Subscriber Networks

1) Wired Networks

A subscriber network is a part of the ICT infrastructure that connects service networks, such as telephone networks and the Internet, through the backbone network, relay network, and then finally to the subscribers which include households, business entities, and schools. A wired telephone network is a communication network that connects audio signal passed through the switchboard and the transit exchange at a telephone company to the subscribers, using local exchange and copper cables. Due to the increasing use of the Internet and mobile phones, the ratio of wired telephone subscriber networks has been steadily decreasing. The Internet subscriber network is a data network connecting the terminal (PC) of the subscriber, through an IP device such as a router, to the Internet via methods like xDSL (xDigital Subscriber Line), LAN (Local Area Network), FTTH, and HFC (Hybrid Fiber Coax), thereby allowing the subscriber to use the internet through an IDC (Internet Data Center).

98 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] 99 2016 , e communications Convergence of broadcasting and High definition / High High / definition High Capacity / Smart ServiceCapacity / Smart be ignored. Since 10 years ium, ium, and large cities across the Internet on smartphones, will be provided. be will been been recognized as a necessary constructed, while subscribers bluetooth market. A third of Very Small Aperture Terminal) Terminal) Aperture Small Very tem or small wireless backhaul service providers completed the completed service providers homes and smart automobiles. ing optical cables, which provide 0 times faster than BcN, and the P. This is to disseminate traffic in luetooth installed, and so IoT will tly, the bluetooth market is growing , and farming and fishing villages, f accessories for PCs or smartphones dband dband convergence networks (BcN) a Internet Service Infrastructur reless Internet services. Furthermore, g , in of consideration the future development Smart TV to Construct a Gi gy Giga Cloud, High Definition IPTV, IPTV, Definition High Cloud, Giga UHD TV, Realistic Communications, Communications, Realistic TV, UHD Strate

, NIA [ 100Mbps ~Maximum 1Gbps ~Maximum Comparison Between BcN and Giga Internet Service Internet Giga and BcN Between Comparison BcN 50Mbps ~ 100Mbps VoIP, IPTV In the future, IoT market is expected to lead the growth of the In Korea, telecommunications is the most used method to access Demand Demand for Bluetooth (WPAN) has increased greatly since it has Lately, major telecommunications service providers have been us Bidirectional Internet using the Mugunghwa satellite and VSAT ( CategorySpeed Network Service Typical Characteristics Giga Internet 2) Wireless Networks due to demand for wearable devices like smart watches, or smart or watches, smart like feature for personal computers devices and smartphones, and a variety o wearable with bluetooth for functions have emerged in the demand market. More to recen due be the major area of bluetooth application in the near future. near the in application bluetooth of area 48 billion devices to be major created in 2021 are the expected to be have b ago telecommunications service providers have been installing A installing been have providers service but the method of using IEEE 802.11 telecommunications technologyago (WLAN) is not to the best transmission efficiency and quality and allow the broa of network technology and service demand forecast, these major of 100Mbps or faster, to build FTTH networks in most small, med small, most in networks FTTH build to faster, or 100Mbps of the country except in some rural and fishing villages. Moreover commercialization of a 1Giga internet service, which is up number to of 1 its subscribers has been rapidly increasing. is offered in very remote locations, such as islands, mountains where where the FTTH-type wired Internet subscriber network cannot be in Korea’s islands are connected to the wide-area microwave sys microwave wide-area the to connected are islands Korea’s in systems, using repeater stations or steel towers, to receive wi a trial Internet service based on broadband and wide-area Wi-Fi [Table 3-1-1] 2017 Korea Internet White Paper | Part 3 Infrastructure

the network as well as to generate profit by providing service. Yet they have not gained much profit from it and only 10% of the traffic went through AP, making it inevitable to rearrange the service. Originally, they charged several KRW 1,000 a month or allowed free AP access to their service subscribers, but the trend now is to open it up to everyone. In February 2012, LG U+ opened up all 70,000 of their AP to the public, and in May 2015, SK Telecom has also opened up half of their AP, about 60,000 to the public. The government has also launched "Public Wi-Fi Project" in 2012, which promotes the installation of APs, with the goal of supporting average citizens or marginalized groups and reducing household telecommunications cost. The target areas are public places most used by average citizens, and for six years until 2017, 30,000 APs have been installed in 12,000 places like traditional markets, welfare facilities and community centers. The number of subscribers to domestic WWAN services in 2016 surpassed 60 million people, and reached 61.3 million in December. The net increase in subscribers was 2.36 million, and compared to the 1.64 million increase in 2015, the growth speed is increasing. Experts say the emergence of a new engine could be an explanation to the continuous expansion in the telecommunications market. Compared to December 2011, there were only 0.91 million new subscribers to the top three telecommunications service providers, but MVNO (Mobile Virtual Network Operator) had 5.51 million new subscribers. It is assumed that MVNO absorbed most of the customers who wanted to use more than two devices with its low service fee and hauled the growth of the entire market. Yet in 2016, while MVNO's growth slowed down, subscribers of the top three telecommunications services increased by 1.44 million. This is because the growth of the IoT market were responded by the telecommunications businesses, and from 2017 and onwards, those who respond quickly to the IoT market will lead the market.

C. Research Networks

1) Domestic Networks

There is increasing consensus that a demand-based collaborative environment, instead of provider-based vicious cycle, is necessary for an environment for sharing advanced technology, analysis of Big Data, and utilization of ultra-high computing resources to make new scientific discoveries and solve existing social problems. As a result of this change, major R&E (Research and Education) users of KREONET (Korea Research Environment Open NETwork) are requesting a universal research

100 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 101 testing infrastructure pport up to 100Gbps, a orks. Currently about 200 ackbone provides backbone oaming, Eduroam), which is ntion of service interruptions the sources of future national GN-X GN-X in Japan, among others. iness and economic efficiency of ter adding Korea’s Gangwon PoP network service. network he scientific research of not only research research in five metropolitan areas necessary for a customer-oriented evelopment of R&D networks and curity, cloud, etc.), high-performance tan networks tested the 40G/100G 0Gbps 0Gbps transmission speeds and 68 domestic wireless roaming service. roaming wireless domestic 2016, government institutions and cy of backbone networks in Seoul, logy, medicine but also a variety of n n case of errors in the transmission shment of broadband, high-quality, itute's e-KVN site and Seoul National tructed a IP based service infrastructure infrastructure service based IP a tructed parate transmission of general research ng KREONET to derive R&D results. Internet2/GENI (Global Environment c associations in Korea and about 100 by sector and feature. Therefore, advanced KREONET startedKREONET as one of the five major national computer netw KREONET KREONET promoted the upgrading of backbone infrastructure to su As As of April 2016, the KOREN (Korea Advanced Research Network) b The main purpose of KOREN is to support ICT R&D and provide the To To develop the creative economy as well as identify and foster virtual networking service, and collaborative platform service network service with advanced network technology (SDN / NFV, se science and technology researchers are pursuing the technology software network service environment that can improve the research timel and collaboration as well as supplier-based high speed institutions, universities, government institutions and academi In particular, KREONET is considered a key infrastructure for t for infrastructure key a considered is high-tech KREONET science research and application institutions are usi particular, In social and cultural fields. cultural basic and applied science and like astronomy, climate, physics, bio social Daejeon centers and 15 regional network centers. They also consbetween regional network centers and environment for high-tech high speed even by international standards, and realized the se traffic and high-tech research traffic to maximize the efficien by setting up 100Gbps networks. In addition, the five metropoli interoperability on the Korean Astronomy and Space Science Inst a wireless infrastructure, is continuously expanding, and as of University. University. KREONET's global smart roaming service (Education R 36 educational institutions (52 college campuses) are using the are operating test beds as national strategic projects, such as for Network Innovations) in the US, GEANT/FIRE in Europe, and J and PoPs in Hong Kong and in Singapore, thus enabling the preve competitiveness, competitiveness, leading countries have been implementing the d lines between seven local connection points, featuring 10 to 16 leading test networks has been planned by advancing networks af by automatically routing the service to other dualized routes i network. subscriber subscriber lines, with 1 to 10Gbps speeds. In 2016, the establi 2017 Korea Internet White Paper | Part 3 Infrastructure

that colleges, research institutes, and industries need to secure original, cutting-edge ICT technology, and to strengthen Korea’s technical competitiveness, in accordance with the government’s ICT policy. With the KOREN project, the Korean government is laying the foundation for industrial promotion by creating a virtuous R&D ecosystem that encompasses the “future network-related R&D, test verification, field testing pilot, and commercialization”, and effectively linking technology development and industrialization.

2) International Networks

The TEIN (Trans-Eurasia Information Network) project is an ASEM (Asia Europe Meeting) project in which 34 European countries and 23 Asian countries, including Korea, are participating to promote cooperation in joint research. This project was launched based on an agreement signed by Korea and the EU in 2001, and is currently in its fourth phase (April 2012 to November 2016). During the TEIN4 project period, the EC planned the establishment of an Asia-oriented TEIN management center to maintain and manage long-term, sustainable TEIN cooperation projects, and, in 2012, the TEIN Cooperation Center was launched in Korea to oversee business management. The TEIN4 network interconnects 24 Asian countries, focusing on four TEIN POPs (Points of Presence) in Beijing, Singapore, Hong Kong, and Mumbai, and is connected to GEANT3 in Europe. In 2015, among the TEIN backbone networks, the Pakistan (Singapore-Pakistan) link was upgraded from 155Mbps to 1Gbps, the Vietnam (Hong Kong-Vietnam) link from 622Mbps to 1Gbps, the Hong Kong link from 120Mbps to 150Mbps, the Philippines (Hong Kong-Philippines) link from 155Mbps to 1Gbps, and the Thailand (Singapore-Thailand) link from 450Mbps to 600Mbps, and the virtual 100Mbps New Zealand (New Zealand-Singapore) link has been completed. Moreover, the new 10G EU (London)-Singapore link has been established, and, in February 2016, the 2.5Gbps EU (Madrid)-Mumbai-Singapore link has been upgraded to 10Gbps. The network is operated and managed by CERNET (China Education and Research Network) at Tsinghua University in China. The TEIN Cooperation Center has been preparing for the TEIN5 (2016~2021) project while completing the TEIN4 project, and is currently working on the EC approval process of the relevant project and its budget. The main objectives of the TEIN5 project include: 1) the establishment and operation of new links in Afghanistan, Mongolia, and Myanmar, 2) the development of campus network engineering competency, 3) the installation, operation, and capabilities development of specialized network products, services, and applications, 4) the promotion of the expansion of the pilot and joint research, and the activation of new collaboration, and 5) the bridging of the information

102 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 103 manufacturers. ng since March 2016. March since ng nted out the direction for the trial trial Revolution, to prepare for a roadmap for the convergence nternational smartphone market, of a nation of 5G powerhouse gether gether will also subsidize KRW of Korea and become an engine , and is continuing the APII test "Strategy for the Development of and has been operating a bilateral an APEC (Asia-Pacific Economic iled plans for service, technology, arket, and to gain early competitive competitive early gain to and arket, cations Industry" set up in January esses and high competition among ly used to build test environments, d competitive standardization patents of Information and Communication performance, and provide telemedicine f leading the 5G convergence market, technology and standardization amidst ional environment based on the previous The APII (Asia-Pacific Information Infrastructure) The test APII Infrastructure) Information (Asia-Pacific bed is For a smooth social and cultural transition to the Fourth Indus Despite the outward success of number one market share in the i the in share market one number of success outward the Despite Based Based on the strategy the government has established the vision 1)5G bed cooperation by connecting two research networks via Hong Ko gap in developing countries. Cooperation) cooperation project that began in 1998. It is main Technology (NICT) that was signed in 2011, NIA has established international line for a APII Korea-Japan 10Gbps-level test bed in connection with future network technologies, measure network services. Based on the protocol with Japan’s National Institute 1 trillion to the industry over a 5 year period with the goal o goal the with period year 5 a over standardization industry and ecosystem. the The to public and private trillion 1 sector to top telecommunications industry in the international market, an by 2022. there there is a fear of market erosion due to rising competition in the European-based equipment makers and rapidly growing Chinese that leads the Fourth Industrial Revolution and has set up deta new new convergence technologies, to have an upper hand in the 5G m 5G Telecommunications Industry." Through this they have set up of 5G and other industries reflecting the domestic and internat telecommunications industry to continue being the key industry to future development, amidst domination by international busin edge in convergence technology, the government has established strategy of "Strategy for the Development of Future Telecommuni 2014. This is meaningful in the way that the government has poi growing businesses. D. Next-Generation Internet Next-Generation D. 2017 Korea Internet White Paper | Part 3 Infrastructure

2) Future Internet

The collaboration of Korean government, the industry, academia and research institutions is promoting future Internet with the initiative of enhancing Korea's status as an Internet powerhouse. The former KCC set "development of future Internet" as a national agenda and established "Plans for Internet Development for the Future" to convert Korea from "network powerhouse" to "Internet powerhouse" after a one year long discussion between the industry, academia and research institutions from June 2010 to June 2011. The plan set its vision to "New 10 Years, Become the Global Leading Internet Nation" and set three goals, "building safe high-speed Internet infrastructure," "building competitiveness in the international Internet market," and "contributing to the national economy by creating jobs." They also established five governmental tasks: building the best smart network, developing smart Internet technology, discovering a service model for the future, creating a global test bed, and building a safe and strong industry environment. The government is also actively investing in R&D of future Internet. The plans are to advance wired and wireless network in preparation for the surge in data traffic, and to promote R&D and develop technology for the KOREN-based smart Internet infrastructure. In addition, to quickly develop future Internet and obtain leadership in the field, the government is currently working on the development of Internet technology for SDN technology that is reorganizing the network market, core technology for high speed Internet, integrated control and management system of wired and wireless equipments, and smart Internet technology. To obtain the executive power of these projects, former KCC established "Future Internet Activation Plan Using Test Network" in December 2012, and in particular is working on reconstructing KOREN for cooperation between institutions and commercialization of domestic products. Specific and efficient enforcements for the national master plan are also being discussed. The MSIT presented "Future Internet Business Council" in April 2013, an institution that will help commercialize the development of Internet technology and build a base for the industry. A variety of businesses, manufacturers and researchers joined in this council with the initiative of commercializing future Internet R&D. The Council is made of businesses, academia, research institutions, and public institutions including MSIT, KISA, NIA, KCA, and ETRI, and serves the purpose of collecting and sharing various opinions on the test and validation of future Internet R&D, pilot projects and collaborative policies.

104 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] 2017 , 105 AS Number (as number) (as illion illion IPv4 KISA [ Number of AS per Country per of AS Number Rank Country he world in terms of AS numbers. n n an effort to stable provide Internet 1 1 (/32) IPv6 addresses, which is the as approximately 112.43 m (address) IPv6 Address Address IPv6 Country Number of IPv6 Addresses per Addresses ofIPv6 Number Rank Country (address) IPv4 Address Number ofNumber Internet Addresses Per Country (as of 2017. 4) Country 1 U.S. 1,612,439,040 1 U.S. 43,601 1 U.S. 25,130 7 Brazil 83,511,808 7 Australia 8,887 7 Germany 2,170 2 China 338,232,320 2 China 21,257 2 Russia 5,844 34 Japan5 U.K. 203,276,288 Germany 3 119,542,656 122,190,872 Germany 5 4 France 16,452 U.K. 3 11,716 15,408 Brazil 5 4 Poland 4,670 U.K. 2,323 2,388 6 South Korea 112,430,3368 69 France Canada Japan 80,470,320 70,414,336 8 9,421 9 Italy 6 E.U. Australia 7,302 6,344 2,179 8 9 Ukraine Canada 2,050 1,920 11 Australia 48,486,400 11 South Korea 5,251 11 China 1,321 17 Sweden 30,051,176 17 Poland 3,850 17 South Korea 1,023 12 Netherlands 47,099,872 12 Argentina 4,828 12 Rumania 1,296 1314 Russia15 India16 45,235,456 Taiwan 13 41,466,368 Spain 35,512,576 14 R.S.A. 30,263,616 15 Russia 16 Egypt 4,647 Brazil 4,296 13 4,105 14 3,899 France 15 Indonesia 16 Japan 1,282 Netherlands 1,176 1,072 1,086 10 Italy 53,956,928 10 Netherlands 5,332 10 India 1,871 Number of IPv4 Addresses per Addresses ofIPv4 Number Korea has been striving to secure IP addresses and AS numbers i numbers AS and addresses IP secure to striving been has Korea Rank Country [Table 3-2-1] A. IP Addresses and AS Numbers 2. Internet Address Resource addresses, the sixth most IPv4 addresses in the world, and 5,2511th most in the world. Also, with 1,023, Korea ranks 17th in t services since early 1990. As of the end of April 2017, Korea h 2017 Korea Internet White Paper | Part 3 Infrastructure

Countries around the world are setting up policies and programs for the installation and expansion of IPv6 customized to their industry structure and available resources. Korea as well is promoting the introduction of IPv6 for activation of new Internet industries like Big Data, cloud, and IoT. Over the past 10 years, the government has established a base for the transition to IPv6 address system through 3 steps of the basic plans for the spread and transition of IPv6. In March 2014, they established "Roadmap on Expansion of IPv6 for the Promotion of New Internet Businesses." In the roadmap, they set up the vision of "Building the Leading IPv6 Internet," and set up the goals: first, build core IPv6 networks by 2017, second, open Korea's first IPv6 based wired and wireless Internet and website by 2014. Also, they presented three tasks to achieve this goal, which is spreading IPv6 infrastructure and service, developing IPv6 device and service, and promoting IPv6 transition and creating an IPv6 environment. For a systematic IPv6 change, the government has created and is operating a cooperative system of many related bodies. They are also operating a "IPv6 Service Support Committee" to share the status of roadmap implementation and discuss key issues. For SMBs lacking specialized manpower and technology, the government has launched a "IPv6 Comprehensive Support Center" in May 2014. The IPv6 Comprehensive Support Center supports the building of IPv6 system under IPv4/IPv6 coexisting environment, and aids the related businesses like ISP service providers, business users software and hardware manufacturers with consulting, test, etc. Also, they offer free IPv6 test networks for its commercialization.

B. Domain Names

There are two types of ccTLD (country code top-level domain) in Korea: “.kr” and “.한국”. The “.kr” domain was first introduced in 1986, using a three-step English system (e.g., kisa.or.kr). Later, a two-step Korean system, such as “Korean.kr” (e.g., 한국인터넷진흥원.kr) and a two-step English system (e.g., kisa.kr) were introduced in 2003 and 2006, respectively. The introduction of the “.한국” domain enabled the use of Korean business names, brand names, and names in websites, increasing the Internet accessibility of people who are not familiar with the use of English, and, by extension, it contributed to the enhancement of domain usage benefits. As of January 2016, there were 1,080,382 registered national domains in Korea, and the number of domain registrations per “english.kr”, “korean.kr” and “korean.한국” is as follows.

106 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix ] ]

107 2017 , KISA (Unit：case) [ (Unit：case) lution lution Third level domain level Third ute Resolution Center p me me (kisa.or.kr) that the user ee according to Article 16 of es was at its highest in 2016, 2016, in highest its at was es information and communications er generic top-level domains have operty Organization (WIPO), one s increasing dispute among domain .xyz, .cam new top level domains. level top new .cam .xyz, KISA ICT Dis KISA disputes on .kr .한국 country code computers recognize. [ are managed and operated by the being utilized as a system that provides d by Internet Corporation for Assigned Second level domain 64 40 37 74 40 263,118 60,737 35,152 717,094 English.kr Korean.kr Korean.한국 Committee Dispute Resolution Registered to Internet Address Dispute Reso Dispute Address Internet to Registered Resolution Dispute Number of Registered National Domains (as of 2017. 5) of 2017. (as Domains National of Registered Number Domain Name System Name Domain (DNS) is a system that changes the domain na The DNS for Korea’s ccTLDs (krDNS) was designated as the major Korea is operating a Internet Domain Dispute Resolution Committ Resolution Dispute Domain Internet a operating is Korea Meanwhile, Meanwhile, with emerging new generic top-level domains, there i Total 80 52 50 106 59 Total 1,076,101 Case C. Domain Name System (DNS) System Name Domain C. [Table 3-2-2] [Table 3-2-3] accesses on the Internet to an IP address (121.156.115.59) that name name registrants and trademark owners. At World Intellectual Pr of the five domain name dispute resolution institutions selecte also increased by 16%. Names Names and Numbers (ICANN), the number of registered dispute cas recording 3,036. This was a 10% increase from 2015. Disputes ov the "Internet Address Resources Act", and resolving domain name top-level domains, .com .net traditional top-level domains and KISA’s KISA’s Internet Address Resource Department. As of 2017, it is infrastructure (2003) and a key national facility (2015), which (2015), facility national key a and (2003) infrastructure Domain Category 2012 2013 2014 2015 2016 Category Registered Country Code General Domain General 16 12 13 32 19 2017 Korea Internet White Paper | Part 3 Infrastructure

services for 1.08 million national domains, indispensable public goods offering Internet services in the finance, broadcasting and communication, and e-commerce fields, and the core infrastructure of Korea’s Internet services. The krDNS is distributed and operated among 15 sites (nine in Korea, and five in other countries) to ensure stable Internet service, and, since 2010, it has been deploying an anti-DDoS system in an effort to strengthen security against DDoS attacks, with a total of five sites currently operating the system. The root DNS is a DNS system that is the foundation of DNS, encompassing all from ccTLDs (.kr, .한국, etc.) to gTLDs (.com, .net, etc.). ICANN’s Internet Assigned Numbers Authority (IANA) manages and operates it, and is distributed and located around the world to accommodate global DNS traffic and improve safety. As of February 2016, there is a total of 574 servers, composed of 13 original servers (USA, Sweden, Netherlands, and Japan), and 561 replicated servers (mirror sites). Since the occurrence of the 1.25 Internet Security Incident (2013), four replicated servers were introduced (KISA, KT, SKB, and KINX) to secure Internet stability. In the case of Korea’s krDNS, DNSSEC (DNS Security Extensions) was introduced in June 2011 for the government domain “go.kr”, and its application was completed in September 2012 for entire ccTLDs. The DNSSEC application was completed for ccTLDs, amid a gradual expansion and application to the general DNS operated by a domain registrant and cache DNS operated by ISP. KISA has been making a steady effort for the stable management and operation of krDNS by improving its monitoring and DDoS-response system against various cyber attacks, and by introducing and operating DNSSEC in collaboration with domestic and overseas agencies. KISA is doing its best to build a safe environment by recommending continuous inspection for error and security holes in general DNS and cache DNS being operated in Korea, and is supporting the development of related technology, education and consulting to upgrade the DNS management in the private sector.

108 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 109 d Standards (KATS). ported by the TTA, and the ittee and three project groups respond to the development. developing a private market market private a developing (STC2) (STC2) in 2014 to strengthen e requirements and e capabilities) requirements led Standard Subcommittee of tee in support of such initiatives. ely ely divided into organizational rdization in IoT is noted for its l 2014, the existing RFID (Radio ndard for cloud computing and he development of ISO/IEC 20546 Computing Standardization Forum Standardization Computing g of professionals who were working rgence Forum and M2M/IoT Forum tion through the Cloud Computing ations Technology Association (TTA) ed based on the approved standards. Group, and OneM2M Project Group) onal standardization include the ITU-T port of the international standardization oud oud Computing Project Group (PG420) on of big data, develop related industries, In November 2013, the TTA formed the IoT Special Technical Comm Cloud computing standardization activities in Korea can be larg Following the organization of the JTC1 WG9, and the launch of t In 2012, the Big Data Forum was established as a major gatherin A. Standardization Trend 3. Internet Technology to standardize IoT/M2M (machine-to-machine) technology. In Apri (IoT Convergence Service Project Group, IoT Networking Project Frequency Identification)/USN (Ubiquitous Sensor Network) Conve were merged to form the IoT Forum, while the the IoT domestic Forum focused industry- on standards development. Domestic standa SC38 SC38 Advisory Committee under theKorea Agency for Technology an SG13 SG13 Study Group under the Korea ITU Research Committee and sup formed the Standard Development Committee, which is tasked with tasked is which Committee, Development the standardization activities, and re-assigned the existing Cl Standard as a project group the (SPG21) under the STC2. Moreover, the Cloud formed demand-based standard. Other organizations supporting internati Standardization Forum, and domestic committee activities in sup programs. The TTA created the Cloud/Big Data Special Committee standardization through the TTA, private sector-led standardiza big data, and created the Big Data Project Group (SPG22). formed the Special Technical Committee (STC) to develop the sta the develop to (STC) Committee to achieve productive application, Technical standardization, and promoti and Special strengthen competitiveness. In the 2014, the Korea Telecommunic formed and 20547 in April 2014, the JTC1 WG9 Council The was ITU-TSG13 approved organizedthe Y.3600 to (Big data-cloud computing bas standards, and additional follow-up standards are being develop ITU-T SG13 has been working under the Korea ITU Research Commit 2017 Korea Internet White Paper | Part 3 Infrastructure

efforts to mediate the positions of domestic industries and business entities, and create a suitable ecosystem, instead of focusing on standardization to satisfy the interests of an individual industry or business entity. In May 2014, the MSIT announced the Basic Plan for IoT, and released the IoT R&D Strategic Report as a follow-up in December 2014. The IPv6 Project Group (PG210) and Internet Address Resource Project Group (PG211) of the TTA worked on IPv6 address issues and IAR (Internet Address Resource) issues, respectively, but they were merged to form the IPv6 Address/IAR (PG222), which has been working on the standardization of IPv6 address conversion technology and DNS technology, and providing policy support under the leadership of the ETRI and the KISA since 2014. With SK Telecom recently formalizing the commercialization of pure IPv6 addresses under LTE technology, the development of domestic standards, such as those for IPv6 address conversion technology, DNS security technology, and guidelines for IPv6 address distribution, is well underway. National standardization activities are carried out by the TTA and ICT standards forums. The Internet-related ICT standardization forums include the SDN/NFV Forum, HTML5 Convergence Technology Forum, and IETF Mirror Forum, among others.

[Table 3-3-1] Main Activities of Internet-Realted ICT Standardization Forum

Forum Activity Website y Held with the goal of preparing the foundation for the vitalization of next-generation network SDN/NFV technologies. - Establishing SDN/NFV development strategy and activation plans SDN/NFV - Leading open infrastructure base by developing SDN/NFV standard sdnnfv.org Forum framework - Sharing research results and expanding the market through authentication of SND/NFV based service y Korean forum held in response to the W3C, the main international standardization organization for the Internet HTML5 - Reflecting W3C international standards to domestic technology and Convergence creating domestic standards based on W3C standards html5forum.or.kr Technology - Working to spread W3C standards in Kora through supporting HTML5 Forum convergence products, etc. - Leading the HTML5 convergence industry through cooperative efforts for standardization by the private sector yKorean forum held in response to the IETF, an organization working in the area of international standardization - Supporting standardization infrastructure based on the requests of the IETF Mirror industry ietf.or.kr Forum - Providing new information on standardization institutions inside IETF - Analyzing correlation between the contribution activities and patents at the individual proposal stage

[Websites of each forum]

110 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 111 be an OTP device, and an s, s, Accredited Certificate and word verification is one form s by the password system. es not need to hold a specific is also highly secure because it usly set password shared by the e e to its convenient verification. more more than two methods among 9). damaged. rmation distributed. It includes . It is also not easy to find ways ructure, ructure, or results of actions using culty is that it is hard to analyze urther urther necessary hardware or costs. nd dynamic, depending on whether ction-based authentication includes uires identification by Certification ng one method. This is being used used being is This method. one ng ding the authentication token. Building e tokens can be classified into hardware ition, iris scanning, fingerprint scanning, signing pattern, and signature pressure s in the cyber environment and provides identity, and OTP (One Time Password) Password) Time (One OTP and identity, ion of device which verifies the legitimacy Knowledge-based authentication verifies users by using a previo The user proprietary-based authentication verifies users on hol Authentication technology identifies legitimate users or device Biometric authentication verifies users by their unique body st Multi-factor authentication technology verifies users by using 1) Development of Authentication Encryptionand Technology the reliability and non-repudiation of authentication characteristicsuser like Certificate, Accredited authenticat of the info technology. server and user, and has the advantage of convenience without f of knowledge-based authentication, and many systems verify user Yet this is also the method that has the most security flaws du flaws security of device, authentication most of anonymity the which secures the user's has that method the also is this Yet Knowledge-based authentication can be categorized into static a or not the password was previously shared among users. The pass the authentication system for user tokens is difficult, Authority (CA) or Registration and Authority (RA) req at least once. Th example of a software token is the Accredited Certificate (X.50 forms and software forms. An example of a hardware token would OTP OTP devices, and heart rates and NFC bracelets. their body. Examples of biometric authentication is their of body. authentication Examples face biometric recogn the three listed above. It can provide strong as security a than set usi of passwords and smartphones, passwords and check card vein recognition, heart rate recognition and ECG recognition. A voice recognition, recognition of typing rhythm, recognition of recognition. This method is very convenient because authentication the token user and do does not need any prior knowledge.uses It the user's unique physical information. However, the diffi biometric patterns or construct and maintain a biometric system to replace the original when biometric information it has been B. Authentication Technology 2017 Korea Internet White Paper | Part 3 Infrastructure

The emergence of smartphones have spread the authentication of PIN and pattern, and the heightened the preference for convenient and secure methods like USIM (Universal Subscriber Identity Module) verification, fingerprint scanning and voice recognition. FIDO is actively advocating the implementation of smart device authentication in the Internet, and in December 2014, they presented FIDO 1.0 standards. FIDO technology is being used for financial transactions by Samsung Pay, KEB Hana Bank, and Shinhan Bank as FIDO-based fingerprint verification service. Encryption technology forms the basis for information protection with secure storage and transmission of information. Previously encryption was constructed around safety for crucial information (confidentiality, integrity, etc.), but it is being expanded to security for Database Management System (DMBS) (encryption that preserves form), cryptographic algorithms capable of cryptographic operation, lightweight cryptography for IoT security, and quantum key distribution for a quantum computer.

2) Replacing Resident Registration Number

With development of ICT technology, online economic activity is increasing. In the past, online identification was done with the Resident Registration Number (RRN), but the vast amount of leakage and identity impersonation has led to different identification methods online. Replacements include i-PIN, smartphones, and Accredited Certificate. They were introduced to reduce the usage of RRN, and provide identification for online services to prevent multiple registrations by one user, provide related services, and provide adult verification.

[Table 3-3-2] Distribution of Alternative Means For RRN

The Ministry and Type Providing Agency Content Office Concerned

Private NICE, SCI, KCB Identity verification using I-PIN KCC i ‒ PIN Public KLIDcertification MOI Accredited Koscom, KICA, CROSSCERT Identity verification using the user’s MSIT Certificate and KFTC, KTNET Accredited Certificate Identity verification using the SMS Mobile Phone SK Telecom, KT, LG U⁺ certification of a mobile device registered KCC in the user’s name

[KISA, 2016]

i-PIN is issued through its website, or the i-PIN verification window. Users can receive it by providing personal information and going through verification by smartphone, Accredited Certificate or face-to-face identification. In the case of lack of online identification methods, citizens can visit community centers

112 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 113 Korean citizens. Most of the nsmitted, nsmitted, received or stored in is used mostly in offline shops secondary verification. r identity through the My-PIN storing paper documents. ument from the start and paper it the Accredited Certificate and volume of volume the entire e-document ernment ernment revised the "Framework ization process such as scanning. a credible institute appointed by er that can be issued along with e the safety and reliability of the , and handles various electronic ops. , no further registration is necessary. ed if the document is stored at the ations on the Composition Procedure rnation certification of e-documents. d at the Certified e-Document Center, -commerce -commerce based on "Digital Signature original paper document is destroyed. Certificate, Certificate, stored in drives like USB or It also introduced a system that generates Address Mobile phones are a means of communication universally used by My-PIN My-PIN is an offline method of identification without RRN. This Accredited Accredited Certificate is a cyber verification used by online e The term “electronic document” means information, prepared, tra Due Due to the for the demand safe storage of storage e-documents, The stored documents are divided into two types: original e-doc C. Certifiede-DocumentCertifiedCenterand Electronic or the i-PIN issuer. i-PIN can be used by registered ID/PW and the password together to verify their identity. external hard drives and locked with a password. Users can subm Act." Act." This is issued by to the related institutions Accredited citizens own one. To use mobile phones as a verification method like airports and large supermarkets. My-PIN is a 13 i-PIN digit or numb through the "manage i-PIN" menu. Users can number verify without thei RRN. Mobile phones can be purchased by visiting dealers or dealer sh In the case of scanned documents, in accordance with the "Regul the with accordance in documents, documents that are converted scanned to of e-document through thecase electron the In Thus, the Certified e-Document Center can lessen the burden of and Methods of Electronized Document," if the document is store it is is as the stored even recognized document if original the a legal effect that the document has not been forged or falsifi or forged been not an electronichas form by an information processing system.Act document on The Electronic gov Documentthe and Transactions" in that 2012 to increas production, distribution, and effect storage of electronic documents. legal a Certified e-Document Center. The Certified e-Document Center is the government that safely stores e-documents document-related businesses, for including otherthe issuance partiesof non-alte 2017 Korea Internet White Paper | Part 3 Infrastructure

at the Certified e-Document Center has been steadily increasing every year. Major e-documents stored in the center include various certificates and financial e-documents, and the types of stored documents are gradually becoming diversified.

[Table 3-3-3] Volume of Stored e-Document at the Certified e-Document Center (Unit：TB)

Year 2011 2012 2013 2014 2015 2016 Volume 75 124 154 177 215 269

[KISA, 2017]

The address is composed of “account (ID) + separator (#) + registered name and property values." The account must be 2 to 20 Korean characters (2 to 40 if English characters are included) long, and the registered name must be 3 to 20 Korean characters (3 to 40 if English characters are included) long. The property value is divided into four categories: government, corporation, business, and individual. The address can be freely chosen by the applicant, and be registered and used in the form of “Honggildong.Internetsysteminnovation#MSIT.go,” “Honggildong#KISA.co” or “fruits#seoulsuper market.bz.” KISA is in charge of the registration and management of Certified Electronic Address. Users can register for it through the identification by accredited registration agencies (six including Signgate) and the validation of KISA.

114 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 115 n 3) ted on January 25, 2016) that and revised from January 2016 mission Financial Investment Services eated a base for electronic stock market. sion of "Electronic Financial Transactions sed to include originally offline transactions, businesses for the introduction and activation small securities (Article 14-5) registration 118-6) 118-4~Article (Article 167 Article 118-15, (Article brokerage investment online of clause 1) 118-17) (Article investors regulating Electronic documents with intention of guarantee createdguarantee intentionof with Electronicdocuments Eased Eased the capital requirement for small businesses of Regulations on online investment brokerage such as Created a basis for "Electronic Securities System" in which which in System" Securities "Electronic for basis a Created issuance issuance and real distribution of of securities are issuance conducted without registration electronic by solely securities guarantees of Civil Act Article428-1 clause 1. (Article 4-2) (Article 1. by clause Article428-1 Act guarantors Civil of guarantees are exempt from the written-only to KRW 300 million), lowering the entry barriers for small small for barriers paymententry the lowering gateway, million), 300 KRW escrowto and EBPP (fromFinTech start-ups. KRW 500 million crowdfunding. of introduction the for system registration Detailed specification on the revised law for financial investments. and market y y y y -Criteria for online investment brokerage business business brokerage investment online for - Rangeof venture companies and SMBsthat can issue -Criteria case in etc. regulations, relaxed with securities - for Limit - Limits to investment amount, etc. Protecting and enacted enacted) Partial revision Partial Legislation proclamation) Partial revision Partial Partial revision Partial (2016. 6. 30 enacted) (2016. 30 6. (2016. proclaimed) 3. 29 (2016. 2. 4 enacted) 4 2. (2016. (2016. 1. enacted) 25 proclaimed, 2016. 1. 25 (2016. 1. 12 proclaimed) (2016. 1. 19 proclaimed) (2016. 1. proclaimed, 25 (2016. 3. 22 proclaimed) ②Enforcement regulation ①Enforcement ordinance ※ Revised※ law：2015. 7. 24 (enacted within 4 years of(enactedyearswithin 4 Enactment and Revision of Internet-related Laws(2016. 1~2017. 1~2017. Laws(2016. Internet-related of Revision and Enactment LawDate Legislation/Revision Legislation/Revisio of Points Major Act Electronic Electronic Markets Act Transactions Act Major laws concerning the Internet industry and service passed Transactions Registration of Electronic Financial Documents and [Table 3-4-1] A. Internet Promotion 4. Legal System For Internet For System 4. Legal set the regulations for crowdfunding. Meanwhile, laws were revi like "Electronic Registration of Stocks and Bonds Act" which cr of FinTech service, and the revision of "Financial Services Com and Capital Markets Act" (proclaimed on July 25, 2015, implemen to March 2017 are as in the [Table 3-4-1]. It includes the revi the includes It 3-4-1]. [Table the in as are 2017 March to Act" to reduce the registration criteria for electronic fiance Stocks and Bonds and Stocks Enforcement Rule/ Rule/ Enforcement Framework Act on Financial Investment Investment Financial Decree Enforcement Services and Capital Capital and Services 2017 Korea Internet White Paper | Part 3 Infrastructure

Law Legislation/Revision Date Major Points of Legislation/Revision Enforcement Decree of the Framework Act Partial revision y Relaxed regulations on human resources and capital by on Electronic (2016. 12. 27 the Certified Electronic Address (Article 15-4 clause 1 item Documents and proclaimedㆍenacted) 1, item 2, Article 15-14 item 1, item 3) Transactions Intelligent Robots Partial revision y Integrated quality assurance and KS certification on Development and (2016. 1. 6 intelligent robots to lessen company burden and prevent Distribution proclaimedㆍenacted) consumer confusion (Removed Article 10~Article 16) Promotion Act Legislation y Specification of "Three-Dimensional Printing Industry ①Enforcement ordinance Promotion Act" and details necessary for its enforcement (2016. 12. 20 proclaimed) Three-Dimensional - Process of establishing plans for 3D printing industry (2016. 12. 23 enacted) Printing Industry promotion ②Enforcement regulation Promotion Act - Criteria and process for selecting quality certification (2016. 1. 23. proclaimed, Enforcement Rule/ authority enacted) Enforcement Decree - Standard for 3D printing equipment quality - Forms for 3D printing service registration ※ Revised Law：2015. 12. - Education of 3D printing technology and safety issues 22 proclaimed, 2016. 12. 23 enacted Enforcement Decree Partial revision y Reduced process for location based service registration, on the Protection, (2017. 3. 8 proclaimed, mergers and acquisitions (Article 2 clause 5, Article 11 Use, Etc. of Location enacted) clause 1 item 2, Article 11 clause 3 item 2) Information

[Office of Legislation (reconstructed), 2016-2017]

B. General Information Protection

Data protection in the public sector includes "Electronic Government Act," "Act on Promotion of Information and Communications Network Utilization and Information Protection, Etc.," "Electronic Financial Transactions Act" and "Enforcement Rule of the Use and Protection of Credit Information Act." One of the laws that regulate both the public and private sector is the "Act on the Protection of Information and Communications Infrastructure," which protects major communications infrastructure from various infringements. There is also the "Act on the Promotion of Information Security Industry" which constructs the infrastructure for information security industry and strengthens its competitiveness.

116 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 117 nformation and Etc."5) (2016~2017. ng the Internet and phone authority,theyphone provides prospectiveprovides and state details the and 1) item 22-2 (Article . is for designating an an designating for is denyservice to users for improvement to the the to improvement for personal information to le item 1 76 clause 12) ns network, the KCC ornetwork, nsKCC the tem 2) tem ntributions;Revenues2. on becomes awareof becomes aon ring information by fraudinformationringby r shall control, supervise supervise control, shall r nformation,and may fine the app function. (Article function. app the late any provision of this 50 item 150 clause 2) r the loss, theft, leakage, leakage, theft, loss, the r otection Act (Article24-2otectionAct tate their service revenue revenue service their tate Security Agency shall be be shall Agency Security shall take measures for for measures take shall illegible process will have have will process illegible year unless it is otherwise otherwise is it unless year 3 clause3 and clause 4) elecommunicationsservice . (Article 47 item 6, item 7) item 6, item 47 (Article . o less than KRW 30 million million 30 KRW than less o 47-5 item 4) mationcommunicationsand partially omit the certification certification the omit partially as "providing (including the (including "providing as dards or have gone through tten out in form and the trustee trustee the and form in out tten tion for an organization.an (Articlefortion ist of illegalinformationofist (Article In case of personalofinformationcase In throughleakedtelecommunicatio gathe institutionbe an toconfirmed have providerswho Service telemarketerthe when withoutconsent done be Telemarketingcan Expenses necessary for the business affairs of the Internet and Unified the terminology according to theto accordingterminology theUnified Information Pr Personal simila or services communications and information of provider A persona Where responsible for protection of personal informati fo compensation and profit,penaltyconfiscationofImplemented Stated clearly the process for certification and provided a bas a provided and certification for process the clearly Stated t upgraded is certification without providers business for Fine If smartphone app developers andcompanies needItis forbidden accessfor smartphone developersapp companiesand to to smart mustget theconsent from information provider entrusting when thirda party (Article 7) and item 6 25 64-4) 44-7 item 1 clause44-7 6-2) Included "illegal transaction of personal information" to the l the to information" personal of transaction "illegal Included countryanotherinformation topersonal transferof the Defined stated by other laws or users. (Article 29) internationalcertifiedbeenby stanprovidersbusinesshaveIf topossible be informationmay personalitprotect to measures throughinformationcertifiedfalseor with been have who Those Article and 10 item 47 (Article away taken certification their Institutions cannot keep personal information for more than one than more for information personal keep cannot Institutions s certification,receive and must businessesTelecommunications by the standards mandated by presidential decree. (Article 47 i process. (Article 47 item 3) Security (Article Agency. item52 4) funded by the following financial resources: 1. Government’s co Government’s followingfinancialresources:1. the by funded accrued from businesses; 3. Other revenues accrued from operati and educate the trustee to ensure that the trustee does not vionottrustee thedoesthat ensuretrustee tothe educate and servicerequestthei providerthe can blockdelete to or KISA Artic 32-3, (Article comply. not do who those to million 30 KRW mustnotify the user about this information. (Article item49-2 item 3, etc.) chapter. (Article 25 item 4) forgery, altercation or damage of personal information by the t provider. (Article 32 item 2, item 3 and Article 75 item 2) item 75 Article and 3 item 2, item 32 (Article provider. organizationcertificationdedicatedexclusivelythe to process informationtofor necessaryaccessnot refusing themgrant to 22-2 item 2) item 22-2 customers on the source of their personal information (Article services. (Article 24 item 4) item 24 (Article services. fact of violation of this Actinfor or of other etc. relevantimmediately,if improvementnecessary,measuresreport the and provider, statute, the of he/she representative or owner business (Article 76) (Article privilege access mandatory not is and is what clear make should reasonsand for the data they beforeneed they get user consent In case of entrusting personal information, the act must be wri Hearingis available for thosewho wantto cancelthe certifica y y y y y y y y y y y y y y y y y y y y Communications Network Utilization and Information Protection, Protection, Information and Utilization Network Communications Revision Status and Major Points of the "Act on Promotion of I of Promotion on "Act the of Points Major and Status Revision their one Enactment *Some are*Some (2016. 6. 2) 6. (2016. (2015. 12. 1) Enactment procurement Proclamation enacted with with enacted 2016. 7. 25,2016. 2017. 3. 23) 2016. 9. 23, Revision Date Major Point (2016. 3. 22, Proclamation 22) 3. (2016. Partial revision Partial Partial revision Partial [Table 3-4-2] *Enacted one by one *Enacted 2017 Korea Internet White Paper | Part 3 Infrastructure

Revision Date Major Point permission to access), entrusting and strong" and stated that the government may penalize 3 out of 100 of their revenue on service providers who do not comply. (Article 63 item 2, Article 64-3 item 1 clause 8) y The Korea Communications Commission may recommend a provider, etc. of information and communications services violating this Act with respect to the protection of personal information to take disciplinary action against the responsible person (including its representative and responsible executive officers). (Article 69 item 2 clause 2) y A person who commits defamation of another person by disclosing a false fact to the public through an information and communications network purposely to disparage his/her reputation shall be punished by imprisonment with labor for up to seven years, by suspension of qualification for up to ten years, or by fine not exceeding KRW 50 million. (Article 70-2 and Article 71 item 2) y A person who fails to observe an order issued by the Minister of Science, Information Technology or the Korea Communications Commission may be fined an amount not exceeding KRW 30 million. (Article 76 item 1 clause 12)

[National Assembly of Korea (http://likms.assembly.go.kr/bill/main.do), 2016]

C. Personal Data Protection

Before the "Personal Information Protection Act" of November 2011, individual laws were enforced separately according to industries, like the "Act on Promotion of Information and Communications Network Utilization and Information Protection, Etc.," the "Credit Information Use and Protection Act," etc. After the Personal Information Protection Act, the law acted as a general law that regulated areas other individual laws could not take care of, and the "Act on Promotion of Information and Communications Network Utilization and Information Protection, Etc.," and the "Credit Information Use and Protection Act" are now acting as special laws. Other laws also include regulations on personal information, such as the "Electronic Financial Transactions Act," the "Framework Act on Social Security," the "Medical Service Act," the "Framework Act on Education," the "Electronic Government Act," the "Resident Registration Act," and the "Housingn Act." Among these laws, if there are any problems on personal information protection, the more specific laws are applied first. However, if there is no regulation by special laws, they are subject to the general "Personal Information Protection Act."

118 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 119 Utilization and Utilization Information they are not laws, they affect unications Act, which is playing ed "Telecommunications Business the the National Assembly, and most dvertisements Guideline" will Guideline" also dvertisements ation Reforms" by the Federation , and can thus act as a hindrance ulation is ranked 105th, almost at implemented since June 2016, and However, none However, of them passed and proposal that passed is the requirement dustry, but positive regulations based users users by mobile text or mail whenever ser protection on the Internet. On this rts by the government. ersonation. The revision passed on March ied (30.6%) and satisfied (6.0%), showing are acting as an obstacle to the domestic s were proposed to the National Assembly, respond to the quickly changing technological by the World Economic Forum, Korea's global Global Competition Report According to the The The "Act on Promotion of Information and Communications Network Among Among the "Telecommunications Business Act" revisions, the only In addition, two guidelines were presented by the KCC. Although Regulation is necessary for the fast growing Korean Internet in E. Internet Regulations D. User Protection Protection, Etc." can be said to be the representative law on u and most of them too are aimed at protecting subscribers. law, from June 2016 to May 2017, 49 revisions were proposed to protecting at aimed are too them of most and for businesses to provide protection against identification imp they are all pending in the National Assembly. For the Telecomm the For Assembly. National the in of pending them were about protecting all users, with only are two exceptions. they a critical role in 32 revision the internet environment, mobile 15, 2017 and is to be enforced from March 2018. Under the Act," revis the telecommunications businesses are required to notify they they sign a service contract. user protection. The "Right to Be Forgotten Guideline" has been from July 2017, the for "Privacy Online Protection A Customized be implemented. competitiveness is ranked 26th but the burden of government reg the very bottom. According to the "Sentiment Indicator of of Korean Industries, Regul people answered neutral (63.4%), unsatisf on traditional industries and not complying to global standards that people still feel the burden from regulations despite effo Internet industry. With the existing regulations, it is hard to environment or the change and convergence of various industries to creativity and innovation. 2017 Korea Internet White Paper | Part 3 Infrastructure

The governments accordingly have tried to reform regulations. The past government opened a Regulatory Policy Committee for a ground-breaking and strong reform that will support economic growth. They also implemented "New Industry Investment Committee" to improve regulations with a new reform method of "improving principle and stating exceptions," while promoting on-site examinations, operating sites for citizens to file complaints, and opening reform groups in each Ministry. The government has the goal to shift the paradigm by 1) improving negative regulations 2) permission first, regulation later 3) regulation decided by the private sector instead of the public sector.

120

Part 4 International Cooperation

1. Internet Governance

2. Cooperation on International Data Protection 3. Cooperation on Personal Data Protection

4. International Internet Status 2017 Korea Internet White Paper | Part 4 International Cooperation

1. Internet Governance

Whereas the governance of the Internet means the coordination of Internet address-related policies such as IP (Internet Protocol) and domain names, the governance on the Internet represents all affairs regarding the Interett, such as Internet access costs, SPAM, network security, content, e-commerce, privacy, and human rights. Previously, Internet governance was about domain names and IPs, but the area is expanding to cover a vast definition of governance. Active discussions on Internet governance are also taking place in Korea. In September 2013, the Asia-Pacific Region Internet Governance Forum (APrIGF) was held in Incheon, Korea. In October of the same year, the 3rd Seoul Conference on Cyberspace was held in Seoul, which serve for Korea to lead discussions in the area of cyberspace. Moreover, in April 2014, an open seminar on Internet governance was held, in which there were information exchange and a collection of opinions. At the seminar held ahead of NETmundial, there was an exchange of relevant information and discussions on healthy global Internet ecosystems. The Korea Internet Governance Alliance (KIGA) was founded in April 2012, and it was expanded and reorganized to become the “Multidirectional Korea Internet Governance Alliance” in November 2014 to include various Internet-related issues, and encourage more participation. Korea has submitted the Internet governance principles to the NETmundial meeting held in Sao Paulo, Brazil, in April 2014. The principles supported an open and safe global Internet based on the participation of many stakeholders through accessibility, multistakeholderism, flexibility, engagement (decision-making based on global participation), security, and balance, which are essential to the discussion on Internet governance. Furthermore, it mentioned the need for seeking various solutions that are optimized per area and per issue, while supporting the multistakeholder-based Internet governance system. At the 50th ICANN meeting held in London in June 2014, Korea proposed four standards of the comprehensive participation of marginalized countries, the transition of the IANA management authority based on sufficient discussion, the improvement of the GAC role, and the arrangement for the procedure of establishing ICANN responsibility for a successful Internet governance system. To respond to the international discussion that began after the announcement of the US government

124 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix 125 d in the final version in November 2013, and and 2013, November in nguage nguage Project, co-promoted 016. December 2014, and in May, ciples in forming key positions in October 2014. KIGA submitted Korean model since then. KISA lacing measures to strengthening as a project from 2016 to 2017. governance capabilities for young be able to strengthen its influence ea ea as part of ICANN's globalization the end of 2015 and further agreed uring the independence of the new processes on major Internet-related utives of international organizations ent rights in March 2014, Korea has rtunity for organizational participation s and graduate students. It is aimed directly communicate with international ilities. ilities. The of majority the principles were reflecte submitted KISA and ICANN Singapore headquarters signed MoU on cooperation Through the establishment of the ICANN Seoul office, Korea will in the new system, including ensuring geographic diversity, ens diversity, geographic ensuring the Korean Internet community including statement to ICANN four times, September, in December system, 2015, etc. new Korea has provided the the in main prin organization that would be responsible for managing IANA, and p ICANN’s responsib Kor in implemented first was 2015, to 2014 in on January 2, ICANN 2014 opened and a Seoul ICANN KISA office. by The National La strategy, and has been spreading around the world and ICANN based agreed on on a the new project based on the Seoul office at The Internet Governance Academy is a program for strengthening people in the Asia-Pacific region, including university student on the transition of the international Internet address managem formed formed IANA WG, a working group for IANA transition under KIGA to promote the Asia Pacific Internet Governance Academy (APIGA) at establishing base for major advancement by providing an oppo and activity to the participants through discussions with exec of the IANA transition sent to the US government on March 10, 2 10, March on government US the to sent transition IANA the of and peers. on future international issues, as domestic Internet users can organizations and participate in international decision-making policies. 2017 Korea Internet White Paper | Part 4 International Cooperation

2. Cooperation on International Data Protection

KrCERT/CC of KISA is leading the prevention of international cyber crimes by participating in Forum of Incident Response and Security Team (FIRST) and Asia Pacific Computer Emergency Response Team (APCERT), and they are actively involved in the discussion to further cooperation between countries. They are also educating developing countries on the response to cyber crimes and personal information infringements. Every year since 2005, KrCERT/CC are educating developing countries in the Asia-Pacific region on creating and maintaining a team in charge of response to infringements. In response to cyber crimes, creating a network of human resources is more important than anything, and this event is giving both parties an opportunity to build trust. In 2016, 24 people from 23 countries including Vietnam, Thailand and Moldova shared their know-how on cyber security system and CERT. As of 2016, 260 people from 50 countries have participated in APISC (Asia Pacific Information Security Center). As cyber attacks came from across borders, 2016 was the year when cooperation between countries were strengthened. KrCERT/CC signed MOUwith VNCERT, ETDA. They also cooperated with institutions from US, UK, Spain, etc. and shared known cyber security threats and discussed methods to further personnel exchanges. KrCERT is also working closely with CNCERT/CC and JPCERT/CC. The Korea, China, and Japan CERT opens a discussion every August to inspect collective results and discuss how to improve their cooperation. In particular they compared and inspected their weaknesses in 2016. The fifth discussion in 2017 will be held in Korea. To meet the demand for cooperative action, KISA opened a Cybersecurity Alliance for Mutual Progress (CAMP) in July 2016. CAMP is a global alliance consisting of 53 institutions from 40 countries, and is a network platform that promotes a safe cyber world and building trust. In particular, the opening ceremony and 1st committee were successfully held in Korea, and KrCERT/CC was elected chairman and secretariat. CAMP operates a committee and a working group to encourage information sharing and support the improvement of cyber security of member countries, and sets up regular conferences and newsletters.

126 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix 127 on evaluation system, 15 n December 28. Afterwards, Afterwards, 28. December n s s in April 2017. To heighten KITA and related businesses les System (CBPRs), etc. the the role of each After ministry. ultative Body for the Promotion the basic concept of GDPR and core of international cooperation ross-border personal information Korea is a member economy. In contract. a in 3rd countries if they pass the the pass they if countries 3rd in a by GDPR with stronger regulations, n Law Guidelines" which contains eep, Korea can take a more active active more a take can Korea eep, personal data protection evaluation he system to the domestic market. market. domestic the to system he Energy), MOFA (Ministry of Foreign (Ministry MOFA Energy), tee from August 2015, and in 2016 compete in the same conditions as State Council on December 27, 2016, aluation, responding to General Data and Safety) and KCC, have considered nto the EU market. The "1995 European nment nment response to international community's he MOIS, KCC, PIPC (Personal Information The Personal Information Protection Division of KISA is at the With the administration, KISA advocated With registering the for KISA advocated administration, the EU For supporting the registering to the EU personal data protecti Due Due to the "1995 European Data Protection Law " being replaced If EU's data protection is a requirement for our companies to k 3. Cooperation on Personal Data ProtectionData Personal on Cooperation3. for for personal privacy, by registering for EU personal privacy ev Protection Regulation, introducing APEC Cross-Border Privacy Ru EU EU companies without further regulations like having to sign a evaluation. If registered to the system, domestic companies can to support domestic countries looking to introduce themselves i Data Protection Law" allows companies to process EU citizen dat industry/academic/public specialists have formed a joint commit joint a formed have specialists industry/academic/public held 8 face-to-face and written meetings. this regard, KISA, together with MOIS (Ministry of the Interior the of (Ministry MOIS with together stance by in participating in the where privacy APEC, framework KISA, regard, this joining the APEC Cross-Border Privacy Rules system (CBPRs), a c a (CBPRs), system Rules Privacy Cross-Border APEC the joining and submitted the CBPRs application form to APEC through MOFA o in May 2017. This meeting was used as an opportunity to explain to the government created and distributed "European Data opportunity Protectio an main as changes and used need-to-know information was for domestic companie meeting awareness of GDPR, they This opened GDPR guide business meeting 2017. with May in the major it measures will take, as well as and Q&A’s the gover privacy protection laws. protection framework in the Asia-Pacific region. To this end, t of CBPRs" and gathered opinions on the implementation plan that, and they the submitted and application CBPRs contents to the they are working towards stable introduction and operation of t Protection Commission), MOTIE (Ministry of Trade, Industry and Affairs) and the related ministries of APEC have formed a "Cons 2017 Korea Internet White Paper | Part 4 International Cooperation

Since February 2017, they have formed a APEC CBPRs introduction and operation study group and are continuously developing CBPRs detailed certification standards and plans for establishing a detailed operating system. Korea has strived away from the EU and US-based cooperation on data protection, and built the Asia Privacy Bridge with Japan, China, and Hong Kong for international cooperation based on Asia. Korea, China, Japan, and Hong Kong agreed to establish and hold Asia Privacy Bridge Forum in May and December 2016, and to develop a data protection system suited to Asia within the next 3 years. In 2017, they have agreed to hold an academic seminar and an international seminar. In particular, they will focus on the increasing privacy infringements and establish a cooperative damage relief program. Moreover, in the 39th ICDPPC (Hong Kong, 2017. 9. 25~9. 29) they will introduce Asia Privacy Bridge as a side event and lead the discussion as the leading Asia data privacy nations.

128 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 129 2016 , 47.1 3,488 P ITU Statistics , 43.8 3,207 ITU [ (Unit :people) million 1 %, 40.5 2,931 2015 ve steadily increased between n the world in 2016 was 3,488 3,488 was 2016 in world the n ng. The rate from mere 7.8% in 37.2 2014 2,660 rnet usage rates have increased by by increased have rates usage rnet imes imes in 11 years. While the Internet e e rate in the African region remained 2013 usage environment in developing countries. 34.8 2,459 2012 31.7 2,216 29.2 2,014 2010 2011 25.6 1,751 23.1 1,561 20.6 1,365 17.6 1,151 Internet Usage Rate Internet Users Internet of Number 2006 2007 2008 2009 15.8 2005 2016 1,024 Number of Internet Users and Internet Usage Rates in the World the in Rates InternetUsage and Internet Users of Number :estimate The Internet usage rates in developing countries are worth noti The number of Internet users and usage rate around the world ha p

* [Figure 4-4-1] [Figure A. Internet Usage 4. International Internet Status 2005, has reached 40.1% in 2016, which increased by about 5.1 t usage rate in developed countries has reached 81.0% in 2016, th at 21.5%, showing the need for efforts to improve the Internet 2005 2005 and 2016. According to ITU, the number of Internet users i million, up by 281 million from the previous year, 3.3%p and to the 47.1%. Inte 2017 Korea Internet White Paper | Part 4 International Cooperation

[Table 4-4-1] Internet Usage Rates and High-speed Internet Subscription Rates (Unit : %)

Wired High-speed Internet Wireless High-speed Internet Internet Usage Subscription Rate Subscription Rate Year Developed Developing Developed Developing Developed Developing International International International Nations Nations Nations Nations Nations Nations 2005 50.9 7.8 15.8 12.3 1.3 3.4 - - - 2006 53.5 9.4 17.6 15.5 1.8 4.3 - - - 2007 59.0 11.9 20.6 18.0 2.3 5.2 18.5 0.8 4.0 2008 61.3 14.6 23.1 20.4 2.9 6.1 27.5 1.6 6.3 2009 62.9 17.4 25.6 22.0 3.5 6.9 36.6 3.0 9.0 2010 66.5 21.0 29.2 23.5 4.2 7.6 44.7 4.5 11.5 2011 67.7 23.9 31.7 24.6 4.9 8.4 56.8 8.3 16.7 2012 72.0 26.8 34.8 25.7 5.4 9.0 66.4 12.4 21.7 2013 73.8 29.4 37.2 27.5 6.2 9.9 74.0 17.4 27.3 2014 76.1 33.1 40.5 28.3 6.3 10.1 80.9 27.5 36.7 2015 78.1 36.7 43.8 29.4 7.4 11.2 87.1 35.3 44.2 2016p 81.0 40.1 47.1 30.1 8.2 11.9 90.3 40.9 49.4

* p :estimate [ITU, ITU Statistics, 2016]

Norway had the highest Internet usage rate in 2015 with 96.8%, and then Denmark(95.3%), Bahrain(93.5%) followed. Korea marked 89.9%.

[Figure 4-4-2] Internet Usage by Country (Unit : %)

96.3 100 96.8 93.5 93.3 93.1 92.9 92.7 92.0 91.2 90.6 89.9 88.5 88.4 88.2 80 60 40 20 0 Norway Den Bahrain Japan Nether Catar Finland UK Arab Sweden South Canada Estonia New -mark -lands Emirates Korea Zealand

* Excluding cities with less than one million population [ITU, Measuring the Information Society Report, 2016]

Of wired high-speed Internet subscribers per 100 people in OECD member countries, Sweden (51.4%), Denmark (42.8%), and France (40.9%) had the highest numbers. Korea followed with 40.1% with Norway (39.9%) trailing behind.

130 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix 86.5 91.7 32.5 ] ] 95.9 2016 , 131 32.5 2016 , (Unit : %) US (Unit : %) 101.2 ember 35.1 New tions.htm Zealand p D Member D 101.8 36.1 -burg Iceland UK Spain 101.8 -land Switzer Sweden Luxem tions.htm#indicator-chart 36.8 p OECD OECD member countries, Japan -da 102.3 Zealand ) followed. Korea recorded 109.0%. 37.4 Belgium Cana 109.0 37.8 Ice -land Norway Iceland New 116.4 38.5 many Korea 116.5 38.5 Australia South 39.9 /broadband/wireless-mobile-broadband-subscri -nia 122.3 g Norway UK Ger- /broadband/fixed-broadband-subscri 40.1 g US Esto Korea 123.9 40.9 France South -mark s://data.oecd.or 124.7 p 41.8 Nether -lands s://data.oecd.or Sweden Den htt p , Countries (as of 2016. 6) 139.4 Wired High-Speed Internet High-Speed Wired M Subscribers PeopleinOECD 100per 42.8 htt Countries (as of 2016. 6) 2016. of (as Countries , -mark Wireless High-Speed Internet Subscribers per 100 People in OEC in People 100 InternetSubscribersper High-Speed Wireless -land OECD [ OECD 51.4 [ Swiss Den 146.4 Japan Fin 0 0 60 50 40 30 20 10 90 60 30 150 120 For For wireless high-speed Internet subscribers per 100 people in [FIgure4-4-3] [Figure 4-4-4] [Figure was was the highest at 146.4%, and Finland (139.4%), Sweden (124.7% 2017 Korea Internet White Paper | Part 4 International Cooperation

B. International Index Status

Korea is ranked higher in the ICT-related international indexes released by international organizations, such as UN and ITU, and the private organizations, such as IMD (International Institute for Management Development).

[Table 4-4-2] Korea Ranking in ICT Related Index

Instit Rank Remarks Index ution 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (2016) E-Government Rank 1: UK UN -6-1-1-1-3 Development Index Rank 2: Australia ICT Development Rank 2: Iceland ITU 1-21111211 Index Rank 3: Denmark Network Readiness Rank 1: Singapore 199 1115101211101213 Index Rank 2: Finland Global WEF Competitiveness Rank 1: Swiss Index 7 131519181822262728Rank 2: Technological Singapore readiness World Rank 1: Competitiveness IMD 6 1414181414118 1315Singapore Index Technological Rank 2: Sweden Infrastructure

[KISA]

Korea has occupied the top ranking in the ITU’s ICT Development Index consecutively from 2010 to 2013. In 2014, Korea placed second, but regained first place in 2015. Korea was ranked first in 2016 as well. ICT Development Index is an index for comparing and analyzing the ICT development degree of ITU member countries, which aims to assess the ICT development direction, digital gap, and the growth potential of the countries. The index results are based on 11 ICT indicators grouped in three clusters: accessibility, usage, and skills on the ICT development degree and competitiveness.

132 Part 1 Industry and ServicePart 2 Utilization Part 3 InfrastructurePart 4 International CooperationAppendix ] 133 2016 , t or p Re y Country (Index) the Information Societ g Japan (8.37) Luxemburg (8.34) Norway Norway (8.42) Norway (8.35) Australia (8.19) Australia (8.11) Finland Germany (8.31) Germany (8.18) Australia Luxemburg (8.36) Luxemburg (8.28) Japan Netherlands (8.43) Netherlands (8.36) New ZealandNew (8.29) (8.13) Germany Rank Measurin 8 9

10 11 12 13 14 , ITU [ Country (Index) 2016 2015 2016 2015 ICT Development Index Ranking (based on the year presented) year the on (based Ranking Index Development ICT U.K. (8.57) Switzerland (8.50) Iceland (8.83) (8.77) Denmark Sweden Sweden (8.45) Hong Kong (8.40) Denmark (8.74)Denmark Iceland (8.66) Hong Hong Kong (8.46) Sweden (8.47) Switzerland (8.68) U.K. (8.54) South Korea (8.84) South Korea (8.78) 6 7 1 2 3 4 5 Rank [Table 4-4-3]

Appendix

❙ List of major Internet-related organizations ❙ List of Domestic ISPs (as of March 2016) ❙ Abbreviations ❙ Organization Abbreviations ❙ About the KISA 2017 Korea Internet White Paper | Appendix | List of Major Internet-related Organizations

List of Major Internet-related Organizations

■ Government Ministries and Related Organizations

Organization Org(Abbr) Address URL Government Complex-Gwacheon, 47, 1 Ministry of Science and ICT MSIT www.msit.go.kr Gwanmun-ro, Gwacheon-si, Gyeonggi-do 209, Sejong-daero(Sejong-ro), Jongno-gu, 2 Ministry of the Interior and Safety MOIS www.mois.go.kr Seoul Government Complex-Daejeon, 189, 3 Statistics Korea KOSTAT www.kostat.go.kr Cheongsa-ro, Seo-gu, Daejeon IT Venture Tower, Garak-dong 78, 4 Korea Internet & Security Agency KISA www.kisa.or.kr Songpa-gu, Seoul Electronics and 5 Telecommunications ETRI 218, Gajeong-ro, Yuseong-gu, Daejeon www.etri.re.kr Research Institute Korea Information Society 18, Jeongtong-ro, Deoksan-myeon, 6 KISDI www.kisdi.re.kr Development Institute Jincheon-gun, Chungcheongbuk-do National Information Society 7 NIA 53, Cheomdan-ro, Dong-gu, Daegu www.nia.or.kr Agency National IT industry Promotion 10, Jeongtong-ro, Deoksan-myeon, 8 NIPA www.nipa.kr Agency Jincheon-gun, Chungcheongbuk-do 9 Korea Communications Agency KCA 760, Bitgaram-ro, Naju-si, Jeollanam-do www.kca.kr 10 Korea Creative Content Agency KOCCA 35, Gyoyuk-gil, Naju-si, Jeollanam-do www.kocca.kr Korea Institute of Science and 11 KISTI 245, Daehak-ro, Yuseong-gu, Daejeon www.kisti.re.kr Technology Information

■ Associations, organizations, and others

Organization Org(Abbr) Address URL 10F, Hyundai Bldg, Olympic-ro, Songpa-gu, 1 Korea IoT Association KIOT www.kiot.or.kr Seoul 111, Seocho-Jungang-ro 8, Seocho-gu, 2CONsortium of CERT’s CONCERT www.concert.or.kr Seoul 3 Startup Alliance - 423, Teheran-ro, Gangnam-gu, Seoul www.startupall.kr The Korean Council on the 4 Protection of Personal KCPPPI 127, Mapo-daero, Mapo-gu, Seoul www.kcppi.or.kr Information Korea Internet Service Promotion 3104, Nambusunhwan-ro, Gangnam-gu, 5 KISPA www.kispa.or.kr Association Seoul Internet Address Dispute 6 IDRC 398, Seocho-ro , Seocho-gu, Seoul www.idrc.or.kr Resolution Committee Personal Information Dispute 7 PICO 209, Sejong-ro, Jongno-gu, Seoul www.kopico.go.kr Mediation Committee

136 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix g 137 www.kiga.or.kr www.kisia.or.kr www.kinternet.org www.iecoin.or.kr www.ksie.kr www.katp.or.kr www.kiisc.or.kr www.klid.or.kr www.kashi.or.kr www.kcta.or.kr www.kiptv.or.kr www.tta.or.kr l www.koreanbar.or.kr www.cpoforum.or.kr www.digitalcctv.org www.moiba.or.kr Seoul www.onlinead.or.kr am-gu, Seoulam-gu, www.opa.or.kr 9F, IT Venture Tower, Garak-dong 78, Songpa-gu, Seoul Teheran-ro, Samsung-ro, 143-37, Seoul Gangnam-gu, 17F, IT 78,Venture Tower, Garak-dong Songpa-gu, Seoul Hangangno2-ga, 314-1, 10F, 1002, Seoul Yongsan-gu, 3104, center3F, convention SBA Seoul Gangnam-gu, Nambusunhwan-ro, 18, Jeongtong-ro, Deoksan-myeon, Jincheon-gun, Chungcheongbuk-do 18F, Jongno-gu, 85, Cheonggyecheon-ro, Seoul 5F, Chungjeong Tower, 21, Seosomun-ro, Seoul Seodaemun-gu, SeongjiHeights3, 507,Nonhyeon-ro, Seoul Gangnam-gu, 1101,108,Gasandigital2-ro, eumcheon-gu, Seoul 15F, ,Seosomun-ro, ChungjeongTower,21 Seoul Seodaemun-gu, 47, Bundang-gu, Bundang-ro, Gyeonggi-do Seongnam-si, 5F, 111, Jungang-ro Seocho 8-gil, Seoul Seocho-gu, 501, 58, Pangyo-ro255beon-gil, Gyeonggi-do Seongnam-si, Bundang-gu, 4F, 18,Apgujeong-ro36-gil, Gangnam-gu, Seoul TTA KLID KAIT 2F, 350, Seocho-daero,Seocho-gu,Seoul www.kait.or.kr PIPC 209, Sejong-ro, Jongno-gu, Seoul www.pipc.go.kr KIBA KICA KIGA KISIA KIISC KATP KCTA NAHS Seoul 199,Mapo-gu, Baekbum-ro, www.nahs.or.kr MOIBA CISO Korea Seoul 25, Mapo-gu, Mapo-ro, www.cisokorea.org NAHSSeoul 1107,Mapo-gu, 199, Baekbeom-ro, www.nahs.or.kr KDCA Forum Kinternet 7F, 423, SeoulTeheran-ro,Gangnam-gu, www.kinternet.or KoreaCPO ` Korea InformationKorea Security Industry Association Korea Internet Corporations Association Korea Internet Governance Alliance National Association of Hacking & Hacking of Association National Security Korea Council of Chief Officers Security Information Personal Information Protection Commission Korea Association for Policies Telecommunications Korea Cable Television Association Korea Institute of Information Cryptology Security and Information Local Korea Institute Development & Research Korea IPTV Broadcasting IPTV Korea Association Telecommunications Technology Telecommunications Association Korea Mobile InternetBusiness Association Korea Association for ICT for Association Korea Promotion Korea ChiefKorea Privacy Officers Forum National Association of Hacking & Security The Korea The Internet Corporations Association Korea Digital Research CCTV Association 9 8 11 17 12 21 13 14 Korea Onlinead Association15 Ethics The Council Interneton KOA - 7-11, Songpa-gu, Sincheon-dong, 16 Korea Society of Internet Ethics KSIE 18 19 10 27 22 23 24 Korean Bar Association25 26Association Privacy Online Korea OPA -Gangn Teheran-ro8-gil, 16, 18F, Seou 124, Teheran-ro, Gangnam-gu, 20HomeSmart ofAssociation Korea KASH 31 29 28 30 2017 Korea Internet White Paper | Appendix | List of Domestic ISPs(as of March 2017)

List of Domestic ISPs(as of March 2017)

English Name Address Telephone No. URL Service Name Gyeonggi Techno Park Gyeonggi Techno Park, 705, Haean-ro, 1 GTP 031-500-3015 www.gtp.or.kr Foundation Sangrok-gu, Ansan-si, Gyeonggi-do 2 KERIS EDUNET 1F, 64, Dongnae-ro, Dong-gu, Daegu 053-714-0564 www.keris.or.kr KCTV Jeju 3 Broadcasting CABLENET 2, Ayeon-ro, Jeju-si, Jeju-do 070-8145-7746 www.kctvjeju.com Corporation Uspace1B-401, 660, 4 Gavia Co., Ltd. GABIA-IP Daewangpangyo-ro, Bundang-gu, 02-3473-3901 www.gabia.com Seongnam-si, Gyeonggi-do Daou Technology Co., 81, Digitalvalley-ro, Suji-gu, Yongin-si, 5 DAOU 070-8795-0790 www.daouidc.com Ltd. Gyeonggi-do 6 Via Web Co., Ltd. VIAWEB 38, Digital-ro29-gil, Guro-gu, Seoul 070-7010-9110 viaweb.co.kr Shinsegae I&C Co., 7 SINC 10F, 48, Sogong-ro, Jung-gu, Seoul 02-3397-1665 www.sinc.co.kr Ltd. Shinsegae I&C Co., 8 SSEN 10F, 48, Sogong-ro, Jung-gu, Seoul 02-3397-1665 - Ltd. CMB Daegu 9 CMBDONGBU 15, Hwarang-ro, Dong-gu, Daegu 053-218-2000 cmbtg.tv Broadcasting Co., Ltd. CMB Daegu 10 Broadcasting Suseong CMBSUSUNG 15, Hwarang-ro, Dong-gu, Daegu 053-218-2000 cmbtg.tv Branch Co., Ltd. CMB Dongseo 91, Wangsan-ro, Dongdaemun-gu, 11 CMBPLUSONE 070-8125-0119 cmbds.tv Broadcasting Co., Ltd. Seoul CMB Chungcheong 125, Bonghwang-ro, Gongju-si, 12 CMBMUTINET 070-8110-7918 cmbtv.com Broadcasting Co., Ltd. Chungcheongnam-do 901, Pangyo Seven Venture Valley 1 complex, 15, Pangyo-ro 228beon-gil, 13 Africa TV Co., Ltd. AFREECATV 031-622-8456 corp.afreecatv.com Bundang-gu, Seongnam-si, Gyeonggi-do LG U+ Data Network Technology Team, 14 LG U+ Co., Ltd. LGTELECOM 010-8080-4220 lguplus.com 416, World Cup buk-ro, Mapo-gu, Seoul 15 LG U+ Co., Ltd. Xpeed 32, Hangang-daero, Yongsan-gu, Seoul 02-6928-3087 www.uplus.co.kr 16 LG U+ Co., Ltd. BORANET 32, Hangang-daero, Yongsan-gu, Seoul 02-6928-3087 www.uplus.co.kr

17 LG U+ Co., Ltd. PUBNETPLUS 32, Hangang-daero, Yongsan-gu, Seoul 02-6928-3087 www.pubnetplus.ne.kr

18 LG U+ Co., Ltd. KIDC 32, Hangang-daero, Yongsan-gu, Seoul 02-2086-2926 www.kidc.net 6F, Sampung Commercial Area 158, 19 eGIOS Co., Ltd. eGIOSNET 02-2116-8035 www.egios.com Eulji-ro, Jung-gu, Seoul E-Host Data Center 1-509, 5F, IT Castle, 98, Gasan digital 20 EHOSTIDC 070-7600-5528 www.ehostidc.co.kr Co., Ltd. 2-ro, Geumcheon-gu, Seoul 219, Gasandigital 1-ro, Geumcheon-gu, 21 GDSYS Co., Ltd. GDSYS 070-7337-7355 www.gdsys.co.kr Seoul

138 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 139 om.com co.kr et www.sejongtelecom. n www.skbroadband.com www.nhnent.com www.purplestones.co. kr www.sds.samsung.co. kr 02-106-2 02-831-0510 02-509-0434 02-2062-7671 www.kdtidc.com 02-1666-0120 02-1566-5670 www.ilinkkorea.co.kr 02-6000-2715 www.ktnet.co.kr 02-3441-0305 www.cdnetworks.co.kr 02-6233-5393 www.douzone.com 02-2626-3964 www.ldcc.co.kr 02-6330-8001 www.duruan.co.kr 02-6400-4297 www.sk-net.com 063-850-8575 www.kcn.tv 02-6022-4022 www.flexnet.co.kr 02-2029-0342 www.sds.co.kr 053-567-6000 www.scstv.co.kr 02-6007-6009 www.dreamline.co.kr 070-7400-1716 www.sktelink.net Telephone No. URL 031-1588-3820 www.navercorp.com 031-8038-3852 Address 130, Beodeul 1-gil, Namsan-myeon, Chuncheon-si, Gangwon-do 569, Iksan-daero, Iksan-si, Jeollabuk-do 6th Building, Dongil Techno Town, 110, 110, Town, Techno Dongil Building, 6th Digital-ro26-gil, Guro-gu, Seoul 36, Sangil-ro 10-gil, Gangdong-gu, Seoul Seoul Jung-gu, Eulji-ro, 65, Tower, SKT 02-1599-0011 www.sktelec Building, 24, Green Namsan 16F, Seoul Toegye-ro, Jung-gu, Green Factory,Green 6, Buljeong-ro, Seongnam-si, Bundang-gu, Gyeonggi-do 9F,IT 135, Venture Donggwan, Tower Seoul Jungdae-ro, Songpa-gu, SDS, 125,Samsung Olympic-ro 35-gil, Songpa-gu, Seoul Building,7F, Handong 37, Teheran-ro 8-gil,Seoul Gangnam-gu, Gasan 1, Valley, Rubens The 1206, digital 1-ro,Seoul Geumcheon-gu, Namsan Green BuiJung-gu, Seoul ldi ng, 24, Toegye-ro, Tower, 9,SKU Seongnam-daero 343beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do 202, 2nd Venture E&C Dream Tower, 55, Digital-ro 33-gil, Guro-gu, Seoul 701, 1st Kolon Siens34-gil, Seoul Guro-gu, Valley, 43, Digital-ro 805,Shinsegae ICC Digital Center, 61, Digital-ro 31-gil, Guro-gu, Seoul 2F, Station,KT Phone 56, Hannae-ro, Seoul Geumcheon-gu, Yeongdongdaero, 511,Building., KTC 4F, Seoul, Korea Gangnam-gu, Seo-gu, 84-gil, Waryong-ro 23, 3F, Daegu Lotte IC, 179, Gasandigital 2-ro, 2-ro, Gasandigital 179, IC, Lotte SeoulGeumcheon-gu, NG JCN 76, Sinjeong-ro, Ulsan Nam-gu, 070-8121-9547 www.jcntv.co.kr -NET UARD KTNET DUZON English English KDTIDC SK-NET EANNET KCNNET DURUAN FLEXNET SHINBIRO NHN-NET broadNnet NIBDIGITAL 14,Incheon Juanseo-ro,Nam-gu, 032-882-9660 www.nibtv. LDCC-SAFEG SK-TELECOM SEODAEGUCL Service Name DIRECT-HOSTI Name SK Telink Co., Ltd. Co., Telink SK EntertainmentNHN SKTelink TOAST-NET Entertainment, NHN 16, SK Broadband Co., Broadband SK Ltd. CorporationSK Co., Telecom Ltd. SK Samjung Data ServiceSamjung Co., Ltd. Co., Telecom Sejong Ltd. NetworksCD Ltd. Co., Korea ILink INDICLUB CDNETWORKS Dreamline Co., Ltd. Co., Dreamline & Information Lotte DREAMX Communications Co., Ltd. Ltd.Co., SDS Samsung SAMSUNGSDS Naver BusinessNaver Ltd. Co., Platform Duzon Bizon Duruan Korea Cable TVCable Korea Seodaegu BroadcastingLtd.Co., Ulsan CentralJCN BroadcastingLtd.Co., Kumgang BroadcastingLtd.Co., NamInchon BroadcastingLtd.Co., Flexnet Korea Data Co.,Communication Ltd. & Trade Korea Telecommunications Co., Ltd. Purple StonesCo., Ltd. HCLC 41 31 27 37 22 42 32 23 24 25 43 44 33 34 35 29 26 28 36 38 39 40 30 2017 Korea Internet White Paper | Appendix | List of Domestic ISPs(as of March 2017)

English Name Address Telephone No. URL Service Name Daewangpangyo-ro 645beon-gil, Co., Ltd. Bundang-gu, Seongnam-si, Gyeonggi-do 28F, TwoI FC, 10, Gukjegeumyung-ro, 45 NTT Korea Co., Ltd. GIN 02-2156-9000 www.kr.ntt.com Yeongdeungpo-gu, Seoul 4F, 24-6, Ganhodae-ro 3-gil, 46 UL Networks ULNETWORKS 02-396-0100 www.ul-net.co.kr Seodaemun-gu, Seoul Incheon International 47, Gonghang-ro 424beon-gil, Jung-gu, 47 IIAC 032-741-6622 www.airport.kr Airport Corporation Incheon 602, Halla Sigma Valley, 545, 48 Netropy Co., Ltd. Netropy Dunchon-daero, Jungwon-gu, 070-7432-2345 www.netropy.co.kr Seongnam-si, Gyeonggi-do 233-5, Mokdongdong-ro, 49 NEXINNO Co., Ltd. NEXINNO 02-2061-2001 www.nexinno.co.kr Yangcheon-gu, Seoul DotName Korea Co., Samik Lavidol Building, 234, Teheran-ro, 50 DOTNAME 070-7090-0852 www.dotname.co.kr Ltd. Gangnam-gu, Seoul 4, 6, 7th Floor, Jeil Building, 9, 51 DLive Co., Ltd. DLIVE 070-7410-4703 www.cnm.co.kr Teheran-ro 103-gil, Gangnam-gu, Seoul 505, APEC Center, 18, Achasan-ro 52 Vtopia Co., Ltd. VTOPIA 02-563-2245 www.vtopia.co.kr 7na-gil, Seongdong-gu, Seoul Seokyung 532, Jinyangho-ro, Jinju-si, 53 SCSNET 055-740-3121 www.iscs.co.kr Broadcasting Co., Ltd. Gyeongsangnam-do 3F, KT Dongpanggyo Bldg. 86, Daewangpangyo-ro 644beon-gil, 54 Smile Serv SMILESERV 02-1688-4879 www.cloudv.kr Bundang-gu, Seongnam-si, Gyeonggi-do CMB Co., Ltd. CMBKWANGJU 13, Sangmujungang-ro 104beon-gil, 55 070-8110-7734 www.cmbkj.tv Broadcasting Co., Ltd. NET Seo-gu, Gwangju CMB CMB Building, 20, Daejong-ro 56 DaejeonBroadcasting CMBI-NETDJ 070-8110-7401 www.cmbdj.co.kr 584beon-gil, Jung-gu, Daejeon Co., Ltd. CMB Hangang Cable CMB Building, 22, Yangpyeong-ro 17-gil, 57 CMBI-NETHK 070-8110-7143 - Co., Ltd. Yeongdeungpo-gu, Seoul CJ Hello Vision Co., CJ-HELLOVISI 6F. Dream Tower, 19, World Cup buk-ro 58 070-8130-1751 www.cjhellovision.com Ltd. ON 56-gil, Mapo-gu, Seoul 14, Seongnam-daero 343beon-gil, Areum Broadcasting 59 DITIZONE Bundang-gu, Seongnam-si, 070-8145-1031 www.abn.co.kr Network Co., Ltd. Gyeonggi-do 2F, KT Banpo Building, 73, 60 Inet Co., Ltd. KPIN 02-2273-9744 www.kpin.net Sapyeong-daero, Seocho-gu, Seoul 40, Nambusunhwan-ro 337ga-gil, 61 INET Hosting Co., Ltd. INET 02-2103-7500 www.inet.co.kr Seocho-gu, Seoul INT Management Co., 14F, LGU+, 416, World Cup buk-ro, 62 INTCOMPANY 070-4888-5793 www.intcompany.co.kr Ltd. Mapo-gu, Seoul Jinil Building, 13, Eonju-ro 81-gil, 63 IP4 Networks Co., Ltd. IP4NET 070-7001-0982 www.ip4.co.kr Gangnam-gu, Seoul Elimnet Building, 15, Gyeonggidae-ro, 64 ElimNet Co., Ltd. ELIMNET 02-3149-4835 www.elim.net Seodaemun-gu, Seoul 1401, 1402, J&K Digital Tower, 111, 65 LX CO., Ltd. LXN 02-851-0111 www.lxn.co.kr Digital-ro 26-gil, Guro-gu, Seoul 66 LG CNS Co., Ltd. LG-NET 24, FKI Tower, 24, Yeoui-daero, 02-2099-5887 www.lgcns.com

140 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix

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141 .kreonet.re.kr -6070 www.kctv.co.kr 02-767-7174 www.kosocm.co.kr 02-360-3227 www.signgate.com 02-310-0485 www.kddi.co.kr 02-880-5364 www.kren.ne.kr 02-500-6630 www.olleh.com 02-580-4600 www.kinx.net 02-6276-1572 www.cafe24.com 02-1899-8189 - 02-6269-1100 f-worker.co.kr 02-1644-7568 www.piranha.co.kr 02-6112-2000 www.raynet.co.kr 031-226-9399 www.jndinfo.com 02-3281-3456 www.haion.net 02-1544-4450 www.hilineisp.net 031-234-0445 02-6903-9682 koreacenter.com 070-8109-1661 www.hcn.co.kr 070-8188-1086 www.tbroad.com 070-8882-2581 www.crson.net Address Telephone No. URL Seoul National University Central Computer Center, 1, Gwanak-ro, Gwanak-gu, Seoul 325, Hyundai Hiel, 438, Suwon-si, Paldal-gu, Gyeongsu-daero, Gyeonggi-do 242, Pangyo-ro, Bundang-gu, Seongnam-si, Gyeonggi-do Woorim Lions Valleydigital 1-ro,Seoul Geumcheon-gu, A-1401, 168, Gasan 48, Building, Sehwa 3F, Seoul Gangnam-gu, Teheran-ro25-gil, Building,HCN 19,Banpo-daero, SeoulSeocho-gu, 5-gil, Boramae-ro 15, Hall, KOSCA Dongjak-gu, Seoul 309, Center, Business Korea 601, Seoul Seocho-gu, Gangnam-daero, 512, 6thDigiral Byeoksan Valley, 219, Gasandigital 1-ro, Geumcheon-gu, Seoul Center,KnowledgeValley Smart C-2513, 30,Songdomirae-ro, Yeonsu-gu, Incheon Tower, Dream Venture 3rd E&C 705, Digital-ro31-gil,38-21, Seoul Guro-gu, 90, Buljeong-ro, Bundang-gu, Seongnam-si, Gyeonggi-do KRX, 76, Yeouinaru-ro, Yeongdeungpo-gu, Seoul 12F, 233-5, Mokdongdong-ro, KT-ICC Seoul Yangcheon-gu, 5F,338beon-gil, 21, Gyeongsu-daero Gyeonggi-do Suwon-si, Gwonseon-gu, E-106, GwangmyeongHaan-ro, Gwangmyeong-si, TechnoPark, Gyeonggi-do 60, 30-gil, Eonju-ro 13, Acrobil, Daelim 5F, Seoul Gangnam-gu, 8F, Seoul Finance Center, 136, Sejong-daero, Seoul Jung-gu, 336, World cup-ro, Paldal-gu, Paldal-gu, cup-ro, World 336, Suwon-si, Gyeonggi-do Yeongdeungpo-gu, Seoul R PAS 49, Supyo-ro, Jung-gu, Seoul 02-6031-0067 - EOUL KREN KOREN Daegu 53,Dong-gu, Cheomdan-ro, 053-230-1776 nia.or.kr TBROAD English English HINETWORKS KOREACENTE TELEHOUSE-S Service Name Name National Information Information National Society Agency Korea Cable TV KCTVNET Building, Namwha 146, Geumnam-ro, 062-417 Korea Education Network Korea DataKICA Co., Ltd. KDATA SIGNGATE Piranha SystemsLtd. Co., HaionNet PIRANHA KISTI HAIONNET KREONet 245, Daejeon Daehak-ro, Yuseong-gu, 042-869-0707 www KDDI KOREA CO., LTD. CrossoNNet Co., Ltd. CROSSONNET Pine Asset Service Co., Ltd. Famers Walker FW-IDC Highline DotNet Co., Ltd. Ltd.Co., HCN Hyundai HCN Cafe 24 Company CAFE24 KT Co., Ltd. Co., KT CenterKorea DotCom Inc. Co., Ltd.Koscom KORNET Ltd. Co., Tbroad Suwon Broadcasting KOINS J&D Telecom Co., Ltd. Co., Telecom J&D JNDINFO Geo Raynet Co., Ltd. RayNet KINX Co., Ltd. KINXINC WITH Systems Co.,Ltd. WITHSYSTEMS 71 81 77 72 75 73 74 87 78 79 76 67 82 70 89 85 86 83 84 68 69 88 80 2017 Korea Internet White Paper | Appendix | List of Domestic ISPs(as of March 2017)

English Name Address Telephone No. URL Service Name Gwangju Broadcasting Buk-gu, Gwangju Korea Cable TV 1611, Dalgubeol-daero, Dalseo-gu, 90 Pureun Broadcasting GCS 070-8145-6142 www.gcs.co.kr Daegu Co., Ltd. 16F, Business Tower, 396, World Cup 91 Hansol NexG Co., Ltd. VAAN 02-2016-0834 www.hansolnexg.com buk-ro, Mapo-gu, Seoul 2F, 36, Jangmi-ro, Bundang-gu, 92 Hostway IDC Co., Ltd. HOSTWAY 02-1544-2233 www.hostway.co.kr Seongnam-si, Gyeonggi-do 16F, Ere Building, 57, Seonyudong 2-ro, 93 Hyosung ITX HYOSUNGCDN 02-6288-6508 www.hyosungitx.com Yeongdeungpo-gu, Seoul

142 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 143 Health Applications Development Communications Payment Interferometry DNSDNSSECDSP DNS Security Extensions Domain Name System Side Demand Platform F FTA FTTH G Free Trade Agreement Fiber To The Home G2BG4BGA4GH Government to Business GE and Genomics for Alliance Global Government for Business GEANTGGEGLORIAD Grand European Academic Network Gigabit Ethernet for Global Advanced Network Ring GPaaS Group of Governmental Experts GPKIGPS Servcie a as Platform Game GRIInfrastructure GSMKey Public Government System Positioning Global gTLDInitiative Reporting Global Mobile for System Global generic Top Level Domain E EBPPEDI and Presentation EduroamBill Electronic EFTENUM Education Roaming ElectronicEoC Data Interchange EoS Electronic Transfer Funds ETL Elephone NUmber Mapping e-VLBICoax of Ethernet SONET over Ethernet electronic Very Long Baseline Extraction, Transformation, Loading Pacific Information Information Pacific ･ Generation th Infrastructure NETwork Exchange D D2DDaaSDDoSDIO Device-to-Device DMC Data as a Service Service of Denial Distributed Infrastructure Online Deutschland City Media Digital B BcNBGP Network convergence C Broadband Border Gateway Protocol C&CCAccTLDCDMA and Control Command CES country code Top LevelAggregation CoMP Domain Carrier Access Multiple Division Code COREENCPS Electronics Show Consumer Environment Research CSB Coordinated COllaborative Multipoint Cyber Physical Systems Service Brokerage Cloud A ACIADSLAoCAONInfrastructure Centric Line Application Subscriber Digital AP Asymmetric API Affirmation of Commitments APII Active Optical Network ARPANET Point Access Interface Programming Application AgencyProjects Research Asia Advanced AS Autonomous System 3D5G 3 Dimension 5 Abbreviations 6NGIX Internet Generic Neutral IPv6 2017 Korea Internet White Paper | Appendix | Organization Abbreviations

H KWCAG Korean Web Content Accessibility Guidelines HetNet Heterogeneous Network HDMI High Definition Multimedia Interface HFC Hybrid Fiber Coax L HMD Head Mounted Display LAN Local Area Network HSDPA High Speed Downlink Packet Access LBS Location Based Service HSPA High Speed Packet Access LHCOPN LHC Optical Private Network HTML HyperText Markup Language LTE Long Term Evolution

I M IaaS Infrastructure as a Service M2M Machine to Machine IAR Internet Address Resource MCN Multi Channel Network ICT Information and Communications MIM Mobile Instant Messenger Technology MIMO Multi User Multiple Input Multiple IE Internet Explorer Output IoE Internet of Everything MOOC Massive Open Online Course IoT Internet of Things MTC Machine-Type Communications IP Internet Protocol mVoIP mobile Voice over Internet Protocol i-PIN internet Personal Identification MW Microwave Number MWC Mobile World Congress IPTV Internet Protocol TV IPv4 Internet Protocol version 4 N IPv6 Internet Protocol version 6 IRNC International Research Network NCS National Competency Standards Connection NFC Near Field Communication ISDN Integrated Service Digital Network NFV Network Function Virtualization ISP Internet Service Provider NII National Information Infrastructure ITR International Telecommunication NLP Natural Language Processing Regulations NPKI National Public Key Infrastructure IX Internet eXchange NOC Network Operations Center

J O JIS Japanese Industrial Standards O2O Online to Offline JTC1 Joint Technical Committee1 ONOS Open Network Operating System OTT Over The Top K OTP One Time Password KAP Knowledge Attitude Practice P KOCW Korea Open Course Ware KOREN KOrea advanced REsearch Network P2P Peer To Peer K-PION Korea Patent Information Online PaaS Platform as a Service Network PKI Public Key Infrastructure KREONET Korea Research Environment Open PON Passive Optical Network NETwork PP Program Provider KSTAR Korea Superconducting Tokamak PSTN Public Switched Telephone Network Advanced Research

144 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 145 Microwave Access Microwave UHDUSNDefinition High Ultra Ubiquitous Sensor Network X xDSL Line xDigital Subscriber V V2XVODVoIPVR Vehicle to Everything VSAT Video On Demand Voice over Internet Protocol W Virtual VeryReality Small Aperture Terminal WACWANWCAGWDMCommunity App Wholesale WiMAX Wide Area Network AccessibilityGuidelinesContent Web WLAN for Wavelength Division MultiplexingInteroperability Worldwide WPANWWANWWW Wireless Local Area Network Wireless Personal Area Network Wireless Wide Area Network World Wide Web Protocol/Internet Protocol Multiplexing Multiplexer U UFBinitiative Broadband Ultra-Fast TDMTEINTLDTPS Time Division Multiplexing TWDM Trans Eurasia Information Network Top Level Domain Triple Play Service Division Wavelength and Time T TaaSTCP/IP Testbed as a Service Transmission Control RPGRTT Role Playing Game S Round-Trip delay Time SaaSSAFESDNSGCC Software as a Service SINET Firewall SDN-Assisted Environment SLA Software Defined Network SLD Study Group on Cloud Computing SMF Information and Network Science SMS Service Level Agreement SNMP Second Level Domain SNSFiber Mode Single SON Service Short Message SQLProtocolManagement Network Simple SSLService Network Social SSP Self Optimizing Networks STB Structured Query Language SWG5 Secure Sockets Layer Platform Side Supply 5 Set Group Top Box Working Special R RFCRFIDROADM Comment For Request Reconfigurable Radio Frequency IDentification Optical Add-Drop Q QCQPS Query Count Quadruple Play Service 2017 Korea Internet White Paper | Appendix | Organization Abbreviations

Organization Abbreviations

3GPP 3rd Generation Partnership Project

A AfriNIC Africa Network Information Center APCERT Asia-Pacific Computer Emergency Response Team APEC Asia-Pacific Economic Cooperation APNIC Asia-Pacific Network Information Center ARIN American Registry for Internet Numbers ASEM Asia-Europe Meeting

C ccNSO Country Code Names Supporting Organization CERN The European Organization for Nuclear Research CWG Council Working Group on Internet Public Policy Related Issues

D DARPA Defense Advanced Research Projects Agency

E ERCIM European Research Consortium for Informatics and Mathematics EC European Commission ETRI Electronics and Telecommunications Research Institute ETSI European Telecommunications Standards Institute

F FIRST Forum of Incident Response and Security Teams

G GAC Governmental Advisory Committee GCIG Global Commission on Internet Governance GIST Gwangju Institute of Science and Technology GLIF Global Lambda Integrated Facility GLORIAD Global Ring Network for Advanced Applications Development

I IANA Internet Assigned Numbers Authority ICANN Internet Corporation for Assigned Names and Numbers ICG IANA Stewardship Transition Coordination Group

146 Part 1 Industry and Service Part 2 Utilization Part 3 Infrastructure Part 4 International CooperationAppendix 147 logy Standards O OASIS Organization for the Advancement of Structured Information N NIPANIANICNICT National IT industry Agency Promotion NIRAgency Society Information National NSACouncil Techno Intelligence National Communications and NSFInformation of Institute National NTIA Registry Internet National National Security Agency Administration Information Foundation and Science National Telecommunications National OECD Organization for Economic Cooperation and Development LACNIC Latin American and CaribbeanM Internet Address Registry MOISMSIT Ministry of the Interior Safety and Ministry of Science and ICT L K KAISTKIGAKISAKISDI Korea Advanced Institute of Science and Technology Alliance KISTIGovernance Internet Korea KLID Korea Internet & Security Agency KRNIC Korea Information Society Development Institute KOTRA Korea Institute of Science and Technology Information KCC Korea Local Information Research Development& Institute Korea Network InformationKCA Center Korea Trade-Investment Promotion Agency Korea Communications Commission Korea Communications Agency IDCIECIEEEIERC Internet Data CenterIETF InternationalIGFEngineers ElectrotechnicalElectronics Commission and Electrical of Institute IMD IoT European Research Cluster ISO Internet Engineering Task Force ISOC InternetITU Governance Forum International Institute Development for Management Standardization for Organization International Internet Society International Telecommunication Union 2017 Korea Internet White Paper | Appendix | Organization Abbreviations

R RIPE NCC Reseaux́ IP Europeenś Network Coordination Center RIR Regional Internet Registry

S STC Special Technical Committee

T TTA Korea Telecommunications Technology Association

W W3C World Wide Web Consortium WAI Web Accessibility Initiative WCIT World Conference on International Telecommunications WEF World Economic Forum WSIS World Summit on the Information Society WTPF World Telecommunication/ICT Policy Forum WTSA World Telecommunication Standardization Assembly

148 About the KISA

The KISA has set ‘Internet promotion for the future’ and ‘information security for our safety’ as its two primary tasks, and is focusing on enhancing the information security capacity of Korea’s ICT industry and expanding global cooperative partnerships based on the K-ICT Security Development Strategy, to ensure that these two pillars will serve as the core competencies of the future Korea in an equal and harmonious manner.

Protecting the industry from the risk of cyber attacks and preventing privacy infringement ∙ Operation of the Korea Internet Security Center and KrCERT/CC - Monitoring of cyber threats such as DDoS attacks and distribution of malicious codes on a 24/7/365 basis. - Operation of the DDoS Response System (DDos Cyber Shelter Service). - Detection of and response to Websites hosting malicious codes. * The KISA has searched the 2.5 million Korean domains to protect local Internet users from infection with malicious codes by accessing web pages that host them. ∙ Research & Development of Information Security Technology ∙ Information Security Management System (ISMS) Certification ∙ Education of elite cyber security experts (KISA ACADEMY) ∙ Operation of the Personal Infringement Report Center and the Illegal Spam Response Center

Promoting the Internet and Information Security Industries ∙ Evaluation and certification system for information security products (CCRA) ∙ Support Center for the IPv6 ∙ Korea Domain Name System (KrDNS) ∙ Korea National Biometric Test Center ∙ Regional information security bases ∙ IoT Innovation Center

Expanding International Cooperation and Business Overseas ∙ Global cooperation network with ITU, OECD, World Bank, FIRST, APCERT, ICANN, APNIC, etc. ∙ Initiation of a new global cooperation platform named CAMP * CAMP : Cybersecurity Alliance for Mutual Progress ∙ A total of 33 MoUs signed with foreign counterparts (as of June)

149

2017 Korea Internet White Paper

Date of Printing : December, 2017 Date of Publication : December, 2017 Publisher : Kim Suck-hwan Publishing Organization : Korea Internet and Security Agency (KISA) Address : 9, Jinheung-gil, Naju-si, Jeollanam-do, Republic of Korea (58324) Tel : 1544-5118 Design & Print : SocialHug Co., Ltd

ISBN：979-11-86720-05-9

y The copyright and publication right for this White Paper are held by the MSIT and the KISA, so any reprinting of the material contained in this book without permission is strictly prohibited. Any use of the content of this book must cite the source as“MSIT - KISA, 2017 Korea Internet White Paper”. y If you have any inquiries about the content or the distribution of this White Paper, please contact KISA (☎118). [2017 Korea Internet White Paper] can be viewed via the e-Book service on the Internet. (http://isis.kisa.or.kr/)