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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

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From: benhorseman	7/25/2006 9:03:11 AM
	of 196971

[LAW TALK]LG Telecom: Strict application of law or sympathy? koreaherald.co.kr The Ministry of Information and Communications (MIC) recently indicated it will revoke LG Telecom's third generation IMT-2000 wireless license after the telecom provider failed to make the necessary network investment by the end of June. LG Telecom reportedly made an initial payment of 220 billion won in May 2002 for the carrier license, which would have used Qualcomm's CMDA2000 technology. Competitors SK Telecom and KTF had set up 3G networks based on W-CDMA technology, which emerged as the world's leading 3G standard. LG Telecom has said it will set up a 3G network later this year using different technology. LG Telecom reportedly decided to abandon its IMT-2000 license since the necessary technology and equipment have not been developed. However, under the Telecommunications Business Act, LG Telecom CEO Nam Young is required to step down to take responsibility for failing to set up the 3G network and the company is reportedly subject to an obligation to make an additional contribution for the allocation of a radio wave. It seems that both the MIC and LG Telecom didn't fully consider the implications of failing to follow through on the license. Further, before the MIC minister announced the cancellation of the license, the Information and Communication Policy Deliberation Council, an MIC organization established to consider major policies related to information and communications, recommended that the minister consider allowing Nam to continue in his position as CEO. Does the MIC minister have the discretion to allow exceptions to the law? Should the minister indeed consider allowing exceptional treatment for the CEO of LG Telecom? And why did the council make its recommendation to the minister? There seems to be general sympathy for LG Telecom and its CEO for facing the unprecedented cancellation of its license and the CEO's dismissal. The company made a large bet on an ultimately unviable technology while the law's disqualification provision was intended to safeguard the public's interest in allocating electromagnetic spectrum by punishing malfeasance, not business decisions that only look poor in hindsight. Looking at the relevant laws, however, there seems to be little room for the MIC minister to allow exceptional treatment for LG Telecom or its CEO. Despite sympathy for LG Telecom and its leader, the principles set forth in the relevant laws require the cancellation of the license and Nam's automatic dismissal. Not applying the requirements under the law under these circumstances would cause additional challenges and criticism for failing to ensure the even application of the law. This case reveals the importance of legislation that carefully considers situations that may happen so that the actual application of law does not create innocent victims or other unintended consequences. Further, establishing and enforcing government policies for regulated industries must be supported by legal principles under well-designed legislation so that each industry can well understand and assess the possible consequences of complying with government policies. Mr. Park Sang-il is a founding partner of Hwang Mok Park P.C., one of Korea's leading law firms. HMP may be contacted at info@hmplaw.com or (02) 772-2700 - Ed. By Park Sang-il 2006.07.26

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