Netflix gets sued

It’s a hotly debated topic. Should Netflix pay ISPs for the bandwidth usage generated by its popular streaming platform? Count Korean ISP SK Telecom in the yes camp, as that ISP is now suing Netflix to recoup bandwidth costs.

Netflix has a couple of hits on its hands with Korean subscribers. The streaming shows Squid Game and D.P. are apparently driving massive bandwidth surges and SK Telecom has had enough, The Verge reports. According to a Reuters report, the shows are driving a 24x increase in bandwidth on SK’s network.

In court filings, SK Telecom estimates that Netflix should pay the company $22.9 million for bandwidth usage in 2020 alone. A Korean court already ruled against Netflix in a previous dispute with SK Telecom.

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This Korean Netflix dispute exposes an ongoing debate regarding not only Netflix, but all OTT streaming services that ride ISP networks into consumer homes. Netflix and others argue that their streaming services are just like any other consumer service, paid for by those end consumers, and that ISPs are compensated by those consumers through monthly ISP bills.

Many ISPs beg to differ, arguing OTT providers should also pay them in some form to carry all that traffic across their network. OTT video is at the center of this debate, given that most traffic carried across ISP networks these days is video. A Sandvine report last year pegged video as 62% of all mobile traffic.

But there are also net neutrality complications to both sides of this argument. Paying for network access could create unfair advantages for companies like Netflix, over smaller, lesser known players.

According to The Korea Herald, a Korean court says, “It is also reasonable to say that Netflix has the obligation of paying the price for the services to SK Broadband.”

Negotiations are now under way between the two. Korea is a unique market, with precedent for ISPs being compensated by third parties. But it does speak to a potential shifting tide towards OTT providers compensating ISPs for network traffic, perhaps even influencing the debate here in the U.S. about the same issue.

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